Europe wants to go intermodal, but there are warning signs the shift is being held back
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There is plenty of consensus in Europe when it comes to getting more goods transported by rail as part of an intermodal logistics push. More rail freight means less trucks on the road, which in turn results in reduced traffic congestion and CO2 emissions. However, despite there being numerous examples of companies willing to invest in rail freight, a few warning signs have also emerged of late.
This was touched on in a recent CargoOn report, which itself refers to the European Court of Auditors’ not-so-optimistic conclusion that of the six countries it analysed, i.e. Spain, France, Italy, the Netherlands, Germany and Poland, none is fully prepared to handle intermodal chains to a greater extent.
Not long after the release of that report, the Swedish Transport Agency published research that found despite evident interest in transporting goods by rail, a lack of capacity and low punctuality is putting interested parties off.
Jonathan Sundin, investigator at the Swedish Transport Agency, has described the findings as “worrying”. In his view, it is concerning to see rail freight in Sweden stagnate as rail freight’s competitiveness is lost compared to road transport.
The report refers to poor punctuality creating uncertainty about deliveries arriving on time, which subsequently hampers planning and increases costs.
The research also warns that if the aforementioned issues are not addressed, logistics companies could snub rail freight.
Another EU nation keen to boost its rail freight is Ireland, but as Freight Transport Association Ireland recently stated in response to the Irish Government’s intermodal ambitions, much needs to be done.
“Ireland currently lags behind other EU countries in developing its rail network – we currently have the lowest amount of electrified line in Europe – and with such an efficient road network, making the switch to rail will not appeal to many businesses, particularly when interchanges are not working as smoothly and efficiently as they should. Rail freight removes the need for large quantities of trucks from the nation’s roads, but without investment into the correct infrastructure, goods cannot reach the end user efficiently,” said FTAI Chief Executive Aidan Flynn.
One European company committed to intermodal logistics that is concerned by these issues is Codognotto.
The logistics operator has made approximately €10m in intermodal container investments over the last 2 years. An additional €1m has also been invested in the latest generation of containers and intermodal trailers specially designed for intermodal transport. On top of this, a further €3.5m was invested in intermodal IT infrastructure in 2021 and 2022.
Codognotto recorded around €60m in turnover from its Intermodal operations in 2021, surpassing that figure by over €10m the following year.
In spite of this, Marco Manfredini, Codognotto’s Group General Manager Operations, believes that Europe’s road freight potential simply is not being utilized.
Speaking to trans.INFO, Marco Manfredini expressed his concern about intermodal losing momentum.
“During COVID, everybody was shutting investments and work on the railway, but stopping work on the rail lines was not a good choice for transport companies.
The economy eventually got started again after COVID and there was a reprise. Then, after 5 months or so, the war in Ukraine had a big impact on the truck driving workforce. That pushed transportation to go towards rail and intermodality, because there were less trucks on the road due to loss of Eastern European drivers brought about by the war.
It was the perfect scenario for rail freight to gain a 20% extra share in the transport market, but they were unprepared. Many works started on the railway lines, with service that was strongly compromised.
This was really frustrating for us and a lot of other companies who have invested a lot of money in changing trailers and preparing the fleet for intermodal transport.”
Manfredini’s comments on service levels also somewhat echoed that of the Swedish Transport Association’s report. Codognotto’s Group Managing Director for Operations told trans.INFO:
“Another critical point is the service, including many cancellations. However, despite the limited service, there were strong increases in prices through the introduction of energy surcharges, a typical monopolistic approach.
We all know what happened last year from an energy point of view. However, with higher costs and less service how can you be competitive on the market?
This is a pity for the intermodal segment because we are losing many opportunities from the choice of combined transport. When talking with railway authorities, they are more focused on large long-term investments that will see fruition in 10 years”
Another issue raised during our discussion was the need for urgency. Although future projects are welcome, Manfredini believes that the existing infrastructure needs to be better utilised to bring about improvements quickly:
“There’s talk of a Brenner Tunnel that could be ready in 5 years, the Frejus tunnel in 7 years, and the aim of doubling rail freight capacity in Germany in 10 years. That’s all good and great plans for the future, but we also need something concrete now.
We can only get there via intermodal because there are no hydrogen and electric trucks that can take all the volume.However, Intermodality is not working because it is really not prepared to absorb enough capacity.”
All of this is happening at a time when the European community and European economy want to push towards intermodality because of the CO2 emission targets.”
“Some customers are stepping back from intermodality because it’s not working well enough. The trouble here is that it can take a lot of time for customers to change their minds on rail freight, and intermodality requires large volumes.
To build up these volumes takes a long time, but in a matter of just a few months you can lose everything that you managed to grow in the past 3-4 years.”
Finally, the Group Managing Director for Operations at Codognotto stressed the importance of collaboration when it comes to making intermodal work better:
“There needs to be a team solution. You need the infrastructure to be there and accessible.
Imagine that sometimes a train may be 30 mins late, and as a result arrives after the terminal has closed. You can’t unload the train and you have to wait, and of course you may have 50-60 loads there.
Operational coordination is key to improving the intermodal situation and giving the market the possibility to have some alternatives to keep moving goods – maybe not as well as before, but that allow companies to move goods regardless. When I mean coordination, I do not just mean railway coordination, but also what’s going on from the trucking and inland shipping side of things.
It could be that river levels are not high enough for inland shipping, which means the material on a barge is due to be loaded onto the barge, and must be transported by another medium.
For instance, the Tarvisio was closed last July. This is the peak month for goods leaving Italy and going to the north of Europe and it is very complicated to find trucks to carry all displaced loads during this month. An alternative could have been closing in August; maybe making available to passengers some combined passenger transport vehicles [NOTE – this change has been accommodated since interview took place].
I understand that it’s very difficult to find quick solutions to immediate problems, but if the target that Europe has in the next year or so is a strong movement of road to rail, something needs to be done along the lines of what Switzerland has achieved.
Switzerland is a very good example of how it can work. They have invested and progressed a lot, but they are just a small country in the middle of Europe.”
There are of course a number of reasons to be positive about the switch to intermodal. Rail freight reached unprecedented levels last year, while some major UK retailers turned to rail freight in 2021 amid the country’s severe HGV driver shortage. Moreover, plans by SNCF could even triple rail freight heading to and from the port of Calais.
On the other hand, the obstacles and shortcomings referred to by industry figures like Marco Manfredini, Aiden Flynn and Jonathan Sundin should not go unnoticed by those whose aim is to see rail freight blossom across the continent.