Germany is the largest cargo rail traffic market in Europe but it is one of the countries with the lowest share of railways in the goods transportation mobility mix .
The electrification of cargo trains is yet another unsolved challenge. As cargo trains are significantly heavier than passenger trains, conventional batteries are often not powerful enough to drive the train . Thus, the future of goods transportation on rails is likely to require different business models compared to passenger transportation.
Political Topics / Constraints
Trains remain an important mode of goods transportation, despite the manifold challenges the industry faces. Next to the fact that there are currently no alternative power-trains powerful enough to drive heavy-duty cargo trains , the incompatibility of international railway networks poses a tremendous challenge . Both constraints will now be analysed further.
Currently, around 61% of Germany’s railway network is electrified. In some European countries such as Switzerland, Italy, Spain or Poland this value is notably higher . This means that today, a significant share of Europe’s railway lines is not fully electrified and can thus not be used by electric cargo trains. This is the reason why cargo trains are still primarily diesel-driven which not only harms the environment but also counteracts all environmental benefits that characterize rail transportation. One potential solution would be the employment of so-called dual-mode locomotives which run on two power sources: in the presence of overhead wires, the trains are powered by electricity; on tracks without overhead lines, the locomotive switches to a diesel engine .
The second limitation is the lack of compatibility of border crossings. Within the EU, only 27 out of 57 border crossings are electrified which renders the full employment of electric trains impossible. Plus, the varying national railway systems mentioned earlier make rail transportation for goods less attractive as switching trains at borders increases the travel time as well as the costs  .
While the development of a fully harmonised global railway network is impossible, leading railway operators must develop common standards and bridging solutions for existing systems on borders .
The awareness of the potential of rail transportation in the battle against climate change has increased significantly in the recent past. This is the reason why the EU decided to increase the share of goods transportation on rails from 19% in 2019 to over 25% by 2030. An international comparison with Austria and Switzerland shows that Germany lags far behind in the employment of cargo trains: Austria already handled a quarter of total goods transports on rails in 2019. In Switzerland, this share was even higher, at 40% .
However, the recent past has shown that sometimes, these declarations of intent dissolve into thin air. In 2017, the German railway sector developed a “Master plan for rail freight transport” in collaboration with the Federal Ministry for Traffic and Digital Infrastructure (BMVI) in order to improve the competitiveness of cargo trains versus trucks, to increase the market share of rail in the modal mix and to generally modernize the cargo rail sector. Digitalisation, modernisation, and modern vehicle engineering were supposed to improve the performance quality and service, enhance productivity and simultaneously decrease costs. Although the federal government had approved public funding for this project, no financial means were actually allocated to it in the state budget of 2019. Without the serious and reliable support of state governments, the modernisation of rail freight transportation cannot be achieved .
In this context, logistics service providers, industrial companies, and railway operators are to be considered consumers of cargo railways and they face a variety of problems and inconveniences. In theory, the advantages of cargo trains versus trucks are manifold and should at least balance the advantages of trucks and convince more consumers to make use of cargo trains. However, it seems that most users do prefer truck transportation due to the following reasons.
As mentioned in the chapter on long-distance rail transportation, railways are actively disadvantaged by numerous regulations.
For one thing they are charged with the highest energy tax in the EU with Austria and Germany charging the highest fees within the Union. For another, cargo rail users are required to pay tolls in order to be allowed to use the rails in the first place . Furthermore, the German government has decided to subsidize diesel trucks as well as more environmentally friendly electric and gas-trucks but subsidies for electric trains have still not been put into place. While electric and gas-trucks are entirely freed from tolls, all trains are charged the full toll .
The electrification gaps, especially at border crossings, that were also described above, pose another significant issue for cargo trains. The situation is particularly problematic in Poland and the Czech Republic which are important trade partners and transit countries for cargo trains. The lack of overhead lines makes the use of electric locomotives on international trajectories impossible. Since changing locomotives at the border is highly time-consuming and expensive, companies directly employ trucks instead, to save money and time and ensure a frictionless journey .
As passenger trains are usually under more pressure to travel on time, they are prioritized over cargo trains. As a consequence, cargo trains are moved to passing tracks to make way for passenger trains. Despite the increasing demand for cargo trains, these passing tracks are often too short for cargo trains with a European standard length of 740 metres and sometimes they do not even exist. Therefore, 90% of the EU railway network cannot be used by cargo trains which inhibits the exploitation of a train’s length benefits versus trucks .
Another reason for companies not to use cargo trains is the lack of direct access of industry parks to the railway network. If companies want to get this direct access, they must carry at least half of the total costs plus maintenance, using rights and more. The share of companies with direct access to rails has plummeted from 11,000 in 1997 to around 2,000 in 2019 - and the declining trend continues   . This direct access to train tracks is critical for the expansion of rail freight transportation which is why in Germany, a broad alliance has formed to support the reactivation of direct rail access points across the country. The members of this alliance advocate for the federal government to improve the general conditions for operators of direct access points by cutting down on the bureaucracy, decreasing costs and risks and subsidizing the creation of direct access points. Furthermore, they defined the goal of convincing industry, trade and logistics of the benefits of direct rail access for industry parks .
All the aspects mentioned above show that compared to other means of goods transportation such as trucks, airplanes and ships, trains are clearly disadvantaged although they are proven to be a lot more compatible with the climate goals set for 2050. This also holds true for external costs that are not being allocated to the different means of transportation according to the damage they cause. While cargo trains cause less than 10% of the external costs that are induced by trucks (€2.6 billion versus €28.7 billion), they carry the same financial responsibility .
As mentioned above, individuality is one of the decisive characteristics defining the future of consumption and mobility. In the past, the conveyance of single carriages or carriage groups formed the backbone of European rail transportation. Over time, those carriage groups were replaced with long, complete trains and combined freight traffic. The latter represents the strongest segment in today’s goods transportation sector and makes up for 40% of all goods traffic on German rails. As combined freight traffic relies heavily on first and last mile transport by trucks and long trains cannot fulfill the need for more individual goods transportation, the transportation of single carriages and smaller carriage groups must be reactivated and environmentally friendly innovations for first and last mile problems must be brought forward .
Furthermore, the European system still requires manual coupling of wagons and locomotives which creates higher costs and extends the process duration which represents a disadvantage for cargo rail users. In most other parts of the world, this process has long been automated .
Lastly, especially new users of the European cargo railway network face difficulties acquiring all relevant information on existing offers and organizing their freight transportation. In order to facilitate this process, the EU member states should develop a digital portal that offers a comprehensive overview over offers, service companies, costs and legal conditions .
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