Authors: Gernot Müller, Martin Zauner
Summary
The transport performance by single wagon load in Germany has dropped from 34 bn tonne-kilometres (tkm) down to about 28 bn tkm between 2004 and 2010. Looking ahead, no substantial growth in demand becomes apparent neither. Market entries (block train or combined transport operators; industrial and dock railways, if applicable) are hardly expected as profitable business models are hard to realize. Market shares of alternative operators continue to remain at a level of about 5 %.
A fundamental problem of single wagon load transport are high fixed costs in combination with limited demand, resulting in a high capacity utilisation risk. Especially intermodal competition by road-freight transport puts pressure on prices in many market segments and involve low returns. In order to achieve higher margins, it would be necessary to increase volumes or to reduce costs (however, most costs are largely fixed).
In order to stabilise demand and costs, companies operating single wagon load transport can pursue various strategies. This includes integrating single wagons into block trains as well as focusing on goods which can be containerised. The number of shunting processes should be reduced while an acceptable train utilisation should be maintained at the same time (for example by bypassing automated marshalling yards, reducing usage of junction and satellite stations, or using public access points more). Concepts referring to shuttle-, liner train- or "Ringzug"-operations may likewise be options in singular cases ("Ringzug" is a German concept where the train is operated similar to a block train in a circle with various access points for shippers). New competitors should focus on specific regions or main carriages with high volumes. Key goods single wagon load are characterised by high value, high total volumes, but small individual dispatches. Important features are reliability in terms of time, the flexibility to offer additional logistic services, and a customer-focussed price setting.
Marketing campaigns can lower the widespread lack of knowledge about single wagon load transport with potential new customers. Competitors should seek joint ventures or co-operatives as none of them alone disposes of the required local structures for acquisition, production, and distribution. The co-operation with rail-freight forwarding agents is critical and could be improved. Market players need to expand their knowledge with respect to the operation of single wagon load transport, and to their shippers’ production systems and logistics. Further market entry barriers could be removed by improving access to (and increasing of capacities of) holding tracks, alternative concepts for improving the efficiency of vehicle markets, simpler allocation of safety certifications as well as the expansion of heavily used rail tracks.
Discussion Paper is available for download.
