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Rail transport must become more competitive in terms of costs and timely delivery

Eurogrup Consulting (ECG), Ensight’s fellow member in the nextcontinent international consultancy network, published the results of the 2015 edition of the European barometer on the perception of rail shippers.

The objective of the barometer is to give shippers a voice and evaluate their opinion on rail fret. It analyzes the modal shift preferred by shippers to transport their goods, the rail services user-friendliness and the associated user satisfaction. Compared to previous editions, this one includes an assessment of the European level shippers’ perception.

 

Target population: industrial shippers, retail shippers and freight forwarders using or not conventional or combined rail transport.

Scope: a panel of 129 respondents, divided in 76 French and 53 international

Administration: online survey sent to clients and members of the steering commitee

Administration deadlines: from January 13 to March 13, 2015

 

The main conclusions of the study as well as development trends are featured below:
Suppliers are all in favor of choosing rail transport, provided that some improvements emerge. It is mandatory to be more competitive in terms of costs and timely delivery with a rail offering that combines transparency, accessibility and flexibility. Network renovation and development, in order to cover local needs, is a step that also appears of utmost importance.


Advocated actions include:
1. Competitive pricing, improved timeliness
2. More clarity, transparency and availability
3. Cost control, decrease in hazards and lines development
4. Upgrading last mile cost
5. Funding of feeder network renovation and freezing of freight journeys price increase
6. An improved network and a more competitive rail market

 

Combined rail/road transport and combined waterway/road transport appear both as satisfactory modes of transport. The rail alternative, in its combined form (especially with road transport) provides flexibility, which can certainly catch the attention of more shippers. Nevertheless, stakeholders are not losing sight of financial imperatives and environmental requirements in their transport choice.


Shippers stress the necessity of mutual cooperation between transport organizers and rail companies to try to better meet their needs, especially of those that are not rail connected.

 

Modal split
Road transport remains the preferred transport mode, 50% of panel respondents using only one mode of transport having chosen this option.


When two modes have to be used, the players prefer the combination of conventional rail transport with road transport (48% of total respondents selected this option). Compared to last year, each combined rail/road transport and combined waterway/road transport increased by 10 points.

 

Depending on the transported type of goods, road transport remains the first mode, in case of transportation of consumer goods and hazardous and chemical products.

 

 

 

Organization of transport flows
The shippers in the panel equally resort to freight forwarders (26%), rail operators or short-haul rail operators (25%), road transport companies (25%) and combined transport operators (24%).


45% of the shippers declare that they are dealing with only one partner to organize rail or rail/road flows and 36% deal with two transport partners.


As a particularity, French shippers appear to be more rail-connected (~60% of the respondents), but more reluctant to group together their goods (only 10% of French shippers group their goods compared to 42% of foreign shippers).


Rail freight user-friendliness
Although registering an improvement compared to previous editions, user friendliness still has room to develop, considering the fact that 40% of French shippers and 15% of foreign ones have an unfavorable opinion.


The main issue mentioned by shippers is “lack of comprehensiveness”, while the main advances suggested by the panel include among others “a ‘door to door’ commercial approach, based on customer demand”.


User satisfaction
82% of French respondents have a negative opinion of how the rail freight offer matches their needs, with their foreign counterparts taking a similar stance (70% of the foreign respondents have a negative perception on rail freight).

 

The most satisfied shippers are those who use road transport, as last year, whereas in case of rail transport 80% of users are currently fairly satisfied or not satisfied at all, against 77% last year and 61% in the 2013 Barometer.


Modal shift
Financial incentive and company image are prevailing among the main criteria encouraging modal shift of goods in the medium term.
Although to a lesser extent than in the 2014 Barometer, road transport price is likely to have an impact on the choice of mode of transport, for almost 68% of respondents.


Rail freight future
For the general panel, rail transport growth prospects are more on the upside than on the downside (28% France versus 13% foreign countries).


95% of respondents are willing to carry more goods by rail in the future, thus confirming the trend already present in the 2nd edition of the Barometer (97%).


Among the users, who do not use rail and are eager to use this mode more, 70% of them are carrying consumer goods.


Combined rail/road transport is the mode that has the highest potential for development. To enhance the appeal of rail fright, timely delivery (25%), cost (24%) and flexibility (8%) are decisive criteria.
 

Authors

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ENSIGHT MANAGEMENT CONSULTING SRL