Results of European rail freight survey

Whilst European rail freight has managed to benefit over-proportionately from the dynamic growth in the economy and the increase in world trade over recent years, the sector is now recording an unprecedented collapse in demand due to the global economic crisis. The volume of rail freight transport across Europe fell by 36 per cent in the first quarter of 2009 compared to the same quarter in 2008. The other freight transportation sectors, such as road freight (down 14 per cent) or air freight (down 23 per cent), recorded similarly painful figures for the first quarter 2009.

In the latest study by Booz & Company, the European Rail Freight Survey 2009, 250 of the biggest industrial and logistics companies in Europe confirmed this negative trend. Of those interviewed, 60 per cent expect demand in rail freight to fall significantly for the full year 2009. Nearly a third of them are working on the assumption of a drop in demand of over 10 per cent. However, this collapse in sales is clearly not impacting equally across all areas in the sector: the declining volumes and resulting price pressure are particularly affecting freight in the combined transport sector and on unit trains with long-term scheduling. The influence is less marked on car-load transport and for unit trains commissioned to short deadlines. Given the massive collapse in the steel and automotive industry and in global container transport, fewer and fewer unit trains are being commissioned, and pressure on prices is being further intensified due to intensive competition between the traditional state railways and many small private railways.

“The severe economic crisis and faltering global trade are hitting the transport and logistics sector, as a key industry in globalisation, particularly hard. As in many other sectors, the recession is becoming a catalyst for far-reaching structural adjustments,” says Dieter Schneiderbauer, partner and logistics expert with Booz & Company. “Our study indicates that the providers to emerge stronger from the crisis will be those who consistently adapt or achieve greater flexibility in their production capacities and gear their service offer and their price strategies in a targeted manner to the needs of the various customer groups.”

For more details please click here to download the full survey results.