Speakers:

Modalohr - Philippe Mangeard, President of Modalohr and President of the Circle for Optimodality in Europe
Veolia Cargo - Denis Paillat, Delegate Director
RFF (French national railway network) - Jean-Pierre Orus, Person in charge of Traveling and Freight Activities Department
La Poste (French mail service) - Marc Wautier, DG (Director-General) of Viapost, accompanied by Jacques Rolland, Director of Development
Ministry of transportation - Michel Lamalle, Assistant Director of railway and public transportation

Coordinator:

Anne-Laure Noat, Associate Consultant, Eurogroup Industry


The Background of Freight Transport in Europe and the State’s Role in the Regulation and Development of the Railway, presentation by Michel Lamalle

• Issues of the Railway Mode in Regard to Road Modal Change
  
  On June 26, 2007 at the Roissy Charles de Gaulle Airport, President Nicolas Sarkozy expressed himself on the subject of railway freight and assigned a specific objective to Jean Louis Borloo, Minister of Ecology, Development and Sustainable Organization: the non road freight market must increase by a quarter by 2012. 
  
  Among the non road modes, the railway enjoys a special place. The definition of modal change of merchandise might be the transfer of transport made from one end to the other on the road towards the railway track, the waterway or the short distance waterway.
  
  The volume of road transport has increased by 85% since the 1980s. The portion of road transport in the transportation of goods is estimated to be 79.6%, while that of the railway mode is estimated at 11% that is to say half of the share seen 20 years ago. Nevertheless, we participate in a major recovery since 2005.
  
  The low share of the market is explained by structural changes of the unit of production and by the new production methods. Railway transport, still too rigid, is asked to adapt itself to new constraints. Some European countries are experiencing a rebirth of the railway mode. From 2000 to 2005, the merchandise traffic has increased by 38% in Germany (shown in tons of km) and by 22% in GB (Great Britain).
  
  For Michel Lamalle, all the modes are not equal and the possibilities of modal change depend on a number of criterion. Furthermore, the quality of service offered by road transport is efficient since it is very flexible. Rather than an alternative, the Department of Transportation considers that the various modes play complementary roles.
  
  Railway freight faces three fundamental objectives: environmental quality, reduction of congestion from urban and suburban road networks and transportation safety.
  
• The Favorable Factors in Modal Change
  
  The development of the maritime mode in pre shipment or in post shipment is a factor of modal change. The ports of Marseille, Fos and Havre are the centre of logistic activity. These three ports provide an increase in container traffic and this is an important asset for modal change, France being in the European crossroads. The second asset is railway freight itself, particularly combined transport. It can constitute an offer relevant to long distances with little breach of responsibility. Railway freight is better adapted to planned expeditions and comprises a means of transportation notably relevant on a journey of more than 350 km.
  
  Michel Lamalle explains that there are three requirements for the development of modal change: improving the quality of service and competitiveness of railway companies, a better adaptation of the provision of tracks (in effect, train schedules are set in a rather strict procedure and this rigidity is poorly suited to today’s requirements) and the establishment of an adaptable transportation policy.
  
• The potential for growth
  
  The prospects for growth in this sector are considerable, especially since opening up to competition. The Department of Transportation has established prudent projections: by 2025, the growth of road traffic, currently 2.9%, should slow down greatly and stabilize around 1.7%. Conversely rail transport could accelerate with increases of 50 to 70 billion tons km by 2025.
   
• Organization of the Railway Sector
  
  The French Rail Organization has experienced a significant development in recent years with the opening of the freight market, limited to international transport in 2003 and which became complete since March 2006. The opening up to competition has allowed the entry of five new players on the market. The objective is to provide better quality service with more attractive rates, thanks to an increase in competitiveness.
  
  For the time being, the number of new entrants is relatively modest and represented 1% in 2006. It should reach 3 to 5% in 2007 and an annual turnover of 60 million in 2007.
  
• State Action
  
  The state has regulatory power since it benefits at the same time from the protection of the RFF (French national railway network) and the SNCF (French National Railway Company). In charge of the sectorial policy of the regulatory framework of transportation, it must ensure equal access to the network, equal pricing, to the transparency of the network, to the optimization of public contributions as well as the definition and the respect of safety rules.
  
   

The Effectiveness of Cross-border Traffic and the Contribution of a Solution for the Congestion of Major North-European Ports, presented by Denis Paillat

• Veolia Cargo Action
  
  Veolia Cargo is one of the five new players in the French territory opening up the competition to the railway network. In June 2005, the company was the first private operator to have run a train. Its objective is clear: to become, from now to 2010, the private reference operator on European stature and on completely private capital.
  
• The Choice of Freight Activity
  
  At the end of 2003, Veolia Transport decided to engage in freight activity for several reasons: to start with, railway freight has a notable ecological asset and integrates itself in a perspective of sustainable development. If it was widespread at the expense of road traffic, it would allow a significant decrease in the ejection of carbon dioxide. Veolia lays out a marked environmental strategy and freight seemed to be a good investment, In Addition, freight is a way to honor Veolia Environment’s strategy, which is comprised of two poles, the territorial community pole and the industry pole. For example, railway freight has been the object of proposals of multi-service bids for the big manufactures. To finish, Veolia has profited from new opportunities and a resurgence of the demand in matters of railway freight. The customers seemed newly interested, thanks partly to the prospect of markets opening.
  
• The Investments
  
  For the moment, Denis Paillat believes that Véolia is confronted, as all innovative companies are at the start up phase with problems of procuring resources. The company has made development choices in three categories: knowing the addition of major partners in the long run, the development of international traffic that can bring an extra advantage regarding long time players and an investment in maritime traffic and inter-land service.
  
  The company has also invested tremendously on the quality and the regularity of service. It benefits from a filial advantage because the customer CGA-CGM (French General Confederation of Agriculture – French General Maritime Company) brings 50% of the containers to the company.
  
  Denis Paillat claims that the company only wants to sign well regulated contracts. It does not reply to all the demands and focuses its move on the massive flow. It invests in major ways on serious investments and on staff training.
  
  The management of dangerous matters is directed to the Socorail affiliate which serves the Havre, Marseille, and Fos ports.

Input From Opening up to Competition and the Issues Linked to Railway Freight, supported by Jean-Pierre Orus

• Some Statistics
  
  At first, Jean-Pierre Orus gives a few figures. Freight activity has diminished globally from 50 billion tons km to 40 billion tons km between 2000 and 2006, which represents an important decrease in volume and in the market share. This is explained by a decrease of freight activity SNCF (French National Railway Company). This decline is the opposite of the increase in freight in almost all other European cities.
  
• The Conditions of Development
  
  For all that, the prospects for growth are promising. In fact, the establishment of long distance international traffic could be a means of freight expansion. Spain, for example, develops its network infrastructure UIC (International Union of Railways), with that of France. This bilateral development establishes an extremely important leverage. The Franco-Italian network is also in the grip of many improvements.
  
  Furthermore, the container activity and notably that of the maritime container which grows 7 to 8% per year, is promising. The Havre and Fos ports accommodate maritime containers which can then be taken over by railway freight.
  
  Jean-Pierre Orus explains that several actions are necessary to develop freight. First of all, they must try to better utilize the legal framework, particularly the one offered by opening up the market to competition. The opening should develop new services, increase productivity and lead to, on a global level, superior efficiency for the marketing system. Likewise, a track proposal must be developed in order to put quality tracks on the market within a framework of standardized schedules to offer the most advantageous route times. It will also be highly favorable that the tracks will allow crossing large conglomerations at rush hour. Another direction of work is the reduction of processing times. Moreover, it comes to facilitating the access to new customers, with the provision of numerous garages, with operators that are not with the railway company.
  
  Additionally, the problem of the small lines, (which spread out over 3000 km) must be rethought. The problem is delicate: few trains are running on these lines, generating a low amount of infrastructure fees. They are not sufficient to maintain traffic. To cope with that situation, the objective of the RFF (French national railway network), is to develop a system that authorizes railway companies to not only ensure railway traffic but also the maintenance. It must then find new legal connections and integrate the new industrial and territorial communities in the process.
  
  As far as pricing, Jean-Pierre Orus considers that thanks to productivity gains the RFF (French national railway network) can win. In effect, they would allow more contributory capacity which would then be able to finance the infrastructure fees.
  
  To finish, there remains a number of problems to solve at the European level to reduce at minimum the network interoperability constraints.
  

Freight at Great Speed SNCF - LA POSTE (French National Railway Company – French Mail Service) Program, presentation by Marc Wautier and Jacques Rolland

• Practical Terms and Objectives of the Project
  
  Foremost, La Poste (French mail service) is a transport operator, important as loader and operator. La Poste (French mail service) still marginally uses the rail, but much less than other European countries, especially Germany. It operates TGV (France’s high speed train) freight, for the last 25 years, on a length of 3½ trains. The line’s points of departure are located in Cavaillon and Paris. A connection is located in Mâcon. Marc Wautier maintains that as long as the transport operator, La Poste (French mail service) needs quality service, based on the concept of deadline and consequently speed, the TGV (France’s high speed train) in its line PLM (French Railway Company to Paris, Lyon and the Mediterranean) responds to this need for speed. 60,000 tons of freight circulates on this line annually. For La Poste (French mail service), inter-modality is a technical and economical issue. Marc Wautier deems that aerial transport is an annoyance put up with by La Poste (French mail service), for want of other possibilities. That is why the choice of TGV (France’s high speed train) is convincing because the cost compared to that of the airplane is favorable. In addition, this choice is linked to an environmental issue. The objective of La Poste – SNCF (French mail service – French National Railway Company) is to extend an offering of quality to domestic territories.
  
  
  Viapost is an administrative creation. This is a holding company which supports the involvement of La Poste (French mail service) in its affiliated activities relative to the world of transportation in general. It guides the projects to their realization.
  
• The Customer Analysis
  
  Per Jacques Rolland, we cannot do without the customer analysis which has become more and more numerous. The company associates are regularly surveyed on services rendered and on the establishments. Today, the Viapost experience is solely postal. Jacques Rolland considers that in the future we must think of a new type of support for parcel post. To achieve that, Viapost analyzes the delivery time of parcels. This study will be completed around the end of July. Viapost also plans to establish itself on the German and Beneluxiens lines and in the end Italy and Spain.
  
• The Tracks Dedicated to Freight
  
  The tracks cover two concepts: the tracks dedicated to freight and the priority freight tracks. The tracks dedicated to freight are representative of the American model today. In Europe, there are no long distance tracks dedicated to freight. According to Jacques Rolland, using the tracks dedicated to freight on certain lines where double lines are found might eventually be possible long-term in France.
  

From Piggyback to Optimodality: What Issues and What Developments? The New Highways, subject presented by Philippe Mangeard

• The Piggyback
  
  Philippe Mangeard, maintains on a preliminary basis, that railway freight does not constitute an alternative to the road but is complementary.
  Highway rail arrived late on the market. A large number of factors must be coordinated for the system to run smoothly. In fact, the technical installation was difficult and the market was way late in getting ready, because we had to wait until the road had reached its limit of productivity. Today, there is a problem of infrastructures because space ran out. To finish, a fourth factor develops for freight and the weakening of road transport is more social. There is fewer and fewer staff available on the road. The group Lohr threw itself into the piggyback 15 years ago and sold its first train in 2000. It was implemented in 2003. Lohr successfully renegotiated with new partners in 2006. Today, the group will open a rail highway. It occupies itself with the transportation of transport units of semi trailers.
  
  The realization of the necessity for piggyback emerged distinctly as a result of the tragedy in the Mont Blanc tunnel in 1999. The RFF (French national railway network) was the first to propose actions in this direction. The assistance from the transporters, loaders and the SNCF (French National Railway Company) was noted. 
  
  The piggyback has taken a long time to put in place due to problems of infrastructure, manufacturing and railway operations. Henceforth, the development of the piggyback should go very quickly, especially since the creation of the Department of Ecology, Development and Sustainable Organization. Madalohr circulated eight trains a day. The semi trailers are quickly charged in a horizontal mode on rotating boxcars. Associates like Vinci, the Caisse des Depots (French public financial institution), The SNCF (French National Railway Company), the Luxembourg railroads, finance at present, a liaison between Perpignan and Luxembourg. Madalohr no longer transports tractors and operators, to not burden the economic equation. The trains are 750m long and carry 40 semi trailers at once. Productivity and prices might then increase.
  
• Optimodality
  
  The Circle for Optimodality in Europe (COE), created at the initiative of Philippe Mangeard, is a plan of action for maximizing the technical, economic and environmental performances of the chains transporting goods. The COE (Circle for Optimodality in Europe) and its members share the desire to develop together an original synergy between transportation professionals. The objective of the group is to allow an optimization of technical, economic and environmental performances of the transport chains. The group facilitates the emergence of projects that are ambitious and innovative in diverse complementary, economically, commercially and technically realistic modes. It also structures European lobbying by allowing the COE (Circle for Optimodality in Europe) to attend close to the policy makers and have a position with the consumers.
  
  Several projects are under way, especially at the rail highways, the river-maritime highways, the mixed trains and the TGV (French high speed train) levels.