Wall Street Journal
March 29, 1999Freight Rail Is Unable to Shake
By CHARLES FLEMING
Its Old-World Ways in Europe
Staff Reporter of THE WALL STREET JOURNALPADBORG, Denmark -- Six hours into its run from Copenhagen to France, the Scan-Express has come to a dead stop -- again.
Before the freight train -- 19 cars bearing steel rods and rolls of newsprint -- can cross into Germany and resume its journey, it must change locomotives and drivers. That's because Denmark and Germany use different voltages for electric locomotives and different signaling systems. "It's a sport to get home early," says Danish driver Lars Andresen. He calls it a night, the engine is decoupled, and about 30 minutes later, a German locomotive lumbers out of the gloom to take over.
That isn't the last hitch. During the rest of its 21-hour journey, the Scan-Express will only intermittently live up to its name. It will change drivers and engines a few more times. It will be sidetracked to let high-speed passenger trains zoom past. And it will have to sit idle while railway officials duplicate the paperwork on its cargo.
A Costly Throwback
Rail freight is unified Europe's big -- and costly -- exception. Across the region, borders have all but disappeared with the advent of high-speed passenger trains, highways without customs posts and now a single currency. Europe's state-owned phone monopolies, electric utilities, airlines and other national franchises have all been pried open to competition. But rail freight remains a redoubt of Europe's old ways, a patchwork of protected, antiquated national networks.
No two European countries use the same signaling systems or electric current for their trains. Trains in France and Britain run on the left side of dual-track lines, while those in the rest of Europe run on the right. Because France and Spain use two different gauges of track, trains crossing their shared border must stop to let each car be lifted so that its wheels can be changed.
Little wonder, then, that European industry has taken to the highways. Railways' share of goods transport within the European Union has fallen to only about 14% now from 32% in 1970; in the U.S., railways account for 41% of freight traffic. During the same period, as overall freight tonnage has increased by 2 1/2 times, trucks have increased their share of the traffic to 74% from about 48%.
An Ill-Timed Exit
"It doesn't take a genius to see where the trends end -- with the death of a lot of the railways," says Neil Kinnock, the EU transport commissioner who resigned earlier this month, along with the rest of the European Commission, amid allegations of widespread mismanagement. A former leader of Britain's Labor Party, Mr. Kinnock had emerged as a champion of deregulating the rail-freight sector, trying to force open to competition the region's 125,000 miles of track. Now, though Mr. Kinnock wasn't directly implicated in the allegations, his exit could hinder attempts at reform -- attempts that have so far made only a little headway.
As things are, European shippers say their choice is clear. "We have tried to use rail more, but road is much more efficient," says Kjell Roos, transport manager for IKEA of Sweden AB, which ships about 20% of its European business by train, compared with 60% by road and 20% by ship.
When Mr. Roos looked into setting up a distribution network between IKEA's new warehouse in Lyon, France, and its furniture stores around Milan, truckers got all the business. For one thing, trucks undercut rail in price by about 20%, Mr. Roos says. More important, he says, truckers were able to guarantee deliveries of a container-load of furniture in eight hours, compared with 48 hours by train.
But there is a downside to the increase in truck traffic: European roads are becoming clogged, European air sullied, and European competitiveness hampered. Those disadvantages were brought tragically to the fore last week, when at least 40 people were killed in the Mont Blanc tunnel between France and Italy in a fire that started on a Belgian truck carrying flour and margarine. Officials say the tunnel, a heavily trafficked truck route, won't reopen for weeks. For Europe as a whole, the relatively high cost of rail means that overall transport costs are as much as 20% higher in the region as in the U.S. or Japan, says Chris Welsh, secretary general of the European Shippers Council in Brussels.
Making Way
Just why those costs are so high becomes clear while riding on the Scan-Express. Just moments after the regular daily service leaves Copenhagen one afternoon, driver Henning Christiansen has to pull the train into a siding for several minutes to let a sleek new Danish intercity passenger train hurry past.
Later, in Nybourg, the graying, goateed Mr. Andresen, 33 years old, takes over. Soon, the double track narrows to a single line. It is the only fixed rail link between Denmark and the rest of Europe, and a notorious bottleneck for rail traffic, where trains like this one are often sidelined. "This is the gateway to Europe," Mr. Andresen says with a tinge of irony, releasing a bit more grit to prevent the locomotive's wheels from slipping on the wet rails.
At Padborg, after Mr. Andresen has left, German driver Juergen Maas brings his locomotive to where the Scan-Express is waiting at the border. Mr. Maas is the first of several German drivers who will guide the convoy south through the night, rumbling across bridges and through tunnels, past Hamburg and then along the moonlit Rhine valley. As day breaks close to the French border, the train again runs head-on into the old Europe.
As before, the electric current changes between France and Germany, requiring a change of locomotives. Complicating matters further, the one scheduled to take the train on the final leg into France is out of order, so a slower diesel locomotive is enlisted to do the job. Dirk Lorig gets into the cabin at Trier, Germany, to take the train across the border. He is one of the few German drivers who is qualified to do that; navigating the 500-yard stretch to a siding in eastern France requires a driver who has taken a 10-day training course in French railway signals.
Once in France, the train is forced to stop again, this time by red tape. Although all documentation of the cargo was completed in Denmark, it must be replicated by French railway officials because the railway operators' computers aren't compatible. Half an hour later, French driver Olivier Bour guides the train a short distance to a rail yard in Woippy, where the Scan-Express is broken up and the cars are reassembled into new trains to be dispatched across France to their final destinations, which still could be hours away. On average, a car will spend 7 1/2 hours in a rail yard before setting off again.
Europe's high-speed passenger-train service has shown that it doesn't have to be like this. The French-built, chisel-nosed TGV locomotives, equipped with several electric on-board signaling systems, sweep in a blur through France, Belgium, the Netherlands and Germany, and even take passengers under the English Channel to London, all without stopping at borders. But the costs of building such a system for lower-margin freight rail are prohibitive, especially without close cooperation among national networks.
Borderless Borders
Railwaymen acknowledge that Europe's freight network is anachronistic. Skotte Soerensen, a Danish locomotive instructor traveling with Mr. Andresen on the Scan-Express, recalls driving by car with his family to the Netherlands last summer on vacation. "There were just some stripes painted on the road at the border," he says. "I didn't know I'd left Germany until I reached Amsterdam." One day, he muses, freight trains might be like that. When? "That's a political question," he says.
For truckers, the answer can be seen in the signs that flash past their windows as they zoom across borders. Roger Secula, a French driver taking his 22-ton bright orange truck and trailer north to Denmark, doesn't even slow down as he crosses from France into Belgium.
After 4 1/2 hours of driving, he stops for his regulatory 45-minute break and brews a quick cup on his dashboard coffee maker. He recalls how back in the bad old days of the late 1980s, he once had to wait 81 hours just to cross the border from Hungary to Romania. Now, crossing five EU member states in a day is a breeze. "It's great," he says. "There are no frontiers."
Mr. Secula has the added incentive of being a small shareholder in his employer, Norbert Dentressangle SA, a large French trucking firm. He chooses his route as he goes, a road map spread across the truck's steering wheel, navigating his way around the worst traffic congestion. When it's time to stop for the night, north of Dusseldorf, he pulls off the highway and parks his 63-foot vehicle on a quiet back street.
"I'll be a week on the road and I never know where I'm going to sleep tomorrow," he says, before turning in for the night on the bunk in the rear of his truck's cab.
As he pulls up to his destination in Denmark the following evening to unload his 1.7-ton load of duck and goose feathers, he is already on the mobile phone with his logistics officer back in France. They discuss the next morning's pickup for the return trip: a load of dried shellfish to be used in animal food and, at another site, empty plant containers.
A Train Goes Missing
That kind of flexibility gives trucks a critical advantage over trains. Evert Wijkander, logistics manager for Anglo-Swedish steel manufacturer Avesta Sheffield, says his company, which ships large amounts of steel between its plants in Sweden and Britain every year, decided to use more rail transport several years ago to take advantage of newly opened Channel Tunnel, despite the bureaucratic hassles of operating across so many borders.
But when one of the company's entire trains went missing (and was later found stranded in a Belgian rail yard), the company dumped its rail strategy; Avesta Sheffield now uses a combination of trucks and sea freight to get its steel from site to site. "Europe is too small to have so many different [national] railway companies," says Mr. Wijkander.
There are signs of change, but they are scant. In Britain, rail freight is recovering slightly as private-sector operators like English, Welsh & Scottish Railways, controlled by Wisconsin Central Railroad of the U.S., adopt a more competitive approach to winning new business, notably by putting greater emphasis on customer service. Some national railways, including Denmark's Danske Statsbaner DSB and Germany's Deutsche Bahn Gruppe, have abolished protected civil-servant status for new railway employees. And the Dutch and German national railway companies have agreed to merge their cargo operations at the end of this year, though some EU officials criticize that move as simply reinforcing national monopolies, rather than encouraging new entrants.
Even the most passionate advocates of the national railways acknowledge that something has to give. "Frankly, things are going too slowly," says Philippe Roumeguere, chairman of the International Union of Railways in Paris, a railway-industry association.
But the fault, he says, doesn't lie just with the railways. "I call trucks poachers [because] they aren't paying the costs they incur to society," he says. He estimates the cost of traffic delays, wear and tear on roads, and fatal road accidents to be between 4% and 6% of Europe's gross domestic product. He and other railway proponents say those "external" costs should be borne by those who use the roads most.
Allied with their managers, railway workers aren't eager to see competition overthrowing their job security; their attitudes hark back to the old Europe. "The politicians should go in and tell our customers that they have to send all freight over a certain weight by rail," says Mr. Soerensen, the Danish locomotive instructor.
Out of This World
Mr. Kinnock, the former EU transport commissioner, puts the cost of traffic congestion at a more modest 2% of European GDP. And he dismisses the idea that pricing mechanisms could be used to shift cargo back onto trains. "If you think we're going to price traffic onto rail," he says, "you're living on a different planet."
But the European Commission's own efforts to bring freight rail into the borderless Europe have had little effect. Most EU members have already heeded the commission's call that they split their national railway networks into two operations: the railways themselves, and the rail-service operators. But national railways have been slow to cooperate in the next step -- a network of dedicated "Freight Freeways" across Europe with a single marketing service, a plan hatched in 1996. And Mr. Kinnock's proposal to allow outside operators onto national rail networks has met strong resistance: Politicians and railway operators in France, Belgium and Luxembourg argue for a more gradual path of cooperation among railway networks.
That cumbersome system of cooperation is how the Scan-Express operates, changing drivers and locomotives as it makes its way through Europe. As the German locomotive takes over in Padborg, rain spatters on the windscreen. Mr. Maas, the burly driver, leans forward to start the erratic old wiper, equipped with a handle for manual control inside the cabin, just in case. As the train slowly chugs toward its maximum speed of 63 miles an hour, Mr. Maas waxes affectionate about the Class 155 locomotive, built in 1975 in what was then East Germany.
"We got a radio on board in the early 1980s," he says, surveying an array of antiquated dials and handles, "but otherwise not a lot has changed since then."