THE RAIL CARGO BUSINESS LIFECYCLE

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THE RAIL CARGO BUSINESS LIFECYCLE

• Paolo Celentani
• Marketing Director
• Cargo Division
• Sofia, november 20, 2007

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Railways renewal
almost two centuries after the first train ran,
the railways are still a means of transport with
major potential, and it is renewal of the
railways which is the key to achieving modal
rebalance. This will require ambitious measures
which do not depend on European regulations alone
but must be driven by the stakeholders in the
sector. (White Paper - European transport
policy, Bruxelles 2001)
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The railways life cycle
21 century
2 half 20 century
Maturity
Decline
1 half 20 century
Development
19 century
Introduction
/ Rivitalization
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The transport modes life cycle
The rivitalization dilemma
21 century
2 half 20 century
Maturity
Decline / Rivitalization
1 half 20 century
Development
19 century
Railways
Road
Air
Introduction
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The vicious circle in the railway sector
MONOPOLISTIC STRUCTURE OF THE MARKET
LOW COMPETITIVENESS VS OTHERS
TRANSPORT MODES
GROWING NEED FOR PUBLIC SUBSIDIES
RAIL MARGINALIZATION
NOT SELECTIVE OFFER OF RAIL SERVICES
FURTHER LOSS OF MARKET SHARE
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Performance by modes for freight transport
EU 15 1970 - 2002
source EU DG TREN, 2005
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The state of the liberalization process
Source IBM Rail liberation Index 2007
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The traffic growth rate - Rail
2004 vs 2001 (Tons-Km Billions)
Average Growth Rate
5,1
7.349
World
6.704
4,70
2.347
306
Europe
2.041
7,90
2.528
516
Asia and Oceania
2.013
129
- 0,7
- 0,20
Africa
130
2.768
3,48
America
270
2.498
Source UIC
2001
2004
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Rail Freight Flows Projections up to 2020
Expected yearly growth 3-4
Source
EURAILINFRA
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Modal share evolution
Rail Freight Modal share
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The competitive situation for italian foreign
trade vs EST Europe
Market (Mil Tons) Export Import
0
20.000
40.000
60.000
80.000
100.000
Weight of the axis on foreign trade 27
35,3
2004
38,2
2005
CAGR 9,2
42,2
2006
Market Share in Tons
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What is behind the new competitive attitude of
rail ?

• The remotization / globalization of the
  production processes brings to a primary role of
  the logistic services
• The security problem and the tension on energy
  cost reduce the pressure of just-in-time and
  bring to a higher optimal shipping size
• Road transport has exhausted or reduced the
  development potential and creates serious
  problems of congestion
• The policy for a sustainable transport tend to be
  more effective

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TEN corridors
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The investiment efforts
Source Company Balancesheets 2003
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The commercial presence of Trenitalia in Europe
Trenitalia Group Companies in Cargo business in
Europe
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The commercial presence of Trenitalia in Europe
Logistics platforms - Terminals
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The commercial presence of Trenitalia in Europe
A regular service for Balkans
TRANSBALKAN The service connects Italy to
Jugoslavia, Macedonia, Bulgaria, Greece and
Turkey, from any area in Italy through the
Cervignano, Sofia, Thessaloniki and Istanbul
inland terminals. The connections take place
several times a week, with the possibility of
planning daily journeys too.This product
guarantees greater security for rail freight,
constant monitoring of goods throughout the
journey, and prompt notification about the
arrival of the cargo at its destination.