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22. WP1: Logistics Requirements
January 10th, 2008
Final Deliverable WP1

The analysis in this work package combines a top-down modelling approach and a bottom up approach based on interviews with potential users.

The top-down modelling approach clearly shows that a RETRACK rail freight service can attract cargo from the following modes:

Existing long distance rail transport: 56.000-187.000 ton per year.

Long distance road transport: 70.000-234.000 ton per year.

Maritime transport North Sea Black Sea: 26.000-100.000 ton per year.

Import/export from TRACECA countries: 38.000-150.000 ton per year.

Total RETRACK potential from these four target markets adds up to 212.000 to 824.000 tons per year, which is even a conservative estimate. This would be sufficient to start a rail freight service in the corridor with a frequency from 2 up to 8 times a week.

The interviews also reveal potential in the following four market segments:

1. Dry and liquid bulks: larger chemical companies like BASF, Dow, Degussa, etc, are increasingly setting up manufacturing activities and finding new customers in Romania, Turkey, Ukraine, Russia and the Caucasus. This requires transport of supplies to these sites, and also transport to Western Europe. In fact, the private operators which are part of the RETRACK consortium are currently already negotiating with a number of chemical companies to use the RETRACK rail freight shuttle between Germany and Constanza.

2. Special/oversized cargo: The RETRACK rail freight service will provide an opportunity for Eastern European steel and automotive manufacturing to transport their finished goods to Europe. Particularly in Slovakia, there is interest in using the RETRACK rail service.

3. Maritime containers: Rotterdam, Antwerp and Constanza will continue to grow in the next 5 to 10 years and the objective is to make increased use of rail transport. Several major logistics service providers report increasing traffic towards Eastern Europe, with up to 10 maritime containers per week each. Several shipping lines are also interested in using the RETRACK rail service.

4. Swap bodies: In the continental market for swap bodies, the RETRACK shuttle offers possibilities, especially for large retail groups with interests in Eastern Europe, like Carrefour and Tesco.

This potential can be realized if the following crucial requirements will be met:

Cost. Intermodal rail transport has to be 10-15% lower then road transport to compensate for weaker performance on other performance indicators. The top down approach reveals that these cost advantages are realistic on several long distance D2D connections in the corridor if the number of stops is limited.

Transit time and reliability. The intermodal rail transit time has to be competitive with road transport but above all reliable. The top-down modelling approach reveals that transit time is similar on distances of 600 to 800 km and shorter on longer distances, though this also depends on the number of stops. Road transport is in general more reliable and quite predictable. A new rail service should therefore focus on interoperability issues and coordination between countries in order to avoid delays.

Safety and security. The new rail freight service should offer a safe and secure way of transportation, reducing the risk of accidents (chemicals and dangerous goods), theft and damage (containers and swap bodies). In general, safety and security is a strong point of rail freight transport compared to road transport.

Flexibility. Potential customers want to create flexibility in logistics processes, able to meet changes in demand. Road transport can be used in addition to rail transport to provide this flexibility.

The start of a rail freight service in the corridor Rotterdam-Constantza requires a pragmatic approach, and a dynamic view on the concept development. Some anchor customers (chemical cargo between Germany and Constantza) are the base to launch a rail service and this might start as a block train. Other customers (e.g. containers) can complement the block train and interest from new customers should push the concept in the direction of a public shuttle service. The requirements of the launching customers are crucial in the decision of the origin and destination of a block train concept. Demand and requirements from other customers should be leading in the decision to move towards a shuttle service concept. The top-down modelling approach indicates significant cargo potential in Germany, Austria, The Netherlands as well as Hungary and Romania, but the decision on the number of stops and the location of stops should be driven by customer demand and requirements.

The Report was finalized in December 2007 and provides a more thorough analysis of the logistics requirements.

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