Europe sees modal shift from air to road and rail

Rail is actually now being viewed as a possible alternative to airfreight in some parts of the world, but the chances of that happening in SA “are extremely slim”, according to voices in the freight industry. It didn’t even merit consideration, said one, with rail still battling just to overcome the road challenge for general, containerised freight in this country, and “failing miserably”, he added. Airfreight being substituted by rail in SA is just not in anybody’s vocabulary. But in Europe, even the express delivery market is currently experiencing a modal shift from air to road AND rail. Rising fuel surcharges, the economic slowdown and government regulation are all factors driving express and parcel delivery companies to consider alternative modes of transport as they look to minimise the costs of air services. A report in International Business Logistics (IBL) said that “this shift will favour rail in particular, as both freight and express players look to capitalise on the low cost alternative that rail networks offer”. With the serious ups and downs in the oil price in the past 18 months, and airlines’ fuel surcharges following the same volatile path, freight customers and operators have been watching rates in both the domestic and international air express segments fluctuate disturbingly. These sudden price shifts cannot be planned for in advance, and the user/ operator market has begun to have its doubts about the continued use of a mode with such uncertain costs. This has led to the express and parcel delivery companies starting to see road and rail as viable alternative modes of transport – due, the IBL report added, “to their superior cost profile and service capabilities compared with air services”. Indeed, in the mature markets of Germany, France and the UK, express operators are already increasing their use of the rail sector, especially in international delivery services on the big trade routes between European countries. News is that express operators such as Time Matters (Germany), DHL (UK), Business Post (Same Day) UK and Swiss Post are already offering express services through the rail network to serve sameday and next-day domestic delivery requirements. Meanwhile, it also appears that US operator FedEx has plans to team up with the French rail network to set up high-speed TGV trains running at 300- kilometres-per-hour in the Euro Carex (Cargo Rail Express) project. This could prove to be a viable solution for time-definite deliveries, and may help to reduce reliance on air networks for domestic and international deliveries within the EU. While for the moment road transport is seen as a cost-effective method for moving consignments within the European Union (EU) – already accounting for about 80% of the total express market value in the developed markets of Germany, the UK and France – cost factors are disturbing its supremacy. It is reported around Europe that road congestion charges in central London, Stockholm, Norway and various other countries are all now acting in favour of the rail mode. And, although express door-todoor delivery has recently tended to use intermodal transportation for both domestic and international segments, there is also a distinct change of tune here. A number of commentators expect that, in the medium- to long-term, there will be a definite move to rail transport over road and air.