Mega-ships spur growth in Europe’s railways

While Panama’s “logistics hub” lags:

Not only are investments surging in US railroad networks, but mega ships are demanding public and private railroad sectors in Europe to pick up steam. An extensive survey of these phenomena is reported in the January 23 edition of the Journal of Commerce by Special Correspondent, Malcolm Ramsay. “With the largest mega-ships now carrying up to 19,000 twenty-foot-equivalent units, modern ports need the capability to transport huge volumes of containers in a short period of time to beat congestion and keep shipments moving,” he points out.

“This puts strain on existing rail links and increases demand for multiple rail connections and operators to service ports’ hinterland.“As a result, competition and demand in Europe’s containerized rail market is growing, with a series of investments and technological innovations paving the way for increased rail connectivity on the continent.

Some ports, such as Hamburg and Bremerhaven transport 50 percent or more by rail, he points out. Throughout Europe, ports are reporting growth in rail transport and data from the Port of Duisburg, one of the leading containerized rail hubs serving North Europe, suggests annual growth in rail of around 5 percent.

Mega-ships spur growth in Europe’s railways

A number of ambitious projects such as the expansion of rail links to the ports of Bremerhaven, Hamburg and Rotterdam and investment of hundreds of millions of euros in the development of rail hubs in Northern Italy, are driving a new wave of rail container companies, Ramsay reports.

The ports of Rotterdam, Antwerp and Hamburg are among the most heavily developed in terms of container traffic and between them handle almost 30 million TEUs per year. However it is the German ports of Hamburg and Bremerhaven that lead in terms of the percentage of traffic that moves by rail.

Ramsay quotes Gerhard Oswald, managing director of rail consulting company GoMultimodal, who said: “The European container market in 2015 was marked by strong export performance from Germany, which remained number one in Europe. More containers are handled by rail to and from the port of Hamburg than for the other three major European ports of Antwerp, Bremerhaven and Rotterdam combined.”

Railway links

One of the largest initiatives to absorb incoming container traffic into the rail network is the Trans-European Transport, or Ten-T project. This high-level strategy aims to build core network corridors between key European countries and will closely integrate rail and sea container traffic and drive further competition.

An estimated 13.1 billion euros will be invested by 2030 and the initiative will see new rail networks stretching from Romania’s Black Sea coast to the Atlantic coast in Portugal.

New technology

“Alongside investment in new rail links, one of the largest drivers for change in the sector is expected to be the introduction of new technology to tackle the plethora of standards and specifications that container traffic crossing the continent faces.

“The Rail Runner system is a technology that allows containers to be loaded on regular reinforced rail trailers without the need for heavy lifting equipment, taking some of the difficulty out of switching from road to rail,” Ramsay reports.

“The Italian state is now trying to support rail transport as much as possible both as regards the infrastructure as well as incentives for intermodal services…in order to offer a southern gateway alternative for the cargo exchanged by South and central Europe countries with east of Suez and Mediterranean markets,” said Daniele Testi, director of marketing & corporate image at Group Contship Italy.

As a high proportion of container traffic arrives in Europe from Asia via the Suez Canal, the ability to unload cargo in Italy potentially saves additional transport time via the Atlantic to reach northern European ports.“Private rail operators have increased their market share in Italy from 5 percent in 2008 to 33 percent in 2014 and this reflects the effects of intensive liberalization and the high quality of services and integrity along the supply chain,” Testi said.

“Today the port of La Spezia dispatches approximately 35 percent of its total throughput via train which is four times more the average in Italy and the firm aims to increase total dispatch by rail to 50 percent by lengthening the internal rail tracks and optimizing the operation of the trains in the hinterland.”

Contship has already focused significant investment on its terminal at La Spezia and plans to invest a further 200 million euros in order to improve the terminal capacity from 1.4 million TEUs per year to 1.8 million. In 2015 the port became the first Italian gateway able to handle ships with capacities of 16,000 TEUs and up.

A second prospective area of growth lies with Eastern Europe, as rail companies look to invest in cross-land links to Western European markets. As part of the Ten-T project, new rail links are proposed from Greece directly to Germany and France, says Ramsay’s report.

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