Competition arrives in France’s rail freight market

Competition arrives in France’s rail freight market    Rail operator Connex has entered France’s international rail freight business as the first competitor to SNCF, the country’s state-controlled railway company.
   France was widely regarded as one of Europe’s most protectionist countries in its treatment of the cross-border rail market despite a European directive that allowed competition on international rail corridors across the European Union from March 2003.
   “Two years after the opening of the international rail freight market in 2003, Connex, via its CFTA Cargo subsidiary, expands its rail freight activities to the French market,” Connex said. The French company has won a contract to carry lime between the Meuse area of France and the German state of Sarre for a group of German steel producers.
   Association des Utilisateurs de Transport de Fret, the French association of freight transport users, hailed the arrival of the new entrant as “a historic event that French industrial companies, as rail freight customers, have been expecting for a long time.”
   “It’s embryonic,” said Didier Leandri, of the French Transport Users’ Association. “We hope that this will encourage others.”
   Connex is already established in the rail freight markets of Germany and the Netherlands.
   To provide these services, Connex will be backed up by its two subsidiaries CFTA Cargo in France and Connex Cargo Logistics in Germany. Driver training, as well as the engines and rail cars used, will be certified according to the obligations set out in the safety standards applicable to SNCF and the German railroad Deutsche Bahn.
   “Germany, a liberalization model, has had a positive experience of 10 years since opening its market,” the French association of freight transport users said. It said many German private rail operators now control a market share of 5 to 8 percent and the share of rail freight in Germany has stabilized.
   However, Georges Di Lallo, chairman of the rail commission of the Transport Users’ Association, warned: “The advent of competition does not resolve the problems experienced by companies today: go-slows, deficient IT and delays.”
   After allowing competition in its cross-border market, France will open its domestic rail freight market by March 2006. This policy was part of a compromise between the French authorities and the European Commission concerning the restructuring of the rail freight arm of SNCF, Leandri said.