The Finnish Rail Regulatory Body investigated the views of the representatives of the users of goods transport services on the market
The Regulatory Body must consult the users of goods transport services regarding the railway transport market every two years. According to the statements received, the development of the industry is most hindered by the lack of competition, which is caused by high barriers to market entry. Finland’s railway infrastructure also has deficiencies.
The Finnish Rail Regulatory Body requested statements about the current status of the railway goods transport and its development through Lausuntopalvelu.fi. The Regulatory Body requested especially to comment on the functionality, availability, customer orientation, pricing and future prospects of services, as well as terminal service functionality. The statements were received from Finnish Forest Industries, Finnish Freight Forwarding and Logistics Association and Yhteinen Toimialaliitto ry.
According to the statements, the lack of competition hinders the development of the sector. Due to the lack of competition, prices remain high, as a result of which the railways have lost market share to rubber wheel traffic. The structure of the market also slows down the development of the industry, which means that new services cannot be brought to the market sufficiently, and there are problems with the availability of services anyway. In Finland, for example, there are no rail transport services available for container and trailer transport. Finland also lacks the half-train size category entirely, and services are limited for companies on weekends. The special stock is owned by one company, so there is not even a partially competitive market for them. In a high economic period, there is a direct shortage of carriages, and also the shortage of personnel limits critical transportation on a case-by-case basis.
The statements also stated that the lack of competition is due to high barriers to market entry. Finland's railway track width, which differs from the Western European standard, makes it difficult to buy equipment from abroad. In terms of goods transport, locomotives and their availability at reasonable costs is a key factor influencing entry into the sector. According to the statements, the most cost-effective and fastest way to increase competition would be to allow the permanent use of carriages registered abroad in Finnish domestic transport. If it were possible to permanently rent carriages from the EU's internal market, e.g. the Baltic area, the threshold for operators to enter the market would be lowered.
The existence of a stock company would also promote flexible service supply. The role of a stock company would naturally be to take care of the reuse or scrapping of old stock. By renting stock, new operators could enter the market with a low threshold.
According to the statements, there are deficiencies in Finland's railway infrastructure. The single-track rail network is sensitive to disturbances and inflexible in terms of schedules. The single-track network also causes bottlenecks in terms of capacity on busy track sections.
All in all, a lot of growth potential is seen in railway goods transport. If more competition and infrastructure were developed in the sector, transportation could be moved from rubber wheels to rails, e.g. in the forest industry, metal industry, chemical industry and mining industry.
All statements can be read as such at Lausuntopalvelu.fi (in Finnish or Swedish).
You can find more info
Special Adviser Mertti Anttila, e-mail firstname.surname(at)traficom.fi
Special Adviser Kari Lavaste, e-mail firstname.surname(at)traficom.fi