7 minute read
VOLUME 40 • NUMBER
easily work in other countries, and the fact that the vital rail corridor from Antwerp to Basel relies on just two tracks.
Kunz said there is a need for a single European rail area with full interoperability, more investment in infrastructure, and a reasonable solution to the problem of coping with both passenger and freight rail demand. “All stakeholders need to have input,” he said.
MOVING RAIL FORWARD Also appearing on the stage during the supply chain session was Clemens Först, spokesman of the board of Rail Cargo Group, who began by saying that consistently moving 75 per cent of freight by road is not sustainable. “Rail is the only way to combine economic growth and climate goals,” he said. “We are now at a pivotal point – political will is building.”
Först spoke about the Railfreight Forward Initiative, instigated in 2018 by a group of rail operators across Europe to provide a common voice. It is aiming to increase the share of freight moving by rail to 30 per cent by 2030 – Austria and Switzerland are already at this level so it is up to the rest of Europe to catch up. One way to do this is to provide a level playing fi eld in terms of cost: trucking puts a hidden cost on society in terms of emissions, congestion and road casualties, which is absent in the rail sector but is not refl ected in the comparative price of moving goods by each mode; countries should provide subsidies to railfreight in order to refl ect this, he said.
Först also echoed Kunz’s comments about interoperability: driving a train across Europe should be as easy as driving a car, he said – but it is not, and often for political reasons. Rastatt threw a spotlight on those issues, as well as on the lack of resilience. A lobby for the railfreight sector in Europe has long been missing, he added; this has been refl ected in the lack of investment – “there are no votes in rail,” he said.
During the panel discussion following the presentations, Kunz said that things are changing, and a lot of investment is in the pipeline. However, the main corridors remain vulnerable and political considerations continue to block some developments.
Rail is also failing to take advantage of digitisation, it was agreed. Rail operators fail to provide enough information to their customers, and Jacques Vandermeiren said that more visibility would improve asset utilisation. That applies also to infrastructure operators: he added that the Port of Antwerp cannot get decent rail traffi c information from Infrabel, the Belgian infrastructure owner. “We don’t have a clue how many trains come in and out of the port,” he said. “This has to change, and as soon as possible.” Kunz agreed: “We get plenty of data from our customers and rail operators but nothing from infrastructure operators.”
Rail infrastructure is widely seen as a matter of strategic national importance, so it is perhaps not surprising that infrastructure owners remain largely under state control and are by defi nition state monopolies, with all the implications that has for ineffi ciency. However, there seemed to be no appetite for liberalisation or privatisation in the sector. Rather, a coordinated approach at EU level is seen as an urgent need.
Summing up the panel discussion, Verstraeten asked: “We are connecting Europe to Shanghai, why not Antwerp to France?” It is
a question of legislation, he felt, and urged industry to join forces and make a noise in Brussels. “Let’s make things happen in 12 months, not 12 years,” he said.
Speaking to the press after the session, Kunz questioned the assertion that there are no votes in rail, noting that youth are the voters of tomorrow and they are the people who care that rail reduces carbon dioxide emissions by 90 per cent. Furthermore, people sitting in traffic jams see plenty of freight vehicles around them and might start wondering why that freight doesn’t move by rail instead – and people sitting in traffic jams are also voters.
On the question of infrastructure, Kunz said that corridor managers have to be empowered as, at the moment, they are at the behest of infrastructure owners. In addition, there needs to be a means of guaranteeing slots for freight on the rails; who will invest in rolling stock if there is no guarantee of service?
OUTLOOK FOR TRADE EPCA’s Annual Meeting always closes with a lunch, wrapped around presentations to the winners of the European Youth Debating Competition and a speech by a high-profile speaker. This year that speaker was Pascal Lamy, former director-general of the World Trade Organisation (WTO) and former EU Trade Commissioner, and now chair of the Paris Peace Forum. Given the recent revival in the use of trade and tariff wars, this was a highly appropriate move by EPCA.
Lamy attempted to give his audience an understanding of the medium- and long-term factors shaping the industry. Some of these are clear, he said: demographic changes are increasing the proportion of the elderly in the population, while there is a huge expansion of the middle classes, especially in Asia, which is adding immensely to consumer demand; new technologies are emerging quickly, notably digitisation, AI and biotechnology; there is a new “political wave” in terms of ecology and a focus on plastics pollution; and the beginnings of the transition to renewable energies, with a likely impact on raw material prices.
What is less clear is the pace of global economic growth, which looks like being slower in Europe (around 1.5 per cent a year) than in the world at large (around 3.5 per cent) – and that assumes no repeat of the 2007/08 “surprise”. Lamy noted the recent rise in populism, nationalism and authoritarianism but said this should remain contained, noting that there has already been a reaction – although China will remain the big exception. Speaking of that, he saw no hope of a rapprochement between the US and China, which is likely to affect the US hegemony more than it hurts China – so brace for some turbulence!
That disconnection between the US and China will be particularly apparent in the technology sector, Lamy predicted, not least due to concerns about security vulnerabilities. This is not all doom and gloom, though, and could generate opportunities for tech companies in Europe and elsewhere in the world.
The potential for serious deglobalisation is less clear, but there are already signs of a move away from broad integration. Existing business patterns are set up to work with price and demand differentials, and globalisation is efficient – although it causes pain for some. The process of deglobalisation will be inefficient and will also cause pain and bring costs – Lamy mentioned Brexit as a prime example. However, the cost of disentanglement in the petrochemical sector will be too high, he said, and there is no political pressure for it to happen – the same is true in the food, automotive and consumer goods sectors.
Lamy then moved on to look at the implications of the new European Commission, which he predicted will be ‘greener’ than its predecessor and will also take a stronger stand on sovereignty issues in areas such as defence and trade. There will be increasing regulatory pressure, some of which will affect the petrochemicals sector, and a likely rise in carbon prices. Carbon price adjustments at borders are good in part, he said, but will increase the price of imports. More promisingly, there should be more investment in research and innovation under the new Commission.
COMING SOON In the short term, Lamy said, the EU will have to decide the nature of its relationship with the US and China; will the three systems converge or diverge? And in the very short term the impact of Brexit is still unknown. Lamy likened it to “a big vehicle moving very fast with no driver” and said that, if and when it takes place, the big question will be the nature of the future trade and economic relationship between the EU and UK. In the end, he predicted, there will be no difference – there will be no tariffs, though any regulatory divergence could cause problems. It would be “politically stupid” to do that though – a comment that was little succour to the Brits in the audience who have become used to political stupidity over the past three years – and would be costly. In his opinion it will be “BINO” – Brexit In Name Only.
Wrapping up proceedings, Marc Schuller said his main takeaway from the 2019 Annual Meeting is that paradigm change, especially in terms of sustainability, reminds us that nothing lasts forever and that ‘business as usual’ is no longer the answer. “Industry has reinvented itself before,” he said, “we must do it again.”
The final flourish, as always, was to announce the venue for the 2020 EPCA Annual Meeting which, to no great surprise, will be Budapest. The event will take place from 4 to 7 October and the main hotels in Pest are already booking up. More details will made available on the EPCA website, https://epca.eu.
CLEMENS FÖRST (OPPOSITE): DRIVING A TRAIN ACROSS
