Opinion of the Economic and Social Committee on the 'Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions on "Trans-European Rail Freight Freeways"'
30. 3. 98 EN Official Journal of the European Communities C 95/21 Opinion of the Economic and Social Committee on the ‘Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions on “Trans-European Rail Freight Freeways”’ (98/C 95/06) On 3 June 1997 the Commission decided to consult the Economic and Social Committee, under Article 198 of the Treaty establishing the European Community, on the above-mentioned communication. The Section for Transport and Communications, which was responsible for preparing the Committee’s work on the subject, adopted its opinion on 16 December 1997. The rapporteur was Mr Kritz. At its 351st plenary session of 28 and 29 January 1998 (meeting of 28 January 1998) the Economic and Social Committee adopted the following opinion by 119 votes for, two votes against and two abstentions. 1. Background 1. 1. Since 1970 rail freight transport in Europe has declined by nearly a quarter, measured in tonne kilo- metres. At the same time the total freight transport market has increased by 70 %. This means that rail’s market share has declined to about 15 % of the total freight carried by road, rail, inland waterways and pipelines in the European Union. If current trends continue over the next decade, rail’s market share will fall to 9 %, while the market as a whole will expand by 30 %. These are global figures and they may give too 1. 2. gloomy a picture of the performance of Europe’s railways. Not all freight is suitable for carriage by rail; in fact, most of Europe’s freight is carried over short distances (under 250 kilometres), and in small consign- ments, and is therefore not normally a relevant market for rail. 1. 3. Transport of freight over long distances has increased, but rail transport has not always been able to offer competitive services in these markets. This is a major cause for concern, as long distance services with large volumes of freight are ‘ideal’ rail markets. 1. 4. Freight transport over longer distances in Europe generally means crossing national borders. The national focus of the European railways has left them handi- capped when dealing with border-crossing operations. They are to some extent lacking in technical interop- erability. International timetables are often hard to reconcile with national timetable requirements. Not all railway undertakings show a sufficient commercial interest in international freight operations. They do not seem to know the requirements of the European market and to be organized to take advantage of opportunities. railways (1). Its main objective was to halt the decline of rail freight and rail passenger transport in Europe. The strategy implies a ‘new kind of railway’ which is geared to be responsive to the needs of the customers. The plan to revitalize the railways includes the creation of a number of ‘Trans-European Rail Freight Freeways’ to tackle the specific problems of cross-border rail freight. 1. 6. The origin of the Rail Freight Freeway concept came from an advisory group appointed by Com- missioner Kinnock to look at the future role of rail in European transport. The group’s report was published in June 1996 and high on the priority list was ‘the establishment of a number of rail freight corridors where measures could readily be taken to improve the ability of rail to offer a competitive service’ (‘The future of rail transport in Europe’, June 1996, p. 14). It should be added that the advisory group was composed of transport users, railway operators and workers, acting in a personal capacity. 2. The Commission document 2. 1. ‘Rail Freight Freeways’ means designated corri- dors, or routes, for international rail freight transport. Existing lines are to be utilized, but in a more efficient way than today, through improved train paths (time- tables) and reduced border crossing time. 2. 2. The Freeway concept is focused on rail infrastruc- ture, where cross-border rail paths have to be planned, allocated, operated and charged in a new and more efficient way. 2. 3. The whole concept of Trans-European Rail Freight Freeways relies on voluntary implementation by infrastructure managers and Member States. The communication should be considered as a recommen- dation by the Commission on how freeways should be set up. In July 1996 the Commission published a White 1. 5. Paper on A strategy for revitalizing the Community’s (1) ESC opinion: OJ C 206, 7. 7. 1997, p. 23. C 95/22 EN Official Journal of the European Communities 30. 3. 98 As to the operation on a freeway the Commission 2. 4. concludes that: — a freeway should be open for fair, equal and non-discriminatory access to all train operators licensed in the Community; — the criteria for licensing train operators to operate on a freeway should follow the same principles as laid down in Directive 95/18/EC (1); — the criteria for the allocation of railway infrastruc- ture capacity and the charging of infrastructure fees should be in compliance with Directive 95/19/EC (2); — freeways should, subject to national regulations, be open to cabotage; — freight terminals on a freeway will open for fair, equal and non-discriminatory access to all train, road haulage and waterway operators as appropriate. 2. 5. A freeway is composed of two or more national infrastructure bodies. In order to facilitate and simplify the use of rail infrastructure, the Commission proposes the creation, by the relevant infrastructure bodies, of a ‘One-Stop-Shop’ (OSS) for each freeway. The main tasks of this single point of contact for train operators should be: — to identify capacity on the freeway; — to undertake path allocation; — to charge train operators for their use of the freeway; — to monitor and control performance of the freeway. 2. 6. The train path allocation process for inter- national rail freight is currently performed essentially on a national basis. Low international rail freight performance is frequently due to gaps between these national timetables. Furthermore, low priority is often given to freight traffic when allocating paths. Therefore, the Commission points out the important role for the OSSs to create train paths which are attractive to train operators and shippers, in particular with regard to journey times requested. It is also important to speed up (1) Council Directive 95/18/EC of 19 June 1995 on the licensing of railway undertakings (OJ L 143, 27. 6. 1995, p. 70); ESC opinion on the relevant Commission proposal, OJ C 393, 31. 12. 1994, p. 56. (2) Council Directive 95/19/EC of 19 June 1995 on the allocation of railway infrastructure capacity and the charging of infrastructure fees (OJ L 143, 27. 6. 1995, p. 75); ESC opinion on the relevant Commission proposal, OJ C 393, 31. 12. 1994, p 56. train path allocation decisions. The target should be that for regular paths, a decision should be made within seven working days, and for one-off paths within one working day. 2. 7. In most countries train operators have to pay charges for use of the infrastructure. The Commission underlines that the charging system must be non- discriminatory, transparent and simple. There should be a certain flexibility in charging levels, to ensure that charges can be competitive in relation to road freight transport. 2. 8. The existence of the single European market means that there should be no reason for checks at internal physical borders. Member States should give commitments to suppress border checks for customs, safety and phytosanitary purposes where they still exist. There should be mutual recognition of checks which have been carried out in the originating state. 3. Practical work under way 3. 1. The potential freeways should meet two basic criteria: they must first be commercially attractive from shippers’ point of view, and second, they should have sufficient capacity. This implies that freeways are likely to be concentrated on the major international freight transport corridors which today are served by both road and rail operators. Several corridors are considered for the creation 3. 2. of pilot freeways. The transport ministers of the Nether- lands, Germany, Austria, Switzerland and Italy have agreed to develop freeways on the following routes: (a) Rotterdam — Ruhr/Rhine — Basel — Milan — Genoa — Gioia Tauro (South Italy); (b) Hamburg/Bremen — Nuremberg — Munich — Innsbruck — Brenner — Verona — Brindisi (Adri- atic coast); (c) Rotterdam/Hamburg/Bremen — Nuremberg — Passau — Vienna. The Nordic railways will also be involved in these north-south pilot freeways. Among other proposed freeways the following should be mentioned: (d) London — Sopron (Hungary), with Sopron as a mega-hub to central and eastern Europe; (e) Wolfsburg (Germany) — Barcelona; (f) Muizen (Antwerp) — Luxembourg — Lyon. 30. 3. 98 EN Official Journal of the European Communities C 95/23 The first pilot projects to start operation in 1998 will probably be (a), (b), (c) and (f) on the above list. — on the capability of railway undertakings to be responsive to the needs of customers; and 3. 3. At the end of 1996 the Commission established a high-level group of personal representatives of the transport ministers. This group has been instrumental in shaping the freeway concept, and is active in the discussions on specific pilot projects. 3. 4. The Community of European Railways (CER) represents railway companies of the EU, Norway and Switzerland. The CER has set up a number of working groups to look into practical issues raised by freeways and has regular discussions with the high-level group and the Commission. To identify the sort of technical problems to be overcome and to develop an understand- ing of the operation of a freeway, the CER performed a simulation on two corridors from Benelux to Italy. The results are presented in CER’s report ‘European Rail Freightways: Proposal to the European Commission’ (published in April 1997). 3. 5. Other organizations have also been involved in the practical work on the future development of free- ways. The European Shippers’ Council submitted to the Commission in April 1997 a paper on ‘Developing successful rail freight freeways: A shippers’ framework’. The Freight Leaders and Logistics Club, representing some of Europe’s largest manufacturers and transport companies, have investigated potential freeway routes. 4. General comments 4. 1. There is a need to radically change the way in which the European rail freight market functions, especially when it comes to border crossing traffic. For that reason the Economic and Social Committee welcomes this communication from the Commission, and sees the creation of freeways as an important step towards revitalizing the European railways. 4. 2. In its Opinion on the White Paper on a strategy for revitalizing the Community’s railways the Committee stressed that ‘in view of the extremely difficult situation, there is an urgent need for action’, and ‘broadly speaking the Committee supports the creation of freeways’ (1). 4. 3. The freeways are a voluntary venture. Therefore, the Committee underlines that their success depends ultimately: — on the willingness of Member States and of national infrastructure managers to co-operate on freeways; — on the readiness of Member States to provide train operators with the necessary managerial freedom. 4. 4. The Committee has noted from the practical work under way that freeways could be operable early in 1998. This is due to the unique character of the freeways project, in the sense that: — no changes to Community legislation are needed; — no immediate infrastructure investments are needed, as existing infrastructure will be utilized; — no immediate investments in rolling stock or equip- ment are needed as existing ones will be used; — trains would continue to operate on the basis of existing but, where easily possible, simplified procedures. 4. 5. The new regulatory framework contained in Directives 91/440 (2), 95/18 and 95/19, is intended to introduce a more commercial impetus into European rail freight transport. The Committee therefore recog- nizes that the freeways concept is not in itself a new market liberalization measure. It is a pragmatic approach to tie national rail freight transport operations together into trans-European rail freight networks. 4. 6. Directive 91/440 sets out rights of access to railway infrastructure in the Community, and the other two directives establish requirements relating to licensing of railway undertakings (95/18) and to allocation of railway infrastructure capacity and the charging of infrastructure fees (95/19). These directives have not yet been completely transposed into national legislation. This is a problem for rail transport in general, but particularly for the freeways. As of 20 October 1997 the implementation of Article 10 in 91/440 (which provides the access rights) remains to be notified by Spain, Luxembourg and Italy. As regards directives 95/18 and 95/19 only Austria, Denmark, Finland, Germany and Sweden had, by 20 October 1997, notified the Com- mission of complete or partial transposition. These directives should have been transposed not later than 27 June 1997. This situation is unacceptable, and the Committee therefore urges Member States to immedi- ately implement these three directives. The success of freeways must not be endangered because of a lack of (1) ESC opinion: OJ C 206, 7. 7. 1997, p. 23. (2) Council Directive 91/440/EEC of 29 July 1991 on the development of the Community’s railways (OJ L 237, 24. 8. 1991, p. 25); ESC opinion on the relevant Commission proposal: OJ C 225, 10. 9. 1990, p. 27. C 95/24 EN Official Journal of the European Communities 30. 3. 98 the legal framework at Member State level. Ultimately, the Commission must take legal action against Member States that have not yet transposed these directives into national law. 4. 7. Infrastructure managers and Member States seem to have had a large influence in the planning stage of the freeways. Even if the technical aspects on freeway operations are key issues, the Committee is of the opinion that shippers and railway undertakings must have a stronger voice in the current discussions on selecting corridors and performance criteria. They are much closer to the market than the infrastructure managers and Member States. The Committee is pleased to see an early start of 4. 8. freeway operations. It has to be recognized, however, that the first freeways are designed to rely mainly on existing rail freight flows. Existing traffic will have shorter journey times and higher punctuality than before. This is the first step in the development of freeways, but the next step must be to increase rail’s market share. Train operators have to set revenue targets in business plans, in close contact with existing and new customers. They also need to show evidence of an improved service offer to shippers. 4. 9. With reference to the preceding point, the Com- mittee notes that there is very little in the Commission document about the future markets for the freeways. In this connection the Committee finds it essential that the development of freeways accommodates the needs of conventional rail freight customers. As a concept it may seem less interesting than combined transport but transport by conventional rail wagon methods represents the dominant part of the railways’ business, even if it is declining. Having said this, railway undertakings must attract new customers, for example by developing efficient intermodal systems. The transport user per- ceives road haulage as the benchmark for freight transport in Europe. Shippers are open-minded about their choice of mode of transport but need convincing that rail can provide the service they require regarding price, reliability and speed. 4. 10. The likelihood of significantly higher volumes of goods and of many more freight trains running on individual lines raises the question of how much unused capacity is available in the main rail freight corridors. The Committee believes it is essential that the national infrastructure managers in cooperation with the OSSs do their utmost to identify unused rail freight capacity, to reduce the problem of bottlenecks, and to resolve conflicting freight and passenger demand for train paths. The possibility of establishing several parallel north-south and west-east freeways, of running longer trains, of making the traffic control systems more efficient and of achieving technical interoperability, should be explored. Sooner or later, with growing demand for freeway operations, it will be necessary to invest in improved or new rail infrastructure. It is important to clarify when this will occur, to allow infrastructure managers and train operators to plan for future investments. 4. 11. A freeway will often be one part of an intermodal transport chain (road/rail; sea/rail). Terminals are many times weak links in intermodal systems, and can increase the cost of door-to-door transport services considerably, e. g. by unnecessary delays. In the view of the Committee, the key role of terminals for a successful development of rail freight transport on freeways has been underem- phasized by the Commission in its communication. Improving train paths (timetables) is a necessary, but not sufficient, condition for better intermodal freight transport operations. The Committee therefore finds it essential that infrastructure managers, railway under- takings and shippers together develop efficient and well functioning terminals. 4. 12. The Commission has stressed that freight ter- minals on a freeway should be open for fair, equal and non-discriminating access to all train, road haulage and waterway operators. It has probably underestimated that open access to freight terminals is a complicated issue, due to the different forms of ownership and different types of terminals. The Committee therefore proposes that further considerations should be given to the matter of open access to terminals. 4. 13. Employment in the European railway sector has gone down over the latest decades, mainly because of declining traffic volumes and rationalization. The aim of the freeways project is to make European rail freight more competitive, in order to increase the volume of goods carried by rail and rail’s market share. Successful development of the freeways would at least halt the decline in employment. In its opinion of June 1997, the Joint Committee on Railways stressed that the development of freeways needs personnel trained for different kinds of infrastructures, and that this could be done in a way similar to what was carried out successfully by the railways and their personnel for the Thalys and Eurostar services. 4. 14. Where demand and commercial opportunities exist, freeways should be extended beyond the borders of the Community. It is probable that the largest potential is to be found on links with Hungary, the 30. 3. 98 EN Official Journal of the European Communities C 95/25 Czech Republic and Poland. It is up to the Commission and the Member States to further explore how access by third countries to some pilot freeways could be made possible. Committee is of the opinion that customers must know both the structure and the level of the infrastructure charges when negotiating transport prices with railway undertakings. 5. Specific comments 5. 2. Access rights 5. 1. Charging for the use of rail infrastructure 5. 1. 1. The CER has estimated that the infrastructure charges amount to 20 to 50 % of the price that rail freight customers have to pay train operators. On some routes the infrastructure charges may be so high that freeway services cannot compete with road transport. The charging systems vary considerably 5. 1. 2. between Member States. In some countries train oper- ators pay nothing when using the infrastructure, in others — like Germany — charges are high. 5. 1. 3. In the short term freeway charges are likely to be based on the existing infrastructure charging systems, which will mean they are the total of the national tariffs set by each individual infrastructure manager along a freeway. 5. 1. 4. In the light of these circumstances the Com- mittee considers the present systems for infrastructure charges as being a very serious problem. In order to create favourable conditions for freeway operations, solutions need to be found along the following lines: a) Member States must apply the same charging prin- ciples. The Commission is currently undertaking a study with the view of bringing the existing charging systems closer together. The Committee urges the Commission to give the highest priority to this study, and to involve not only railways but also shippers in this work. b) Application of common charging principles does not mean harmonized charges. The level of charges should reflect the relevant costs. Existing rights of access to railway infrastruc- 5. 2. 1. ture are set out in Directive 91/440. For railway undertakings operating international combined trans- port services, the directive provides a total right of access as well as the right to load and unload cargo (cabotage is excluded). For international groupings of railway undertakings, access rights are limited to the Member States in which they are established as well as a right of transit in other Member States, but loading and unloading in transit countries is not permitted. 5. 2. 2. The Committee agrees with the Commission that access to freeways should ideally be open to all licensed Community railway undertakings who meet the requirements in Directives 95/18 and 91/440. A number of Member States agree with this, but the Committee is aware of some Member States who prefer a more cautious approach. The Commission points out that it is essential 5. 2. 3. that railway undertakings can acquire business in a Member State other than the one in which they are licensed, and operate train services to and from that second Member State without being obliged to enter into a classical cooperation agreement with a railway undertaking from that State. If locomotives and drivers have to be provided, this could be done through normal commercial contracts between the two undertakings. The Committee endorses these Commission proposals. 5. 3. Freeways and competition law 5. 3. 1. The Commission document is rather vague as to whether cooperative agreements for establishing the OSSs, and cooperation between railway undertakings on freeways, fall under the prohibition of Article 85(1) of the EC Treaty. This is understandable due to the complexity of EC competition rules. c) The high level of infrastructure charges on some routes creates a risk that railway undertakings will not be able to compete successfully with road hauliers. In the view of the Committee, Member States should be aware of this fact and act accord- ingly. 5. 3. 2. When it comes to evaluating how competition is affected, the Committee is of the opinion that a clear distinction should be made between agreements required for the establishment of an OSS, and agreements between railway undertakings. d) Infrastructure charges must be transparent and non-discriminatory. They represent a — often sub- stantial — part of the price railway undertakings offer their customers for using the freeways. The 5. 3. 3. As to the former type of agreements, close cooperation between infrastructure managers is inherent in the freeway concept. Without agreements on planning, allocating and operating cross border rail paths, there C 95/26 EN Official Journal of the European Communities 30. 3. 98 will be no freeways. Furthermore, rail infrastructure managers do not compete with each other in a market. In the view of the Committee, agreements between infrastructure managers in order to establish and operate freeways would not fall under Article 85(1). As to the second type of cooperation, the 5. 3. 4. situation is different with regard to competition. Railway undertakings operate in a market, and could combine in technical and commercial agreements. Whether or not this type of cooperation will prevent, restrict or distort competition within the common market has to be decided on the basis of a case-by-case assessment. The Committee considers it probable that Article 85(3) might apply in many cases, with individual exemptions as a result. A key issue in this connection must be to define the relevant market. 6. Summary and conclusions have not yet been completely transposed into national legislation. This situation is unacceptable, and the Committee therefore urges the negligent Member States to immediately implement these three directives. The success of freeways must not be endangered because of a lack of the legal framework at Member State level. Ultimately, the Commission must take legal action against Member States that have not yet transposed these directives into national law. The first freeways (in 1998) are designed to rely 6. 5. mainly on existing rail freight flows, which should mean shorter journey times and higher punctuality than before. The next step for railway undertakings must be to attract new customers and to increase rail’s market share. In this connection it is worth noting that transport users perceive road haulage as the benchmark for freight transport in Europe. Therefore, they need convincing that rail can provide the service they require regarding price, reliability and speed. 6. 1. The national focus of the European railways has left them handicapped when dealing with border- crossing transport of freight. Technical interoperability is to some extent lacking. International timetables are often hard to reconcile with national timetable requirements. Low priority is often given to freight traffic when allocating paths. Not all railway under- takings show a sufficient commercial interest in inter- national freight operations. 6. 6. Terminals are often weak links in intermodal transport systems (road/rail; sea/rail), and can increase the cost of door-to-door transport considerably. In the view of the Committee, the key role of terminals for a successful development of rail freight transport on freeways has been underemphasized by the Commission, and particularly the problem of open access, as there are different forms of ownership of terminals. There is a need to radically change the way in 6. 2. which the European rail freight markets function, especially when it comes to border-crossing traffic. Therefore, the Committee welcomes this communi- cation from the Commission on Trans European Rail Freight Freeways. The creation of freeways will be an important step towards revitalizing the European railways. The freeways will offer important possibilities for increasing the railways’ efficiency and competi- tiveness. 6. 3. As freeways are a voluntary venture, the Com- mittee underlines that their success ultimately depends: — on the willingness of Member States and of national infrastructure managers to cooperate; — on the capability of railway undertakings to be responsive to the needs of the customers; and — on the readiness of Member States to provide railway undertakings with the necessary managerial freedom. 6. 4. The new regulatory framework for rail transport in Europe, contained in Directives 91/440, 95/18 and 95/19, is intended to introduce a more commercial impetus into rail freight transport. These directives Employment in the European railway sector 6. 7. has gone down over the latest decades. Successful development of the freeways would at least halt the decline in employment, as the aim of the freeways project is to make rail freight more competitive, in order to get more freight on rail. The charging systems for the use of rail infrastruc- 6. 8. ture vary considerably between Member States which, according to the Committee, constitutes a very serious problem for the development of the freeways. The Committee therefore asks the Commission to give the highest priority to complete its current study on common charging principles. Infrastructure charges must be non-discriminatory, cost-related and transparent. The Committee regrets that the high level of infrastructure charges on some routes creates a risk that railway undertakings will not be able to compete successfully with other modes of transport. 6. 9. Freeway operations mean cooperative agree- ments between infrastructure managers, and might include cooperation between railway undertakings. The Committee is of the opinion that a clear distinction should be made between agreements required for the establishment of an OSS, and agreements between 30. 3. 98 EN Official Journal of the European Communities C 95/27 railway undertakings. The former type of agreements should not, in the view of the Committee, fall under the prohibition of Article 85 (1) of the EC Treaty. As to cooperation between railway undertakings, the situation is different with regard to competition. Whether or not this type of cooperation will prevent, restrict or distort competition within the common market has to be decided on the basis of a case-by-case assessment. Brussels, 28 January 1998. The President of the Economic and Social Committee Tom JENKINS Opinion of the Economic and Social Committee on the ‘Proposal for a Council Regulation (EC) amending Council Regulation (EEC) No 2299/89 on a Code of Conduct for Com- puterized Reservation Systems (CRSs)’ (1) (98/C 95/07) On 5 August 1997 the Council decided to consult the Economic and Social Committee, under Article 75 of the Treaty establishing the European Community, on the above-mentioned proposal. The Section for Transport and Communications, which was responsible for preparing the Committee’s work on the subject, adopted its opinion on 19 January 1998. The rapporteur was Mr Moreland. At its 351st plenary session of 28 and 29 January 1998 (meeting of 28 January 1998), the Economic and Social Committee adopted the following opinion by 112 votes for, 2 votes against and 3 abstentions. 1. Introduction 1. 1. Airline computer reservation systems (CRSs) are extremely powerful marketing tools. They enable travel agents to access the schedules, fares, etc. of the vast majority of scheduled airlines throughout the world. Bookings, even for obscure routings, can be confirmed instantaneously and tickets priced and issued. CRSs have undoubtedly brought major benefits for airlines, travel agents and consumers. 1. 2. However, they are also open to abuse. Modern CRSs were developed initially in the United States by individual airlines. They were invariably biased in favour of the owning carrier. Because of the impact of such bias on fair competition the US government (1) OJ C 267, 3. 9. 1997, p. 67. introduced regulations governing the use of CRSs in 1984. The EU followed with its own, more detailed rules in 1989 (2), which were revised in 1993 (3). 1. 3. Regulation of CRSs has been a success. The original bias, which caused so much concern, especially for smaller airlines, has been removed. Many major airlines no longer see any benefit in owning part of a CRS and have sold all or part of their shareholdings. (2) Council Regulation (EEC) No 2299/89 of 24 July 1989 on a code of conduct for computerized reservation systems (OJ L 220, 29. 7. 1989, p. 1); ESC opinion: OJ C 56, 6. 3. 1989, p. 32. (3) Council Regulation (EEC) No 3089/93 of 29 October 1993 amending Regulation (EEC) No 2299/89 on a code of conduct for computerized reservation systems (OJ L 278, 11. 11. 1993, p. 1); ESC opinion: OJ C 108, 19. 4. 1993, p. 16