New report finds increase in non-incumbent operators in the European rail freight market

The recently published 9th Annual Market Monitoring Report of the European Regulatory Bodies has confirmed that the number of non-incumbent operators in the rail freight market is continuing to grow throughout the European Union (EU). 2019 saw non-incumbent operators pass the milestone of one third of the rail freight market, accounting for 35 per cent of national rail freight markets on average.

Although domestic incumbent operators remain the dominant player in all national markets, it is clear that the rail freight market is becoming increasingly diverse. The share of new market entrants increased by three percentage points in 2019 to 48 per cent of national markets on average.

Importantly, this growth came primarily from the non-incumbent market, namely railway undertakings which are not an incumbent operator in any country. This increased from a 32 per cent market share in 2018 to 35 per cent in 2019. This all suggests that alternative operators are increasingly becoming more attractive to end-users due to the added value of their service offer.

The growth of non-incumbent operators is a longer-term trend. The market share of non-incumbents increased from 27 per cent in 2015 to 35 per cent in 2019. In order to reach the EU’s objective of a 50 per cent growth in rail freight volumes by 2030 and doubling volumes by 2050, it is essential that European and national support measures for rail freight are equally available to all rail freight undertakings, be they incumbent, non-incumbents or new market entrants.

President of the European Rail Freight Association (ERFA), Dirk Stahl, said: “It is clear that non-incumbent operators are increasingly becoming a key cornerstone of the European rail freight market. This is vindication of the liberalisation process which was carried out in the rail freight sector. It confirms that the approach taken to support the sector throughout the COVID-19 pandemic, namely the waiving and reduction of Track Access Charges, has been the correct and appropriate response by the European institutions and some national governments. Given the significant size of the new-market entrants as a market share, all support measures going forward must continue to be non-discriminatory.”

ERFA‘s Secretary, Conor Feighan, continued: “Although the latest figures are welcome and show that we are on the right path to market opening, more needs to be done. We still have a number of Member States where there are barriers to entry which continue to prohibit competition. We also need to ensure that revised State Aid Guidelines for Railway Undertakings ensure fair treatment for all market players.”