VTG calls for industry support post-pandemic

The European rolling stock lease and rail logistics company VTG has set out a programme for industry after the pandemic, and it puts rail freight at the heart of recovery. The company says supporting the railway after the coronavirus crisis is something everyone needs to understand, and agree on a unified plan.

Rail freight transportation must receive more political and regulatory support, says a policy briefing and statement attributed to VTG and chief executive, Heiko Fischer. Yet, while a pan-European solution is proposed, there is very little co-ordinated supranational response to the coronavirus crisis. With individual nations following their own sovereign programmes, the routes of international trade, served best by the railways, are suffering disruption.

Significant challenge of maintaining flows

Despite the challenges, rail freight transportation is proving to be the backbone of supply chains during the crisis, says the policy brief from VTG. The resilience of the network has proves invaluable, while health measures have more or less shut down our public and economic lives. “One of today’s most significant challenges is maintaining the flow of goods that cross our borders”, says Fischer. “Indeed, the more stringent border checks, traffic jams causing bottlenecks stretching back for miles and stricter quarantine regulations mean that this cannot be guaranteed with transportation by truck alone. Without rail freight transportation, providing the economy, industry and the general public with food, hygiene products and other essential goods would be nigh on impossible.”

Timely words, especially for the supply chain serving the UK, where a regime of quarantine for overseas visitors, and returning UK nationals, was implemented on Monday (8 June). While there are exemptions for supply chain workers (principally drivers of road and rail traffic) free movement and establishing new trade links is, at best, highly restricted.

Building block for the future

Fischer says that his company, like many others involved in manufacturing and logistics, has a mix of shop floor and blue-collar staff, and while some are working from home, most are on the front line in workshops, control centres and locomotives. “Digitalisation has prepared the groundwork in recent years and is now crucial for maintaining our high levels of performance”, he says. “I urge you not to forget the significant role rail freight transportation and logistics companies are playing in safeguarding the supply of goods, even after the crisis. We can survive this crisis and rise from it even stronger, but we can only do so if we work together.”

Striking an optimistic note for the future, if we work together. Dr Heiko Fischer, chief executive of VTG. (image VTG)

Rail freight transportation, says the VTG policy paper, is a fundamental building block for the modern, greener and more efficient logistics of the future. The railway must, they argue, receive more political and regulatory support.

Comprehensively expanding the network

That does not appear to have fallen on deaf ears. In VTG’s homeland of Germany, the government has pledged levels of support – albeit channelled though the national carrier – that rival the investment programme in the UK. “Comprehensively expanding the network, the European freight corridors and hubs is absolutely vital”, proposes their briefing.

Wagon load opportunities should not be overlooked, argues the chief executive of wagon manufacturer VTG. Maybe not all wagon loads should be of hot coiled steel, though. (Image VTG)

Yet, for a company that profits from producing block train rolling stock, they advocate support for smaller-scale enterprise. “We also need permanently low route prices and, if possible, single wagons should be completely exempt”, they say.

Game changed forever

Until a few months ago, advocating an enterprise approach may have seemed out of the question in the UK. However, with the game changed, possibly for ever, wagon load freight may be back on the agenda. Largely abandoned since the 1980s, at least on the Dover side of the English Channel, it is the environmental imperative that is now shaping opinion, at least as much as the commercial considerations.

“Only by doing this can more freight be transported by rail in the future, making a transport turnaround possible”, says Fischer, advocating a much more equitable approach for the future. “We need fair competitive conditions, not only between modes of transport, but also within them.”

Much more holistic approach

Whether different interest within industries nationally can be reconciled, let alone competing interests Europe-wide, remains to be seen.

A modern, mixed traffic approach may yet yield additional business for rail freight (image Network Rail)

Fischer’s vision for a much more holistic approach to the industry may not strike a chord with free-marketeers, but an element of planned economic development, with rail freight playing a unifying role, may be the price of recovery. That seems a logical approach that perhaps should have been realised, without the need for a pandemic to focus the attention of industry and governments.

Author: Simon Walton

Simon Walton is RailFreight's UK correspondent.

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