Logistics
300 km of lorries removed from roads
Interview with Frank Schuhholz, Managing Director at ERS Railways B.V.
Intermodal is high on the agenda in Europe, no doubt about that. But
there’s a difference between just talking about it and establishing a successful real-time service which takes thousands of trucks off congested
roads. We talk with Frank Schuhholz, the person in charge of ERS Railways, about concepts facing market acceptance.
U The Swarzędz-Rotterdam intermodal link
is in direct competition to feeders, serving
the Baltic Sea. How will the rail vs. sea
playing field be affected by the stricter sulphur regulations impending in 2015?
Let me start by saying that the product we have
established right now is to compete with roadbased supply chains on the long haul between
the UK/Benelux markets and Poland (and viceversa), and not because of volumes which we
could catch from short sea. But, to answer your
question, please allow me to choose the following context: definitely there will be a rise in
costs of shipping goods by vessels into the Baltic
due to stricter sulphur emission regulations. Let
us also not forget about the Kiel Canal which
has a worn-out infrastructure and needs urgent
renovation. However, the German government
says that only in 2018-2020 can we talk about
reparation works being concluded. These two
items will definitely create challenges for maritime-based supply chains. Challenges which
could only be solved to a small degree by an intermodal concept which we have established in
the meantime. Again, our goal is to target roadbased supply chains by offering a transit time
between Rotterdam and Poland of around 22
hours when carrying a 600-metre long train as
the first key element. The second key element
(equally important to the transit time) has been
the ramping up of number of departures which
first took place in June 2013 when we extended
the schedule from three to five departures each
week and direction, and again in September
from five to six. Needless to say, we need a mix
of so-called pocket wagons for mega trailers
and container platforms for each wagon set
in use on this route. We are currently demonstrating that we, as a company as well as a whole
industry, have opportunities to capture more
volumes for rail. This being said, we must be
aware that we can only succeed if we meet the
expectations of today’s supply chain executives
who are continuously being challenged by their
top management to implement robust, while
sustainable, purchasing and distribution strategies. Let’s think a step further and take a regular
rail route going all the way from Rotterdam,
46 | Baltic Transport Journal | 4/2013
via Poland and Belarus, to Moscow in Russia
within six to seven days. It could be a success
story. In this case the future ECAs will not be
of relevance as they do not hamper the speed
of vessels. What will matter are the customs
procedures at the respective borders which will
move into focus keeping the customs red tape
to a minimum. Transit time is a crucial success
factor for rail transport when it comes to congested infrastructure within the chosen corridor. There are data from Poland’s Office of Rail
Transportation that the average time of delay
for cargo trains in Poland amounts to about six
hours. We proved in 2012 that we could take
a freight train from Rotterdam to the eastern
border of Poland (Małaszewicze) in 30 hours,
which represents again an average speed of 50
km/h which gives us competitive advantages
compared to road-based transport solutions.
U What do you think about doing intermodal business in Poland, taking into
account all the problems of the Polish
rail sector, e.g. high track access rates,
subpar infrastructure, delays?
Honestly? Despite the challenges, I remain
positive about it. This market segment is relatively young and has really promising potential. It is like a fast-growing baby, still some 10
or 15 years behind its German cousin (when
it comes to size) but the basic conditions are
there for catching up. Obviously, certain rail
corridors going via Poland (e.g. to the Silesian
area) need more refurbishing work regarding
infrastructure development. Axle weights per
wagon as well as train lengths are definitely issues hampering our development, the same
applies to the lack of electrified tracks as well
as the set up of high performing intermodal
terminals. Furthermore, we need to get a 44 tn
regulation for 45’ containers in place (which
is common practice, e.g. in Germany) which
allows shippers to load four tonnes more payload into the same container when it is transported on the main haul by train and delivered
the “last mile” by truck. The state-owned rail
infrastructure administration, as well as the
ministry of transport and infrastructure, has
to be aware of what they can do to make railbased intermodal transport solutions more
attractive in Poland. We, as a private and
commercial enterprise, will stick to our business and do the best we can to earn money but
there are limits when it comes to the underlying conditions upon which we are dependent.
U Talking about business, how do you
perceive the first year of the SwarzędzRotterdam rail connection?
It was a long and stony road to get to the starting line but now we are seeing the first positive
results, e.g. in terms of utilisation as well as
market acceptance. During the first 12 months
we carried 15,000 TEU. If we count that one
TEU equals one truck and put them into one
line, then we have taken off a queue being 300
kilometres long from Dutch, German and
Polish roads. In other words, companies were
able to see and experience that intermodal is
not some mumbo jumbo. Nonetheless, road
hauliers continue to be in cut-throat competition. Sometimes when you hear about prices
they offer, you can think it is nothing but pure
madness. There is much talk about the crisis
and how it is sweeping trucking companies
away; yet, in reality one company goes off the
market just to be replaced by four new ones. In
order to compete, one must shift one’s focus.
Road transport won’t cease to exist, and if you
are running a railway company you must offer
customer-driven solutions meaning that they
have to fit into the setup of the customer without major organisational changes. In other
Logistics
we managed to increase the number of
departures and to get more and more Polish as well as Western European customers on board our trains who’d never tried
intermodal before. What we see right now
rail will be higher than loading them onto
a ship. Trains just don’t have the capacity
compared to the vessels running between
Asia and Europe. However, trains have
a big advantage when it comes to transit
is that a small but steadily growing number of transport companies are starting
to order mega trailers which can be lifted
on and off the pocket wagons. I must say
that this is the best sign for us that the
crisis did not affect our approach to the
Polish intermodal market, quite actually
the opposite happened – it increased our
opportunities. Let me just give you one
comparison, when it comes to the socalled huckepack trailers – for Western
European transport markets statistics indicate that 3-5% of all trailers are capable
of being transported intermodal. Based on
what I have learned from the Polish market, we have about 130,000 trailers which
go on cross-border traffic – so international routes. My guess is that currently
we do not have more than 500 trailers
in Poland which can be taken by a reach
stacker on a pocket wagon. I’ll let you do
the math in order to understand what I
mean when it comes to the potential of the
Polish intermodal market.
time compared to super slow steaming vessels. For example, if a company in Europe
wants its orders (representing 1,200 tonnes
of cargo per week) from western China
to be delivered as quickly as possible, but
does not want to pay high airfreight bills,
then the best choice could be to take it on a
train going westbound, rather than carrying them first from the manufacturer’s location somewhere 2,000 km in the Chinese
hinterland to the next major Chinese port
and afterwards waiting for a vessel to arrive
in one of the North or Baltic Sea ports. You
can easily have a time difference up to even
30 and more days, comparing 16-17 days
needed to get the cargo by train from e.g.
Chongqing to Duisburg or Rotterdam.
I admit that we need to bring the containers back to China one way or another but
this would go too far right now exploring
these possibilities.
So, yes, the market potential for longdistance rail carriages over the so-called
Eurasian Land Bridge is there and certain
services are already running. It is up to
the shippers and the forwarders to decide
which service would be appropriate to
choose. We also need to keep in mind that
supply chain elements like customs at border crossings, cross docking containers between broad and normal gauge systems as
well as terminals have to be evaluated and
tested first before they can be implemented
in today’s multinational supply strategies.
Photos: ERS Railways
words, you need to convince decision makers
that rail-based intermodal transport can be efficient and competitive while remaining sustainable. What’s most important, rail and road
services have to be combined in an intelligent
way. This being said we are thinking about
taking trailers and containers all the way from
the Port of Rotterdam area to our partner
terminal CLIP in Swarzędz near Poznań by
rail, and then distributing them via more ecofriendly trucks, running, e.g. on CNG, LPG
or LNG. This could be the future of a mature
intermodal sector in Poland which has the potential to overtake its German cousin in certain areas faster. As I see it, still some 95% of
companies look at the price when choosing a
transport service provider, but there is a growing number of decision makers who also take
the ecological side of the whole affair into account. We, at ERS Railways, understand the
pressure which is preventing companies from
moving away from long haul road transport
but we offer them a possibility to start getting
acquainted with the business and then enable
them to grow their volumes transported by
rail. We also do observe that certain industries,
e.g. Fast-Moving Consumer Goods companies, being already active in intermodal supply
chains are starting to compete with each other
based on who will have the most eco-efficient
supply chain management. Top management
of those companies decided to go that route
and now companies try to differentiate themselves via their carbon footprint.
U Did the on-going crisis change anything
in your plans regarding the PolandNetherlands link?
No, definitely not. And this is also part of
our success story that, despite the crisis,
U What do you think about a really longdistance rail connection, stretching
from China to Western Europe?
More and more production sites are being located in the western part of China,
closer to Europe, and for sure sooner or
later such services will be up and running on a regular, frequent basis. Still, we
need to bear in mind that costs of carrying the same number of 20-foot boxes by
Przemysław Myszka
4/2013 | Baltic Transport Journal | 47