INTERMODAL

November 2011

Another level of service

The major European rail wagon provider AAE believes that block-train service providers could do more to help themselves when working out how to better compete against road haulage, as Matthew Beddow reports
lthough rail transport in the European Union (EU) has coped well with exceptional trade growth since China burst onto the international trading market in 2002, its market share against road haulage has changed little. Indeed, rail transport has increased at an average annual rate of 7% in terms of TEU-km, which is exactly in line cargo growth. Rails share of hinterland container traffic in Germany only rose slightly last year, from up 34% to 36.5%, but fell in 2009. In the Benelux it stagnated between 10% and 12% last year, and in Le Havre it fell to about 6%. The UKs share remained at around 30%. There are many reasons for this, including failure to liberalise the EUs railway infrastructure properly. According to the European Commission (EC), this has left the playing field uneven for new market entrants. The driving force behind the liberalisation is the need to cut road traffic congestion and pollution. The EU is counting on a shift from road to rail in order to reach its targeted 20% reduction in CO2 emissions by 2020. Be that as it may, the fact is that rail still struggles to compete with road on both service levels and price. The EC is currently trying to push through a recast of its first three directives on rail liberalisation to help resolve the situation, but it claims that railway service providers also need to look more closely at their internal costs. One of these costs could well be the price paid for the rental of railway wagons. Every day some 2,000 intermodal trains ply their way between 400 terminals across Europe, so wagon optimisation is hugely important.

The twin wagon designed and produced by AAE

Many people underestimate the cost implications of choosing the right wagons. If more time was spent optimising this, much could be saved
Ole Nygaard
Ole Nygaard, sales director of Switzerlandbased Ahaus Alsttter Eisenbahn (AAE), which rents around 30,000 wagons to over 120 customers in Europe and Russia, 18,000 of which are used in intermodal transport, remarked: Many people underestimate the cost implications of choosing the right wagons. If more time was spent optimising this, much could be saved. AAE naturally spends a lot of time analysing the market in order to identify the right rolling stock development patterns. Nygaard

explained: In the maritime sector we are seeing a clear trend emerging towards 40ft high cube containers, for example. It is fair to assume that, in the next few years, these boxes will become the standard. On the other hand, for 20ft containers, current standards are unlikely to change in terms of dimensions, but weights are expected to increase. For the moment, the proportion of 20ft to 40ft containers remains split 50/50 in terms of numbers of boxes [not TEU]. Taller boxes may pose clearance gauge problems for the railways, but they have virtually no direct impact on our wagons. In practice most of Europes main corridors are already designed to cater for this height. Hence, little change is to be expected. However, we can see that the trend will affect hinterland shuttle train compositions in other ways, and it will be important to identify optimal solutions for them. For instance, due to the changing mix of 20ft and 40ft containers it more regularly

EXECUTIVE SUMMARY
Railway companies claim that infrastructure costs are still too high for them to compete more effectively against road haulage AAE argues that there is still room for other costs to be cut through better optimisation of wagon lengths AAE claims that the growing use of 40ft containers means that more 60ft wagons should replace 80ft wagons

happens that only one 40ft container and one 20ft container can be loaded onto an 80ft wagon, leaving the last 20ft of the wagon as dead freight, he added. However, many rail service providers still opt to work shuttles exclusively made up of 80ft wagons for their port hinterland traffic. The rationale is hard to understand, even though the uniformity of train compositions may make life much easier. Asked to elaborate on this situation, Andrew Foxcroft, lead container fleet analyst of Drewry Maritime Research, and the former editor of CIs World Container Census, remarked: According to our records, the world fleet of standard 20ft containers (4,264,000TEU) at the end of 2000 represented 54% of the total TEU in circulation, whereas the split at the end of 2010 fell to 47%. That may not seem much of a change, but the number of ordinary 20ft maritime TEU (ie excluding specials) increased by approximately 83%, whereas the number of 40ft TEU grew by a much greater 112%. And within the 40ft sector, 8ft 6in boxes grew by just 6.2%, to 5,492,000TEU, whereas the number of 9ft 6in TEU increased by 417.1%, to 11,220,000TEU. The picture is more pronounced for special containers used in the intra-European market. The trend is clearly not new, but its effect on the rail sector has been softened by the greater competiveness of rail transport over road haulage for heavy 20ft containers, and 20ft boxes containing hazardous cargo, thereby concealing the full extent of the change. The message is still clear, however rail
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INTERMODAL
November 2011
service providers need to spend more time analysing technical aspects of their business. AAE claims that few of them really know how many containers are carried on any given shuttle or what the weights and dimensions of these boxes are, so often opt for the standard solution of renting the good old 80ft wagon. AAE recently conducted an in-depth practical test with one of the larger shipping companies, taking, as an example, rail traffic between Rotterdam and its European hinterland, to collect data on the weights and dimensions of the boxes loaded. Nygaard explained: A conventional container block-train between Rotterdam and northern Italy typically has a length of 600m and a carrying capacity of 92TEU. A shuttle train of this type is made up of 23 x 80ft wagons with a total weight of 564 tonnes. However, taking the average weight and dimensions of the containers carried, it is easy to see that, for the same loading capacity of 92TEU, the most efficient solution would be a combination of 12 x 60ft and 14 x 80ft wagons. Train length would then be 609m, a negligible difference from the 607m of the standard 80ft wagon train. This is very interesting since most people would expect a train with 60ft wagons to be longer. Not so, although the net weight per train is higher, at 632 tonnes instead of 564 tonnes. With mixed compositions of this kind, the 60ft wagons can be used to carry the 20ft containers (generally heavier) and the 80ft wagons can be used for the bigger 40ft boxes. So, how does the optimisation affect wagon hire costs? Nygaard opined: For the combination of 20ft and 40ft containers taken as a basis in our calculations, and assuming the train is carrying a full load, on the basis of 60ft and 80ft wagon rental rates, we believe that operators can save some 10% on their rental charges, which can add up to a respectable fivefigure Euro sum at the end of the year. Moreover, additional savings can be made through reduced wagon maintenance. A conventional train comprising solely 80ft wagons has 138 axles, whereas the optimised shuttle train with its mixed composition of 60ft and 80ft wagons has just 132. This results in a further saving of around 5% in the cost of operations, including wheel set maintenance, brake block renewal and the like. (See table). So does that mean that choosing to work maritime shuttles exclusively with 80ft wagons is a poor decision? While Nygaard admits that
Table 1:

Ole Nygaard: Many people underestimate the cost implications of choosing the right wagons

this may be an obvious conclusion, he hastened to add that each case must be examined on its own merits. He added: However, it is generally true to say that there are many shuttle trains of sub-optimal composition in operation today. Operators who work several maritime container shuttles per week could make substantial savings in their rolling stock costs if they followed our advice. AAE has since put its findings to a number of larger customers whose feedback has been consistently positive. Nygaard insisted: It is always important to start with an analysis of the types of shipment handled by the particular operator and then discuss the options. We have a large and flexible fleet of wagons with lengths ranging from 60ft to 104ft, so have no problems in meeting our clients needs. For AAE, one wagon type can easily be replaced by another if this helps customers optimise their costs. Strangely, the writer had some difficulty getting an independent opinion on the need to use more 60ft wagons, although Freightliner in the UK says it is heading in this direction. Volker Grapengiesser, an independent consulting engineer based in Germany, also said: The selection of wagons has a very important impact of the profitability of container trains, but before investigating if 80ft or 60ft wagons are better, you need to get rid of old wagons. In reality you can only get what is available, which means too many 60ft wagons are being provided, some of which were built when containers were not so heavy. As wagons have a technical life of more than 30 years the situation will only change slowly.

Ideally, a train should have many 80ft wagons, a few 90ft wagons for 45ft containers and swap bodies, a few 60ft containers for 30ft and 20ft containers with low average weight, special wagons for semi trailers, if any, and a few 104ft wagons if there is a large number of swap bodies. The best mix always requires a case-by-case investigation which also has to take into consideration axle weight restrictions. AAE maintains that it can produce an analysis with equally attractive findings for intra-European traffic most suited to continental trailers and swap bodies. Nygaard elaborated: Unlike inward and outward maritime container movements, there can be no one-size-fits-all solution for this type of traffic. The answer can only lie in greater flexibility. AAE has, therefore, focused on a multifunction wagon concept as a means of catering for the problems posed by the wide variety of traffic flows and load unit combinations in the sector. It has designed and produced a twin wagon which can be used for all types of intermodal transport units. With just a few adjustments this can be transformed from a pocket wagon with a width of 2,700mm for mega-trailers into a container wagon for swap bodies and maritime containers. The main novelty with this design is its sliding loading beam, a device that can be singlehandedly moved into position and secured over the pocket. In Nygaards words, using the loading beam, wagons can be quickly and easily transformed from pocket cars to container wagons.

The selection of wagons has a very important impact of the profitability of container trains, but before investigating if 80ft or 60ft wagons are better, you need to get rid of old wagons
Volker Grapengiesser
The twin wagon offers the extra flexibility that continental operators need. A shuttle train with a fixed composition of such wagons can be adapted to cater to daily changing demands. Terminal managers simply have to decide on the number and types of wagons to be included in the original train compositions, and terminal staff can then convert the wagons to cater to specific needs. This enables operators to have train compositions tailored to their daily requirements with a minimum of handling, and in a fraction of the time it would take to shunt a train, Nygaard enthused. Three years ago AAE ordered and commissioned 1,000 of these wagons, thus filling a previously existing market gap. Nygaard elaborated: Market response has been so positive that we will shortly be ordering a further series to be available for rental from next year. CI
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Example of cost benefit of wagon optimisation

80ft wagons 60ft wagons Capacity TEU Train length Train weight Number of axles Rental saving per train/ per year Maintenance cost saving per train / per year

Train consist

Standard shuttle Mixed-consist shuttle

Source: AAE

23 14

0 12

92 92

607.2m 609.5m

563.5T 632.0T

138 132 - 9.3% - 4.3%

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