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Rail Transport: Long Distance Rail

TagsLong DistancePassengerRail📘
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Business Models

One of the most important issues with today’s railway network are gaps in its electrification. The majority of all railway lines - especially long-distance routes - are electrified already. In Germany, 61% of the railway network are electrified with the EU-average being 54%. If only long-distance passenger as well as goods transportation are considered, the situation would look significantly better: 97.5% of long distance passenger journeys and 89.3% of goods transportation run on fully electrified tracks. In consequence, the focus of further electrification should be placed on short distance passenger transport. On these routes without overhead wires, Diesel-powered trains must be employed which counteracts the climate-friendly characteristics of railway transportation. Thus, new business models are needed in order to either close the electrification gaps or to develop hybrid-trains that can bridge the gaps [1].

In an attempt to promote railway transportation and make better use of its benefits, the European Union declared this year as the European Year of Rail 2021. The Council of the European Union plans to create a Single European Railway Area to open and restructure the market, increase competitiveness and improve efficiency, safety and the underlying infrastructure across the confederation of states. This entails technical harmonisation as well as joining forces to develop solutions for cross-border connections [2].

This issue is particularly pressing as the global demand for transport grows continuously and is expected to more than double by 2050. This development goes hand in hand with a greater energy demand as well as increased emissions and atmospheric pollutants. The expansion and development of a global railway system is needed to unify this growing demand with the realization of global climate goals [3]. Hence, numerous institutions such as the German Aerospace Center (DLR) are conducting research to find out how railway usage can be increased and how route usage can be optimized while maintaining safety and passenger comfort. According to the DLR, automation as well as multilateral communication systems for railway participants including intersecting traffic will be indispensable to reach these goals. They are therefore working on communication and navigation systems that allow for the communication between train operators and intersecting traffic without relying on radio systems that are known to disturb each other [4].

Another means to combine the increasing demand for transportation and climate action are high-speed trains as an alternative to short-distance flights [5]. Especially China has pushed the development of a national high-speed rail network and today, two thirds of the entire global high-speed rails are found in China and they are far from being satisfied with that: the Chinese government plans to double the size of its high-speed rail network within the next 15 years [6]. There are various examples for business models from companies all over the world which proves the potential and benefits of an expanded high-speed railway network. For instance, two Chinese and Japanese companies have presented the “Aerotrain” which is supposed to reach a maximum speed of 500 km/h and is planned to start operating in 2025 [5]. There are even plans to develop hybrid vehicles merging trains and airplanes: the “Link & Fly” system from the French startup Akka was first presented in 2019. It comprises a hyperloop train that drives to an airport where it is connected to an airplane to then fly to the final destination. The pods that are supposed to be powered with photovoltaic and hydrogen have a planned capacity of 162 passengers and 14 cargo containers and a planned reach of 2,200 kilometres. However, the COVID-19 pandemic has brought the development to a halt. Furthermore, the required infrastructural adaptations at airports are widely considered too complex and regulatory approvals are yet to be given [5] [7].

Furthermore, there is progress considering alternative power-trains for railway transportation such as the employment of fuel-cell based hydrogen trains. In Germany, the first hydrogen train “Coradia iLint” was inaugurated in 2018. It can cover distances of up to 1,000 kilometres and reaches high speeds of up to 140km/h. Fuel cell powered trains do not require overhead lines, as was explained in the section about fuel cell motors. The braking energy is also traced back into the system to increase energy efficiency. Hydrogen trains are very environmentally-friendly, especially if the water is created using renewable energies only [1] [5] [8] [9].

Another solution for bridging electrification gaps is the employment of battery-electric trains. Those trains can use one of two power sources: overhead lines or batteries. On trajectories with overhead wires, they are used to power the train and charge the batteries which can drive the train on routes that are not yet electrified. They have a significantly shorter reach than fuel cell trains but are capable to bridge electrification gaps of up to 80 kilometres [1] [9].

Start-ups could also try to overcome the problems Europe is facing with time-worn trains and tracks. As awareness grows for the opportunities stemming from systematic data analysis, information and communication technology companies should focus on the development of intelligent trains to tap the advantages in repair and maintenance. Software could be used for locomotives to show automatically when they need repair or maintenance and where the issue is located. Mobile teams could then be made available at the next station to take care of the problem immediately [10].

Next to the importance of making railway transport faster and even greener, it has to become more attractive - especially for passengers. Today, travelers demand a consumption experience rather than merely being transported to a specific place. Therefore, various start-ups across the world have focused on the development of attractive on-board entertainment and communication services. The main goal of these so-called infotainment systems are the enhancement of passenger-operator communication, providing real-time journey information as well as offering attractive multimedia platforms - preferably all independent from internet connectivity [11].

Political Topics / Constraints

As stated above, the modernization of the European and global railway networks embodies a number of advantages and opportunities. However, there is still a long way ahead.

In many western countries, cars have been prioritized over rail transportation for decades [12] [13]. As a consequence, the German railway network has shrunk by around 14% between 1994 and 2020. This corresponds to 6,200 kilometres of rails that have been shut down despite the ever growing traffic: In the same period, passenger traffic increased by 50% while goods transportation grew by 90% [13].

Another issue is the dissimilarity of national railway systems which poses critical problems for cross-national routes: different track widths as well as varying security, braking, and energy systems are only the most pressing issues. Moreover, different countries set different priorities for their railway networks. In France, most major cities are well connected to Paris via high-speed rails but not to each other. In the Netherlands and Belgium, a high frequency is considered more important than high speed and in the Czech Republic, the focus was put on a dense rail network to enhance public transport [12]. This means that a train starting in Portugal cannot simply drive all the way across Europe to Croatia or beyond as the train wheels are not compatible with foreign tracks [14]. This issue is worsened by the fact that critical cross-border infrastructure which has been destroyed in World War II has never been rebuilt. The Heinrich Böll foundation states that 149 out of 365 cross-border rail connections are still non-operational due to disputes over which country should be responsible for the repairs. This affects one third of the EU’s population as 40% of the EU territory are border regions [12].

Therefore, there is a need to develop common standards, especially at border crossings, in order to facilitate cross-national rail transportation. This need has been recognized by the Council of the European Union which started a project called “Single European Railway Area” aiming at developing a competitive, harmonized EU-wide railway network. Within the scope of this project, high-speed railways as well as passenger numbers are to be doubled by 2030 [2]. Plus, half of today’s medium distance intercity journeys are to be shifted from the road to rail and waterborne transportation. However, one of the primary issues of the European Union is also observable in this regard: while the EU has already ratified numerous projects to revolutionize the mobility sector, they often face reluctance of individual member states to enforce the rules as well as the challenge to align those projects between 27 countries [12].

Generally speaking, railway operators, governments, companies and other relevant stakeholders must find a way to create more unity concerning their requirements, technological developments, goals, and regulations. The conflicting stands on future developments represented by politicians, workers’ unions and companies have brought the progress of European railway projects to a halt [15].

In addition, the industry faces a significant lack of investors. Infrastructural deficiencies such as the lack of capacities, time-worn tracks, and a lack of available vehicles have built up over decades and improving them requires high investment volumes while being characterized by low profitability [14] [16]. This combination makes public transportation projects highly unattractive for (private) investors [14]. However, not only the lack of private investors is complicating the way forward: so far, the German government is clearly prioritizing the automotive versus the railway industry. While various federal ministries provided funding of around €969 Million for the automotive industry between 2007 and 2017, the German railway industry only received €16.4 Million in the same time-frame [7]. In order to underline the relevance of railway transportation for the battle against climate change as well as to solve some of the various issues the railway industry faces, public funding must be shifted towards railway projects and bureaucratic processes to execute infrastructural projects must be sped up [16].

This long-lasting prioritization of cars over railway transportation also becomes palpable when looking at regulations and taxes: governments charge the highest power tax in Europe for railway operators with Austria leading the list, directly followed by Germany. Furthermore, rail operators must carry the costs of an eco-tax, an EEG-levy, rail toll and of 100% of CO2-certificates purchased in the emission trade. Other modes of transport barely contribute to the energy transformation although they are way more harmful for the environment than rail transportation. Air and waterborne transport have been freed entirely from mineral oil and eco taxes and airline operators only pay for 15% of the CO2-certificates they need. The governments do not charge tolls for long-distance buses and rail operators are forced to pay higher reimbursements for delayed or cancelled trains [17] [18]. In order to make railways more competitive and attractive for consumers, these regulations must be adapted to underline the significant environmental benefits trains can bring about.

Yet another important aspect concerning the enhancement of rail transportation is cybersecurity. In the future, all modes of transport - basically every aspect of our everyday lives - will be increasingly connected. While this connectivity brings about various advantages, it also increases the threat of cyber attacks which can include attacks on critical infrastructure systems, attacks on and abuse of sensitive company or consumer data as well as ransom [19]. The EU and other global players must develop a common framework to protect against and react to potential cyber attacks.

Consumer Perspective

German consumers are often unsatisfied with their travel experience by train and thus travel ten times more by car than by railway. Looking at historic passenger numbers shows that despite the significant increase of journeys, the share of passengers on rails has remained fairly stable at roughly 8% in the past decades [12]. Trains operated by Deutsche Bahn (DB) are often delayed or even cancelled, have technical problems and quality deficiencies, and expensive fares [15], [16]. As customers expect regular improvements and innovation as well as a convenient and progressive service offer, they often refrain from using trains as they cannot fulfill these standards [16]. Looking at an international comparison shows that Germany invests far less into rail transport - roughly €88 per person in 2019 -  than other European countries like Switzerland (€440 per person) or Luxemburg (€567 per person) [13]. And experts even expect the situation to be worsened by the COVID19-pandemic. The Heinrich Böll Foundation stated that the significant drop in passenger numbers since April 2020 will have a serious impact on the financing of public transportation in the medium run [12]. Moreover, different corners of the country are not equally well connected. Thus, travelers have to change trains multiple times in one journey which increases the risk of missing connecting trains. This also holds true for neighboring countries like France [12]. The access to railway and public transport in general has more far-reaching consequences than one might expect: it largely defines a person’s access to jobs, education, and health-care and therefore our quality of life [20].

Furthermore, the limited interoperability between international railway systems which was elaborated on earlier, makes trains an unattractive means of transport for vacation journeys. The fact that train fares are often significantly more expensive than flights or car trips also does its part. Between 2010 and 2020, prices for train tickets have increased by +16%. Trips by car have also become more expensive by +8% while prices for flights have decreased slightly [17], [18] which does not benefit the competitiveness of rail as a mode of transport. The rise of long-distance buses and ride-sharing services has increased the pressure on railway operators [15]. In addition, finding international fares and purchasing tickets for international trips is often difficult and highly intransparent [12], [16].

Another important aspect is the consumers’ growing demand for consumption experiences rather than mere consumption which also holds true for travelling. Some providers in France and the United Kingdom are starting to address this request by offering on-board infotainment systems and multimedia platforms to entertain passengers during their journey and to enable them to communicate with the operator, get information on their trajectory and request assistance. Most of these new services are independent from internet connectivity which is particularly important in countries like Germany where reception deserts are still a problem [11].

All in all, today’s railway and public transportation system is characterised by its lack of attractiveness.

Many citizens associate it with poor punctuality, high costs and a significant expenditure of time [21].

This problem must not be underestimated and must be addressed in the near future in order to draw passengers from air to railway transportation.

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Sources

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