BTJ 3/2008 - Baltic Transport Journal

Hinterland
Private carriers on fight for rail cargo in Poland
State monopoly and its aftermath
After several years of dynamic growth, the cargo shipping market
in Poland has apparently slowed down.
However, the structure of the
market share has changed
significantly and private carriers
are gaining momentum.
In 2006 the railway cargo
shipping market in Poland
grew by 7% compared to 2005. According to
forecasts for the following year, the market
should have grown by 2.5-3%; however, in
2007 shipping operations, i.e., the number of
started cargo trains, grew by only 0.2% , and
the total volume of carried cargo by 1%.
Analysts from the TOR Economic Advisors
Team stress that the cause of the downturn
lies in the decreasing volume of coal transported
by rail from the mines in Upper Silesia in
the south of Poland to the Baltic Sea ports in
Gdańsk, Gdynia and Szczecin-Świnoujście.
“Polish railways depend on coal shipping. If
they do not find other cargos in 2008 the volumes
will fall. This trend may not only hit the state carrier,
PKP Cargo, but also private companies,” says
Marcin Kamola from TOR.
However, according to another analyst
Łukasz Malinowski, “PKP Cargo should be
blamed for its overall poor results as the mar-
60 | Baltic Transport Journal | 3/2008
ket has not grown but private carriers have
taken over the cargo it used to transport in
previous years.” Malinowski assures that in
spite of the general standstill on the market,
a constant and very dynamic growth of
shipping may be observed among private
operators.
Polish tracks users
PKP Cargo is responsible not only for
cargo shipping but it is also the owner of
a definite majority of state locomotives.
There is one more state carrier in Poland,
PKP LHS. It operates only one line with
a gauge of 1,520 mm, i.e., compatible with
the size used in the former USSR countries.
The line, at present used more and more for
container transport, is almost 400 km long
in Poland and ends in Sławków where a huge
dry container terminal is being developed.
According to Matthias Raith, Member
of the Board of CTL Logistics SA, the liberalisation
obstacles are not at all a Polish
matter. „Rail market in Europe is just formally
liberalized, while we are still state
monopolies operating in the democratic environment”,
Raith commented on the recent RailPort
2008 Conference in Warsaw, stressing an example
of the German government’s open support for
Deutsche Bahn’s leading function. Another problem
pointed on the agenda was a matter of still
very low share of the modern goods transported
by rail. Containerised traffic in Poland took only
5,3% of the overall railway shipment volumes in
2007, as it was brought on the conference by Zbigniew
Zarychta, Member of the Board of PKP PLK.
This particularily represents the nowadays meaning
of private carriers to the market, as they are
mostly active in the intermodal sector.
There are 15 major private companies in this
sector in Poland with the top five players holding
almost 40% of the whole market.
Success does not come easily
At the beginning of 2008 the decision of the
Polish Office of Competition and Consumer Protection
became valid. It imposed a penalty of PLN
51m (EUR 14.3m) on PKP Cargo for its monopolistic
practices. The problem started several years
ago when private business started to enter the market
and PKP Cargo executed long-term contracts
which, according to the Office, were made to prevent
the creation of competition. The second proceedings
are pending, these may result in another
fine of PLN 10m (EUR 2.8m). This time PKP Cargo
is being accused of breaking the competition law by
giving privileges to one operator only.
The list of complaints from private carriers is
long. PKP Cargo is said to receive preferential rates
for using tracks administered by its group partner,
also state-owned PKP PLK. It is also suspected of
being prioritized in creating timetables.
Private companies hope that the complete
liberalization of the market introduced by the EU
will lift such barriers and that soon most cargos on
Polish tracks will find their way to wagons.
PKP Cargo under its new management is also announcing
a new business attitude. “We shall be open
to the economic environment, and we shall be more
competitive as far as our products and their quality
are concerned. We shall not be continuing, however,
the devastating price war with our competitors as it
was done before,” says new President Wojciech Balczun.
“I wish to implement changes as soon as possible
in the company’s organization in order to make
the company more market-oriented. If we seriously
contemplate entering the stock exchange some time
in 2010, PKP Cargo must change,” he declares.
Paweł Rydzyński