European Railroad Discussion > Europe: Boston Consulting on Railway Performance

Helsingin Sanomat (English:"the Paper of Helsinki"), a paper with several million daily readers, wrote this week about the Boston Consulting Group study on the European railroads effectiveness.

Looks like part of the article is to be seen here:
https://www.bcgperspectives.com/content/articles/transportation_travel_tourism_cost_efficiency_asset_optimization_2012_european_railway_performance_index/

The basic message according to both articles is that (not at all surprisingly) the most effective railway systems exist in: Switzerland, France, Germany, Sweden, and Austria. These are all European Union open access countries (except Switzerland not being part of the union, but structures similar), allowing anyone to traffic on their rails. So the volumes and unit costs have developed for years to positive direction. Though there is still a lot of work to be done in structuring and remodeling plus building more routes to cope with increasing demand, the results of open access show here!

Also four out of five, Switzerland, France, Germany and Sweden, get better return for public money than others. The heavy investment rate of Austria might show here dropping it away from the other crowd.

Ex. Soviet empire countries are not surprisingly in the poorest condition, what comes to railroading.

According to Helsingin Sanomat in safety Switzerland is very good: 0,2 accidents per million train kilometers, and Britain top with 0,1. The last in the crowd is Lithuania, where there are an incredible number of _5_ accidents per million train kilometers!

Of course the amount invested per country and capita shows here too: in Sweden this is 300 euros per capita, where in the poorer Finland the sum is only 8 euros, an astounding difference of investment rate. Modern structures perform better than decades or even 100 - 200 years old.

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In the picture is a view from Luzern station, Switzerland. Many of the trains seen are Stadler Rail manufactured GTW units.

McKey Wrote:
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>
> Ex. Soviet empire countries are not surprisingly
> in the poorest condition, what comes to
> railroading.
>

The effects of the 1990s are still lingering, and need lot of investment to get rid of. Nobody other than Russia has the necessary cash, but the RZD, like all other parts of Russian society, likes shiny, new things that it can show off. Good track geometry, sub-ballast, and effective rolling stock maintenance programs unfortunately, by their nature, do not meet those conditions, and, in fact, become "black holes" for funds.

Unfortunately, Belarus and Ukraine, the only two other European former republics with significant rail systems (i.e. those that theoretically hold the most promise for return on investment), are not eligible for large amounts of EU funds due to one being run by a lunatic, and another being in a constant state of political chaos.

Soviet rail infrastructure, while not being as spiffy and neat as that in the West, was actually quiet good for what it was heared towards (basically 1950s US - heavy freight and heavy long-distance passenger traffic). But the upkeep collapsed along with the rest of the country after 1991.

Hmmm...looks like there is some confusing information: I remember reading that after WW2 in the Eastern side of Germany double tracks were changed to single track only leading to much lowered capacity of transportation, even if the need would had been for much greater.

This would suggest the Soviets did NOT either understand what building blocks the rail system consisted of and were very hungry on missing materials like rails OR the idea just was to press down the Germany, as a satellite. But maybe there is an expert here on trainorders on this subject, certainly you seem to know a lot.

But everything I ever read suggest that the Soviet Union never really had any idea of the true nature of the logistics, especially the one important factor: costs.

McKey Wrote:
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> Hmmm...looks like there is some confusing
> information: I remember reading that after WW2 in
> the Eastern side of Germany double tracks were
> changed to single track only leading to much
> lowered capacity of transportation, even if the
> need would had been for much greater.
>
> This would suggest the Soviets did NOT either
> understand what building blocks the rail system
> consisted of and were very hungry on missing
> materials like rails OR the idea just was to press
> down the Germany, as a satellite. But maybe there
> is an expert here on trainorders on this subject,
> certainly you seem to know a lot.

Two things - war reparations, and "revenge" of sorts. And after the behavior of the German forces in USSR during 1941-1943, can anyone REALLY blame this approach (despite it's short-sightedness)??

The US Marshall Plan did wonders for western Germany, but had the Nazis invaded North America, and burned American towns and villages while massacring American civilians, leaving aside for a second the matter of capacity, I seriously doubt there would have been anything even remotely resembling a Marshall Plan.


> But everything I ever read suggest that the Soviet
> Union never really had any idea of the true nature
> of the logistics, especially the one important
> factor: costs.

While costs were relatively symbolic in the Soviet economy, the matters of performance and results were definitely held up there.

In the 1980s, the SZD carried more freight volume than all the US Class 1's combined!

Didn't the Soviets pack up and ship a lot of Polish, East German, Czech, etc rails and ties back to the homeland?

Lackawanna484 Wrote:
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> Didn't the Soviets pack up and ship a lot of
> Polish, East German, Czech, etc rails and ties
> back to the homeland?


This was definitely the case with Germany (rail, ties, and locomotives - both steam, and the then-state-of-the-art electrics). Not sure about others.

Still, I would argue the costs are not just symbolic: it is the driving force for change to effectiveness. Forget about the costs, and everything winds up slowly to halt, or in an environment of competition, the one that can't calculate the costs will quickly loose.

This thing I know and has been hilarious to discuss in Europe: The Soviets in fact transported raw materials, semi finished goods and goods even across the continent from one plant to another because transportation was free! What a waste of valuable resources. Of course transporting goods without any sound reasoning from one point to another leads to immense volumes, even if the country's production output was in the end halting.

But, of course the Russia today can be happy about the Soviets "main land" building huge rail networks. This creates a great base for today's expansive policy, the growth last years has been quite a miracle, even with a constant lack of producing enough rolling stock. This production happens, just not fast enough for the needs.

Btw. do you know or can you find out, how many private companies today run on the rails of Russia? For addition, here is another picture of a tank train with 2Te116 double engine doubled. The picture was taken in Narva, Estonia before Russia managed to open enough harbor capacity to provide access to waterways itself. The train is U.S. size, the diesels quite modern AND the company is very private, contrary to many beliefs how things are run in Russia. The ONLY monopolized railroads (to governments) are currently in Biela Russia and Finland.



chs7-321 Wrote:
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> While costs were relatively symbolic in the Soviet
> economy, the matters of performance and results
> were definitely held up there.
>
> In the 1980s, the SZD carried more freight volume
> than all the US Class 1's combined.

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You can still find many of these at railroad museums. Regauging to 5' was not a problem back then!

chs7-321 Wrote:
-------------------------------------------------------
> Lackawanna484 Wrote:
> --------------------------------------------------
> -----
> > Didn't the Soviets pack up and ship a lot of
> > Polish, East German, Czech, etc rails and ties
> > back to the homeland?
>
>
> This was definitely the case with Germany (rail,
> ties, and locomotives - both steam, and the
> then-state-of-the-art electrics). Not sure about
> others.

Interesting discussion. I'm currently the editor of a volume of a periodical called Rail Transportation Business Management, which issues irregular themed volumes. This one takes a look at railway deregulation and privatization worldwide, and we have a paper covering Russia and the countries of the former Soviet Union. The trend to privatization has essentially stopped. There is much private rolling stock (freight wagons, anyway), but the price for haulage includes locomotives and a crew, as well as dispatchining and the permanent way. So there is no meaningful privatization. The state is still firmly in control.

As for the various remarks on costs, yes, if you don't know your own costs you're doomed to fail. In some Socialist countries the lack of understanding is profound. I hosted a visit to the U.S. by senior railroaders from Mozambique back in the 1990s. Their chief commercial officer asked me, partway through my presentation, "What is the difference between cost, price, and profit?"

Looks like there is a lot to do in the World! Looking from the positive side (I try at least) there is still work to be done.

Back to Russia, there are in fact a lot of private locomotives for a number of private companies. I don't know who owns the companies, state or investors, but they are indeed run as private. I think the funniest start up was called "Space.com" years ago. To me this company now looks to be hiring locomotives for operators mainly in Estonia. Nothing to do with space, although the 2Te116 units look so hideous that they could be straight from the Star Wars movies.

Back to the subject: http://ru.wikipedia.org/wiki/%D0%9A%D0%B0%D1%82%D0%B5%D0%B3%D0%BE%D1%80%D0%B8%D1%8F:%D0%96%D0%B5%D0%BB%D0%B5%D0%B7%D0%BD%D1%8B%D0%B5_%D0%B4%D0%BE%D1%80%D0%BE%D0%B3%D0%B8_%D0%A0%D0%BE%D1%81%D1%81%D0%B8%D0%B8

I'm afraid this document is totally out of date.

Here is some more of Transoil: http://transoil-spb.ru/en/about/

But still too little. Just browsing 4rail.net alone you will find about 30 - 40 their locomotives and the road numbers indicate several hundred might exist.

And this is just one company. Freight one (a start up of the RzD initially) is another interesting out of the bunch, to be privatized soon. I think the company was created to help building railway transportation capacity faster than the mother RzD alone could had done.

Those capable of reading properly Russian language, could you post here a list of companies, as I'm sure it exists on some web page?

Some more:

http://www.sci.de/fileadmin/user_upload/en/mcs/Laenderberichte/PDF/090427_Product_information_MC_Russia.pdf

Figures from 2007 (can't be so that Russians would be this bad on publishing...)
"OAO RZD currently holds approx. 10 000 diesel locomotives, most of which will have to be replaced in the next 10 years."

"As of December 2007, private railways owned 10 172 diesel locomotives."

>>As for the various remarks on costs, yes, if you don't know your own costs you're doomed to fail. In some Socialist countries the lack of understanding is profound. I hosted a visit to the U.S. by senior railroaders from Mozambique back in the 1990s. Their chief commercial officer asked me, partway through my presentation, "What is the difference between cost, price, and profit?"<<

Yes.

Many Mozambican, Angolan, etc revolutionary leaders learned their economics in the USSR during the era of anti-colonialism. Which pretty much guaranteed them 20 years of floundering economic growth etc. In the case of places like Zimbabwe, much longer...

McKey Wrote:
-------------------------------------------------------
> This thing I know and has been hilarious to
> discuss in Europe: The Soviets in fact transported
> raw materials, semi finished goods and goods even
> across the continent from one plant to another
> because transportation was free! What a waste of
> valuable resources. Of course transporting goods
> without any sound reasoning from one point to
> another leads to immense volumes, even if the
> country's production output was in the end
> halting.

This was done not without reasoning or not out of not knowing modern economics (although it is may true in other cases). In many cases the reason was political. for example. It was decided to develop industry in a certain region, for ex. Soviet Asia, that means there will be build factories, even far, far away from the source materials. It means volumes of transportation. So, we can question the initial decisions of communist party leaders. Sometime it was done for the real development of the region, somewhere to politically tie up the region to the central government, or authoritatively.