Rail freight development in Europe: How to deal with a doubly-imperfect competition?

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Abstract

The development of rail freight is central to the European Union's transportation policy. As it has been the case for road and air transport and for other network industries (e.g. energy and telecommunications), deregulation and market opening have been the main policy options chosen by EU to promote rail freight. But rail freight is still facing a doubly-imperfect competition. On one hand, the intermodal competition is off balance between road and rail. On the other hand, intra-modal competition between railway operators is imperfect. Railway operators are not all alike, major companies exist and they play a structuring role that regulation must take into account. According to the HHI (Hirschman Herfindahl Index) the market structure is still characterised by a strong concentration. Therefore, the key roles played by the major companies as well as, in some countries, the remaining action of the state, have to be addressed, since both of them represent some of the key features of imperfect competition in the rail sector. Numerous entry barriers remain and market power manifest itself in many areas of rail freight. This should be given special attention by regulators or competition authorities. National regulators should also communicate with one another, as they will be confronted with major companies' market power.

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APA

Crozet, Y. (2017). Rail freight development in Europe: How to deal with a doubly-imperfect competition? In Transportation Research Procedia (Vol. 25, pp. 425–442). Elsevier B.V. https://doi.org/10.1016/j.trpro.2017.05.420

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