Railways must adapt to the new global economy

RAILWAYS are only now beginning to compete effectively with automobiles and trucks, 50 years since road transport started to make an impact on rail traffic, and for many railways it is still a struggle. Rail transport now faces a new challenge: how to compete effectively in the new global economy which no longer recognises national boundaries.


When most of the world’s railways were constructed in the 19th century and the early part of the 20th century, they were built to serve national or even local needs. Railway development continued to be nationally focused through much of the 20th century. Some very large countries, notably the United States, Canada, and the Soviet Union, were able to impose national standards for rail construction and operation on networks covering very large geographical areas. This was achieved in north America despite the railways being developed by numerous private companies. There were also notable failures such as India, Australia, Argentina, and Brazil, where there was a proliferation of track gauges.

Even when national standards were imposed in many smaller countries, they were often adopted with scant regard to neighbouring countries. This was particularly so in Europe, where signalling and electrification systems differ widely between countries and even within some nations. While the bulk of continental Europe adopted standard gauge, Finland, the Iberian peninsular and the former Soviet Union countries all have broad gauge tracks.

The world is now a very different place from when railways were developed. Trade and industry is increasingly being conducted by multi-national companies which operate globally. Some governments have recognised this with the formation of strong trading blocks such as the European Union (EU) and the North American Free Trade Alliance (Nafta). There have also been some major political changes, such as the collapse of the Soviet Union and its disintegration into numerous independent nations. Here, the railways must strive to maintain the common standards they have inherited.

The Nafta freight railways are in a good position to adapt to the new challenges. The recent mergers of class 1 railways and rail privatisation have strengthened their position. Unfortunately this is not the case in Europe, where railways have been slow to adapt and change. This is why the EU is so determined to push through radical reforms which are designed to bring new blood into European railfreight operations and encourage the development of panEuropean railfreight operators (see page 23).

The railways of eastern Europe face even greater challenges. Their networks are in urgent need of modernisation but money is in short supply. Traffic flows and volumes have changed radically since the collapse of the Soviet bloc. Many of these railways are having to institute reforms to bring them into line with western European business models as they strive to meet the conditions for EU membership.

Nevertheless progress is being made. The identification and modernisation of nine major corridors in eastern Europe (see page 50) will improve rail’s ability to carry freight and passengers efficiently. The EU and the International Union of Railways (UIC) are both striving hard to make Europe’s railways more interoperable, with some success (see page 30). India is a good example of what can be achieved given the will and determination with its ambitious gauge conversion programme.

The biggest challenge is not technical, but human. There is still reluctance by some politicians and railway managers to think beyond their own national interests. They must accept the need to give rail the tools and freedom with which to compete effectively and prosper.

David Briginshaw

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