The European transportation industry

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Abstract

The European transportation industry has been evolving for the last century but the pace of change accelerated in the recent years with the deregulation and intensification of competition between different modes of transport. The new agenda of the European Commission for the future of the industry after 2010 comprises of policies that try to establish sustainable transport that will meet the challenges of the current market environment – the growing concern on gas emission, lack of funding as a result of the financial crisis, increasing oil prices and aging population in continental Europe. This paper analyses the current situation in the transport industry in Europe and the expected change in the competition between different modes with particular focus on the rail and road passenger transportation as a result of the policies for creating a fully integrated European transport network. Using the scenario analysis three possible outcomes have been identified as a result of the anticipated developments in regulations as well as feasibility of implementing those measures. Most reasonable of the three scenarios is the one where implementation will be taking place with mixed rigor in different member states, in addition the expected shift in passenger transport from road to rail will commence but at relatively slow pace. The result of the successful implementation of the new regulatory developments will be increased competitiveness between rail operators as new entrants will come to the market, increased efficiencies in the ex-monopolistic companies, and better service for the end-consumer both quality and price. The above scenarios provide a long-term perspective on the development of the intermodal competition in the passenger transport in Europe, since the time horizon for assessing the effect of a particular regulatory takes at least 10 years. The starting point is the current situation on the market which unfortunately has to go a significant change before the head-to-head competition between rail and road starts. The implications from the current study can be used as the basis for future research and scenario development with more sophistication. Regulations will definitely be in the core of transport industry development and the future trends as discussed in Chapter 3 will influence those policies with different degree. It is worth trying to understand and better prepare for the future both from business and social perspective. Thus the current study tries to bring the reader one step closer to that point.

1. Introduction

Transport network is considered the backbone of the economy. It is a complex system that is influenced by multiple variables like population consumption, settlement patterns, organization of the production processes and the capacity of the infrastructure. As a major sector of the European economy transport has a top priority in the strategic agenda for building the single European Union market. The history of the sector is characterized with the key features of network industries – natural monopolies, vertically integrated players, heavy investments in infrastructure, public subsidies, regulated prices. The globalization of economic activities and the gradual liberalization of the transport market,

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