On October 20 the International Union of Railways launched the European Rail Freight Portal, an online portal dedicated 100 % to rail freight. The site, www.RailFreightPortal.com, aims to create a positive perception of rail freight, building on the remarkable progress made by the railway companies in response to the logistic needs of their customers.
UIC members have improved their services and freight performances significantly over the last decade. However, rail freight is still perceived as an underperforming business. For this reason the Rail Freight Portal has been initiated with the aim to enhance the perception of rail freight as well as to promote rail transport.
The portal provides attractive and up-to-date information on rail freight and statistics, accessible to the general public, journalists and potential customers. It strives to be a focal point for people interested in railways with the role of presenting content on a general level and based on the visitor’s need for specific information about reports and links to other sites.
The portal will also feature freight news and offer the visitor the opportunity to take part in surveys and polls which are related to important and ongoing topics. On top of that, every month a special report will be published on the site. It will focus on the strategy and direction of one particular member. This month the reader can dive into the leading railway in Belgium, SNCB Logistics.
The site has been developed together with the members of UIC and the vision is to create Europe’s leading rail freight portal. It represents a unique opportunity for railway undertakings to communicate their key rail freight messages in a European context.
The Rail Freight Portal launches every month a special report which focuses on the strategy and direction of one particular member. This month SNCB Logistics are in the lime light and Geert Pauwels, freight coordinator of the SNCB Group, exclusively gives his thoughts about the future of rail and how this is connected with SNCB Logistics’ strategy.
In the growth tracks of a high-performance international logistics group
SNCB Logistics, the freight division of the Belgian railway company, NMBS/SNCB, is undergoing a thorough transformation so as to grow from a traditional national railway company into a high-performance international logistics group for multimodal transport. Unfortunately that growth track is being slowed down by the economic situation now.
“But I can tell you straightaway,” says Geert Pauwels, “thanks to this transformation our organisation and infrastructure will be ready to take advantage of the turning point when it comes. Nobody knows when the recession will be over, but it won’t last forever. At that moment, we will be the first one in the starting blocks.”
Proactive plan for the future
Geert Pauwels: “Since liberalisation the traditional rail operator, BCargo, has had to deal with many problems in terms of customer-orientation, international presence, quality and productivity, and in addition the company was making a loss. A few years ago we started to implement a clear strategy to turn the situation around, but because of the economic malaise we are now obliged to speed up the process. The NMBS/SNCB freight group underwent thorough restructuring in 2008 so as to be better able to respond to the needs of the market. The specialised subsidiaries, IFB, Rail Force and Xpedys are responsible for commercialising the various goods transport products, whilst B-Cargo’s role is focussed on the operational aspects of transport, in cooperation with the technical divisions within NMBS/SNCB and the so-called corridor managers for international rail transport. Together they make up the SNCB Logistics.”
Geert Pauwels: “In 2008 SNCB Logistics had to contend with a loss of more than 100 million euro, 85 million of which were structural. Because of the economic crisis there will be a further increase in losses in 2009. So we need faster implementation of the ‘Industrial Plan SNCB Logistics’, which we started to carry out last year. The plan consists of a restructuring proposal including, amongst other things, reorganisation of our cost structure, staff reductions and a complete reorganisation of single wagon transport and the local operations. Drastic measures, but essential, because the financial, organisational and commercial challenges remain considerable. We have an important restructuring behind us but, like in a marathon, the last 10 kilometres are the most difficult. Nonetheless we are and continue to be ambitious for the future. Our goal is to get back on an even keel financially by 2012 and achieve a turnover of 1 billion euro. That should allow us to invest in our activities abroad and continue to expand them.”
Three strategic priorities
Geert Pauwels: “The strategic vision we traced out in 2003 was based on three priorities which we have pretty much fleshed out now. For a ‘small’ transporter like us, squeezed between big European players, it is certainly not easy to hold your own in the liberalised market of goods transport. Nevertheless, in this extremely competitive market we still want to take our place as the number one rail operator for the Benelux and the north of France. It is obvious though that we need to be financially stronger to become a bigger player - hence the current cost-cutting policy.”
Geert Pauwels: “The first priority we put forward was a strengthening of our position as a regional operator by increasing the quality and productivity of B-Cargo and the locomotive division of NMBS/SNCB. Priority number two focussed on establishing our international position. We want to offer our services all over Europe. In the meantime we have developed a large number of goods axes, either in open access (traction over the whole journey which we carry out ourselves), or via a cooperation agreement with partners - for example, Sibelit on the Belgium–Italy axis - or via stable partnerships with international players like DB Schenker Rail, ECR, SBB Cargo and so on. As a freight group we must focus on corridors with large volumes now and provide a good service on them.”
Geert Pauwels: “A third priority was the creation of segment-specific subsidiaries for the most important component markets, with a distinct commercial approach per sector in terms of sales and customer monitoring. Now, then, we have IFB as a terminal operator specialised in container transport, Xpedys for dry bulk goods and metal products, and Rail Force for chemicals and car transport. Besides their range of solutions for rail transport, these branches – and their subsidiaries – aim to offer a complete logistical range: wagon management, ‘last mile’ operations, inland and short sea shipping, trucking and warehousing.”
Rail, inland shipping, terminals and trucks
Geert Pauwels: “The bottom line is that SNCB Logistics now has a well-organised commercial organisation with the emphasis on customer-orientation, a proactive approach and the ongoing development of new products. In concrete terms that means that we have a complete, competitive range of multimodal transport solutions in house, based on complete control of the whole transport chain, a large, modern fleet, quality controls at every level, and vital services such as a tracking & tracing system, optimised transport planning, contracting and financial management.”
Geert Pauwels: “It goes without saying that SNCB Logistics wants to continue to promote the railways, but we shouldn’t forget that besides that we make a good 200 million euro from inland shipping. So it comes down to better integration of these two modes of transport. I think that the railways and inland shipping could have a considerably larger market share in ten years than we have now. There is just a lack of alternatives. As a matter of fact, after the Netherlands, Belgium has the densest inland shipping network leading to the Netherlands, Germany, France and, further on, to Eastern Europe”.
Geert Pauwels: “Obviously rail freight transport has every opportunity to win back market share. Besides the ever-increasing inland shipping traffic, rail is, after all, the alternative to the road network, which is so congested that it is slowly grinding to a halt. If all the external costs caused by road transport were really calculated, inland shipping and rail would immediately become more competitive and the volume of trade would increase. Believe me, sooner or later that calculation will be made. In fact there has long been talk of government measures to promote the desired modal shift from road to rail. That would straightaway mean a step in the right direction for sustainable mobility – as SNCB Logistics offers it – with respect for the environment and safety.”
The railways of the future
Geert Pauwels: “Belgium is a small country, but at the same time it is a crossroad of European transport axes. And, what’s more, it has a world port at the front door and a gigantic hinterland at the back door. Good cooperation with our strategically chosen partners is certainly one of our strongest points. The extensive cross-border network that has developed increases commercial speed and creates transparency for our customers.”
Geert Pauwels: “Another international boost is the international project to improve the quality of single wagon load transport, of which we are co-initiators. Transport by individual wagons represents a third of the traffic, but two thirds of the costs, so that measures are needed all over Europe to protect the sector from worse. A big part of our costs reductions aims at the improvement of the single wagon load transport. Many IUR members have invested a lot of resources in it. Here, too, it will soon become obvious that cross-border cooperation is needed to improve quality and commercial service provision.”
Geert Pauwels: “If we want to gain ground internationally we’ll have to really fight for it: reduce costs, remain alert and – absolutely essential – constantly adapt our infrastructure and logistics concepts. As a fervent marathon runner I can say from experience that you only know where your limits are when you try to extend them, and that’s what we’re busy doing right now.”
Biography of Geert Pauwels
Since May 2008, Geert Pauwels leads the SNCB Logistics, SNCB’s freight division. SNCB Logistics has the ambition to become a high-performing European multimodal player, offering rail and barge transport. SNCB Logistics bundles the commercial and operational companies for European freight transport. The commercial subsidiaries within the group are IFB for container transport and as terminal operator; Xpedys for dry bulk and metals and Rail Force for chemicals and automotive. BCargo handles the production of the train transport. Furthermore the group has participations in a number of international corridor companies, together with the main European rail operators, in order to offer qualitative and cost-efficient cross-border rail transport all over Europe. SNCB Logistics has subsidiaries in Belgium, Germany, the Netherlands, Italy, France, Switzerland and Poland.
Geert Pauwels heads this group of companies. He sets and implements a strategic vision that will enable the SNCB Freight Group to serve the customers in the best possible way, to counter the competition and to grow significantly in the future. In the mean time, he combines this function with CEO of subsidiary IFB/TRW. He holds a master in economics (UFSI Antwerp) and international business (ESC Grenoble). Before joining SNCB he held several positions at McKinsey, where he started as Business Analyst mostly for the pharmaceutical and telecom sectors. Later on, as Engagement Manager, he was located in the US, Asia and Europe where he advised CEO’s during the restructuring of multinational companies in the logistics sector. During two years Geert also worked in a governmental environment on air traffic issues and he was governmental commissioner at Belgocontrol. Geert is 35, married and has a young daughter. He likes to travel and is an experienced marathon runner.
