Information published on 16 December 2009 in the UIC electronic newsletter "UIC eNews" Nr 166.

Rail Freight Portal, www.RailFreightPortal.com: Member of the month, interview with Mario Castaldo, Director of Trenitalia’s Cargo Division

  • Freight

With almost 8.500 employees, Trenitalia’s Cargo Division has for years been the leading operator in Italy for the transport of freight by train, boasting a major role in the foreign market too. It indirectly operates in all the main European countries, thanks to the synergy with other international companies of the Group Ferrovie dello Stato.

Mario Castaldo: “The transport of freight by train plays an essential role in the development and competitive momentum of the Italian economy in Europe.
In 2008 Trenitalia’s Cargo Division, the branch of the Group Ferrovie dello Stato in charge of the transport of freight, transported 28 billion tons km. The volume rises to 35 billion tons km including the transport handled by the other Group companies who operate in this sector”.

1. What actions have been taken in the last few years to respond to an increasingly competitive national and international scenario?

Mario Castaldo: “We have focused our interest towards real market and client demand. In other words, we have become and enterprise. Thanks also to the introduction of a new organization system; on one side we have a series of specialized units serving products which are railway transport oriented (intermodal, steel, raw and consumer goods, automotive and chemical). On the other hand we have commercial units which operate by territorial areas, therefore close to our smaller clients and able to respond to the peculiar needs of small production basins not directly covered by the business units”.

2. How did Trenitalia respond to the global crisis which has strongly impacted the freight transport market?

Mario Castaldo: “The difficult economic situation has negatively impacted the whole freight transport market, and even more so the railway segment, for its inevitable rigidity compared to transport by tire. But our company really needed to reorganize its industrial process: a rationalization of its structure, increased efficiency, cost containment, and a stronger bond with our major clients in order to create a real partnership. And this is what we are doing.
Only by doing so can we seize the future opportunities offered by a market which is starting to show the first signs of recovery”.

3. What’s Trenitalia’s national and international market share today?

Mario Castaldo: “At present, Trenitalia Cargo detains a 10% market share. The percentage increases in ports with an average share of 20%, and for international traffic. More precisely 25% on the North-South axis, 22% on the Eastern axis and 11% on the Western axis.”

4. What are your objectives?

Mario Castaldo: “We aim to grow and to compete against other European railway companies, but even more to compete against transport by tire. In order to do so we need to become even more efficient and effective, more and more of an enterprise. But this alone is not enough. We wish for an increased involvement from politicians and public administrators. Transporting goods via train rouses fewer external costs (accidents, environmental impact, traffic congestion) than transport by tire. In other words, it’s more cost efficient for the community, but it is not yet appropriately encouraged.
But we are finally starting to see virtuous cases, for example the recent initiative by the Emilia Romagna region incentivizing local companies to opt for rail rather than road transport”.

5. The objectives, therefore, are ‘modal equilibrium” and intermodality?

Mario Castaldo: “ Exactly. The development of intermodal transport, sea, rail and road is one of the strategic goals for mobility both in the national and European scenario. Europe has already recognized its potential and has been working to create a series of suitable devices for its development. Intermodality means integration, cooperation, attention towards the territory.
This is what, as a railway company, we are seeking to achieve when, for example, we work in synergy with road transport for short distances, connecting the smaller companies to our railway hubs via truck, and then transporting via train their goods to the final destination.
An efficient sea-rail intermodality, sustained by a suitable development of European railway corridors, may concretize our country’s huge potential, turning it into a logistic platform in the heart of the Mediterranean”.

6. Do you have any practical examples of successful intermodality in Italy?

Mario Castaldo: “I wish to stress the fact that intermodal traffic already detains 40% of Trenitalia Cargo’s overall traffic. The latest tangible example, with its added value towards the environment and the reduction of traffic congestion, is the service, inaugurated on the 16th of November, of the Gorizia – Ospitaletto rolling road. The new rolling road is managed by our subsidiary company Alpe Adria in Trieste, with the collaboration of Trenitalia and of the companies who own the intermodal terminals on either side of the line, SDAG in Gorizia, and Bertani, in Ospitaletto. This service - the first in Italy - will operate two trains per day, back and forth, four days a week, between Monday and Friday, and Trenitalia will not only supply traction service but also 19 Saasdkms type ultra-low wagons, per train. It’s a specific type of wagon used for the transport of articulated complete trucks, with an added passenger wagon for the transport of the truck drivers.
And we mustn’t forget that the development of intermodality is one of the objectives which all the Ministries for Transport and Infrastructure have agreed on in Naples, last October, during the international conference of Trans-European Transport Networks. And we strongly believe this is the way to go. For example, talking about sea intermodality, we are increasing our presence in national ports and reducing distances between the main Italian ports, such as Genoa, La Spezia, Livorno, Taranto and Gioia Tauro, and the most economically influential ports in Europe, and with the emerging ones in North Africa. We are also working on small but tangible projects like the shuttle service which will connect ports, inner harbors and dry ports together, creating a more efficient, rapid and simple shift of goods between the various locations”.

7. Intermodality is one of your program’s strong points. Do you also intend to develop conventional transport?

Mario Castaldo: “ Of course, and the recent five year agreement we signed with the Duferdofin-Nucor Group proves it. This agreement is a further contribution to environment protection and to a more sustainable development. We have estimated that transportation in a year of 1 million of steel products by train instead of road will result in a reduction of 160.000 tons of CO2 in the next five years.
Trenitalia’s Cargo Division is also acquiring new clients in market sectors in which, so far, the railway covered a marginal role. For example we shall soon be transporting complete trains of wine from the Emilia Romagna region to Germany; or the recent acquisition of transport of solar panels.
Our commitment aims towards the reorganization of single wagon load transport system. The market’s constant changes, which is so strongly affected by the economic trend, pushes us to change not only our commercial process but the industrial one also, in order to offer a high quality product at competitive prices. For this reason we are progressively developing a network of platforms”.

8. Can you tell us more about this project?

Mario Castaldo: “it’s a door-to-door service, which includes terminalization via truck and logistics services, tailored to the natural commercial vocation of each area and with the cooperation of various partners. In the south of Italy we are already active in Catania (Aquicella and Bicocca), Marcianise, Bari and Cosenza.
From 2020 market experts foresee an explosion of freight traffic which will be served primarily by road transport. We hope to be able to retain control in those areas of the country with a high concentration of imported and exported goods”.

9. What can you tell us regarding the internationalization of the FS Group?

Mario Castaldo: “We are consolidating our already strong presence on the international market, which, in 2008, accounted for 53% of Trenitalia Cargo’s overall transported freight.
Our activity in Europe is not only focused on the collaboration between other foreign undertakings but also on establishing partnerships with other Group Companies operating in the sector, such as PolRail, EastRail, Alpe Adria, Trenitalia Logistics France and the German TXLogistik, 51% owned by Trentalia, which has consolidated its presence in Europe extending its network in Germany, Italy, Sweden, Denmark, Austria, Switzerland, Holland and Hungary, and is strategic partner by offering rail transport and logistics services with the use of interoperable locomotives and the most advanced information technology systems.
Trenitalia wants to develop its traffic on the North- South axis, but also in areas of great potential in Eastern Europe such as Romania and Bulgary, and plans to penetrate as far as Russia, with the support and collaboration of PolRail, a joint ownership between Trenitalia and the Polish Railway Company.
And we receive added value from the other companies of the Group specialized in intermodal transport both in Italy and abroad like Cemat and Italcontainer.

10. Have you invested in new trains?

Mario Castaldo: “Certainly. Even during this crisis we have invested in our rolling stock, with 24 new electric locomotives, 7 diesel and 10 interoperable locos, and increased our fleet with the acquisition of new wagons: 180 Shimms, 100 SR6, 500 flat wagons. To this you have to add the revamping of wagons for the dedicated transport of steel and automotive goods. We are preparing to seize the opportunity to garner more traffic when this period of economic setback will be over.

11. Are you investing in technological innovation in the freight division?

Mario Castaldo: “Our company is not new to using the most recent technological products. Recently we equipped our staff with PDA’s to run train formation operations in the plant; and we’ve invested 7.5 million euro for the development of a new information system for the management of customer relations. We are also working on other projects such as the electronic waybill and online booking for both national and international trains”.

12. Talking about infrastructures, which efforts have been made to make the transit of freight trains more adequate, both in Italy and abroad?

Mario Castaldo: “We have two important results to show: the doubling of the Bologna-Verona line, an integral part of the Trans-European Corridor 1 (Berlin-Palermo) and the Corridor 5 Intersection which will connect Eastern to Western Europe. This work will enable us to increase our transport capacity on the line and reduce the time of travel of freight trains.
With the completion of the High Speed on the North-South East-West axis, we will be able to offer added value not only to passenger service but to freight transport too. With the new High Speed line we can further develop cargo traffic by freeing the traditional lines to and from the main industrial Italian and international realities”.

13. Italy is an important gateway to the Mediterranean, also for trains coming from the rest of Europe. What actions have you taken to respond to an increasing opening of the national borders to foreign countries?

Mario Castaldo: “We are one of the most liberalized countries in Europe. 56 companies in Italy detain a railway license, and, of these, 14 operate in the freight transport sector. Favoring a thorough liberalization is vital if we want to achieve fair trade in Europe. Alas, not all countries have operated a liberalization strategy, as Italy has. We still cannot count on reciprocity, and it is penalizing us: a clear example is France, which has still not adopted this inevitable change which is taking place all over”.

14. On 5th December Brussels hosted Train to Copenhagen, a trip organized by the UN in collaboration with UIC to raise the world’s leaders awareness towards environmental sustainability. Ferrovie dello Stato took part in the event. Which steps is Trenitalia FS taking towards the protection of environment?

Mario Castaldo: “Yes, the Group FS supported this international project.
But the company’s commitment for a sustainable development must also be proactive towards its clients. Trenitalia is a promoter of the Ecotransit project, an online service especially designed to help companies develop more eco-friendly transport strategies.
The program is available on our website, www.ferroviedellostato.it, in the section dedicated to freight transport. Ecotransit allows our clients to obtain an estimate of energy consumption and pollutant emissions depending on the different transportation options. All you need to do is indicate origin and destination, type of transport, weight and product type. A useful way for our returning and potential new clients to contribute to environmental protection.

Mario Castaldo’s Biography
Having achieved a full honors degree in law from the University of Naples, Mario Castaldo began his extensive career in Ferrovie dello Stato in 1979. At the head of Trenitalia’s Cargo Division since April 2008, he has gained a vast experience in the Group, both in the passenger and in the freight divisions, holding important offices as Head of the Chemical Business Unit, and as Managing Director of subsidiaries SERFER and Cargo Chemical.