JOINT TRANSPORT RESEARCH CENTRE
Round Table, 5-6 February 2009, Paris

Discussion Paper No. 2009-8
updated JUne 2009

Integration andCompetition between
Transport and Logistics
Businesses
SUMMARY AND CONCLUSIONS

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Summary & Conclusions – Discussion Paper 2009-8 – © OECD/ITF, 2009

Table of Contents

Introduction ............................................................................................................................... 4
1.

Integration in maritime shipping, port operations and logistics – is it a definitive trend
and is it likely to result in welfare losses? .......................................................................... 4

2.

Complete port and rail integration ..................................................................................... 8

3.

Horizontal rail mergers ...................................................................................................... 9

4.

Vertical integration and essential facilities ....................................................................... 10

5.

Capacity constraints and bottlenecks .............................................................................. 12

6.

Vertical separation and transaction costs ........................................................................ 13

7.

Setting the framework for competition – policy and regulatory responsibilities ............... 14

8.

Infrastructure ownership and pricing in a vertically separated rail system ...................... 15

9.

The risks of regulatory intervention to promote competition ............................................ 16

Conclusions ............................................................................................................................ 17
Notes ...................................................................................................................................... 19
References ............................................................................................................................. 21
List of Participants .................................................................................................................. 24

Summary & Conclusions – Discussion Paper 2009-8 – © OECD/ITF, 20093

Introduction
The Round Table, chaired by Russell Pittman of the US Department of Justice, reviewed
trends in horizontal and vertical integration in logistics businesses, maritime shipping, ports
and rail freight transport and examined the circumstances in which integration might reduce
the efficiency of the transport system. There are likely to be net benefits to society from suchintegration in competitive markets but if integration eliminates competition, market power
might result in excessive prices, suboptimal investment and lower than optimal levels ofservice for the users of transport services. Options for sector specific regulators andcompetition authorities to manage the risks of market abuse were discussed and theadequacy of antitrust law and competition authorities to take remedial action should
businesses exploit market power were assessed.
Five introductory papers and presentations were commissioned to provide thefoundation for the discussions:• Frémont (2009) and Van de Voorde et al. (2009) review empirical evidence for vertical
integration of maritime shipping, port and logistics activities and consider whether
economies of scope have been realised and the degree to which integration has
created market power
http://www.internationaltransportforum.org/jtrc/DiscussionPapers/DP200901.pdf,
http://www.internationaltransportforum.org/jtrc/DiscussionPapers/DP200902.pdf;• Marc Ivaldi made a presentation on the benefits of vertical integration in railways;• Thompson (2009) examines economies and diseconomies arising from the integrationof rail freight transport with port operations in Turkey and South Africa
http://www.internationaltransportforum.org/jtrc/DiscussionPapers/DP200905.pdf;• Pilsbury et al. (2009) set out the framework for competition assessments and examinecompetition issues and intervention options in the case of horizontal, vertical andconglomerate mergers in European railways
http://www.internationaltransportforum.org/jtrc/DiscussionPapers/DP200904.pdf.
The competitive effects of integration depend on the structure of the market, as thediscussion summarised here underlines. This has important implications for regulatoryintervention, implying that a case-by-case approach needs to be taken for assessing mergers
and acquisitions.
1.

Integration in maritime shipping, port operations and logistics – is it a definitive
trend and is it likely to result in welfare losses?

There is a substantial economic literature identifying ways in which economic efficiency
can be increased through vertical integration in a wide range of industries, by eliminatingexternalities and aligning interests. Menard (1997) also cites eliminating doublemarginalisation1 and reducing transaction costs as a source of economic gains. Horizontal
integration can increase efficiency by yielding economies of scale and scope. Integration
takes a range of forms, from contractual arrangements to mergers and acquisitions. There isan extensive recent literature recording mergers and acquisitions in maritime shipping, port
terminal and related port and logistics businesses (Van de Voorde 2009, Meersman 2009,
Notteboom 2008). This is generally portrayed as the dominant characteristic of structural
4

Summary & Conclusions – Discussion Paper 2009-8 – © OECD/ITF, 2009change in maritime shipping over recent decades; a trend that is expected to continue,
intensifying concentration in the sector2.
Integration in the sector can involve a wide range of businesses. Horizontal mergers canbe between shipping lines, terminal operators, logistics providers, rail companies or between
other inland carriers. In rail markets, mergers of companies providing parallel, competing
routes have different implications for efficiency than “end-to-end” mergers that linkcompanies along a route. This is discussed in the rail section below. A parallel situation
exists with shipping lines, where a distinction can be made between what might be termed“route concentration” and “route extension” mergers. Shipping lines and logistics companies
have responded to large shippers seeking more global services with horizontal mergers,
acquisitions and alliances of both the route extension and route sharing kind. Vertical
integration can involve any combination of the businesses listed but the impacts of shippinglines acquiring terminals may be very different from an inland carrier acquiring a logistics
business, a point examined in Fremont (2009).
Empirical research at INRETS in France, (Frémont 2007 and 2009) suggests thatvertical investments by maritime shipping groups have been limited mainly to ports and tosome hinterland transport services. Though most have logistics units, these are generally run
at arm’s length as separate business units. Shipping lines concentrate spatially, with large
volumes on a few sites, to achieve scale economies. Shipping companies tend not to get
involved in hinterland container transport services but usually take on a limited co-ordinatingrole rather than providing transport services directly. Vertical integration generally involves
acquisition by shipping lines of port terminal operators to obtain dedicated container handlingfacilities that can be managed to minimise waiting times for ship berthing and loading. This isdriven by economies of scale and scope in the logistics of the container as opposed to thelogistics of supply chains.
Frémont notes that some attempts to integrate resulted not in efficiencies but in unwieldy
management problems resulting from the size of the business units that emerged anddifficulties in establishing common management systems. The costs were sometimes foundto outweigh the advantages and de-mergers followed. The take-over of P&O-Nedlloyd byMaersk-Sealand to form Maersk Line in 2005 is a case in point. P&O merged with Nedlloyd
in 1997. Its share price rose six-fold in two years. Maersk’s acquisition took the combined
market share of the group to 18% of world container traffic. However, customers were
subsequently lost, forcing restructuring in 2008 and the shedding of a large number of jobs.
Scale economies may not be sufficient to make large mergers profitable, especially whenmany duplicate services are involved. This may tend to limit concentration in maritime
shipping. Ongoing research at the University of Antwerp3 has also found negative economies
with concentration in maritime container transport in specific cases. Strategic power was
proposed as the reason that mergers nevertheless continue to occur.
Another potential explanation, in the case of vertical integration, is that competition in
maritime container shipping has reduced profit margins to the minimum, and shipping lines
seek higher margins through service differentiation in other parts of the supply chain. A 1999
study by Mercer Management found the growth in market capitalization for logistics
companies was running at 30% while that for shipping companies was estimated at 2%.
Investing in logistics may improve the overall financial capacity of shipping lines given ahigher return on investment from “care and nurturing” services for higher margin customers.
Shareholder pressure may also push companies towards involvement in high price-toSummary & Conclusions – Discussion Paper 2009-8 – © OECD/ITF, 20095

earnings ratio businesses. However, some shipping lines have found logistics services adifficult business to make profits in.
The competitive effects of vertical integration depend on the structure of upstream anddownstream markets. Vertical integration that fails to increase market power by eliminatingcompetitors or raising entry barriers is unlikely to have adverse consequences for consumers(Riordan, 2005). In this context, antitrust policy traditionally focussed on exclusionary
practices and the potential for businesses to foreclose on competitors by denying supply of
inputs or services on which they depend, leveraging monopoly from one market to another.
In contrast, many economists and lawyers, particularly those identified with the Chicago
school of economics, see little in microeconomic theory to provide a rationale for such
behaviour and highlight the importance of efficiencies arising from vertical integration,
arguing that there is no economic basis for concern with exclusion in many cases as there is
generally more profit to be made by trading with rivals (Posner, 2001). Posner suggests thismay be overstating the case and “Post Chicago Economics” contests the conclusion(Riordan, 2008), using game theory to suggest a rationale for raising rivals’ costs as a way toforce them out of the market (Salop et al., 1995). No evidence of exclusionary practices waspresented at the Round Table, but the team at the University of Antwerp intend to apply thisanalysis to the ports sector, in an extension to the discussion in Van de Voorde (2009). Evenif vertical integration is usually not a problem as such, it clearly can raise competition issues
when combined with exclusive access to key infrastructure, for example, where an airport
makes an exclusive contract with an airline for the development of a terminal in the absenceof a second, common carrier terminal at the airport (OECD, 2009). This point is addressed in
the section below on essential facilities. The potential for vertical integration to undermine
economic efficiency clearly needs to be assessed case by case.
Ports in OECD countries generally face competition from neighbouring ports. Indeed, asa previous Round Table on Port Competition and Hinterland Connections (OECD, 2009a)
concludes, ports have seen their market power decline substantially with investment inhinterland transport infrastructure, that results in distant ports competing for business inoverlapping hinterlands. Market definition is critical to understanding the nature of thecompetition, and geographic markets have become much larger. Overlapping hinterlands
mean that both port and shipping competition concerns, above all, route competition. For
instance, the Port of Prince Rupert in Canada (on the west coast) and the US Port of Norfolk(on the east coast), compete for the Chicago inbound traffic from South Asia (see Table 1).
Competition authorities need to draw relevant market boundaries increasingly widely.
Concentration of the ownership of port terminal operations can give rise to market
power, with the potential to raise serious issues for the public interest if, for example, mostterminals in a port are owned by a single company and that company acquires assets inneighbouring ports. The land-leasing policies of port authorities matter in this respect. In
OECD countries, relevant markets are wide enough that concentration of port terminal assets
is not currently a concern. Outside the OECD, this is not always the case.
While investing in port facilities in a cluster of ports may give a shipping line competitive
advantages, it does not necessarily imply monopoly power vis a vis shippers if other routes
are available and economical. For example, the acquisition of Cast North America by
Canadian Pacific was contested on the grounds that the group’s intermodal container
shipping companies (Cast and Canada Maritime) would suppress competition on services
between Montreal and Northern European ports. Although CP controlled 80% of the route on
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Summary & Conclusions – Discussion Paper 2009-8 – © OECD/ITF, 2009

acquisition, the Competition Bureau suspended proceedings in 1997 in response to theplanned entry of a competing service operated by Maersk-Sealand Service and P&O
Nedlloyd Container Line. It eventually dropped the case on the grounds that: (1) Cast was
clearly a failing company and so this factor needed to be considered; but (2) a survey ofshippers for the case revealed that Canadian shippers had several alternative options,
including services via New York and Halifax. While neither of these routes was as good as
the Montreal option for buyers, they were sufficiently acceptable that the merged company
would not be able to sustain a price rise. Route competition was the decisive factor although,as the case illustrates, the potential for entry to the market is also a key consideration in
deciding if integration compromises competition.
Table 1. Transit times between selected ports in South and East Asia
and North America

Transit Time From(days: hours)
East coast ports
Halifax
NY/NJ
Norfolk
Norfolk (via Panama
Canal)
West coast ports
Vancouver
Los Angeles

Mumbai(India)Port
Kelang(Malaysia)

14:13
15:01
15:18

17:21
18:20
19:00

18:01
19:03

13:19
14:22

Singapore

Laem
Chabang(Thailand)

Hong
Kong
(China)

18:06
19:05
19:12

19:20
20:18
21:01

21:00
21:23
22:06

24:13

23:12

20:21

13:01
14:13

Note: Times are based on 22 nautical miles per hour.
Source:World Ports Distances Calculator (http://www.distances.com.) This table was previously
published in Brooks, Mary R. (2007), Addressing Gaps in the Transportation Network:
Seizing Canada’s Continental Gateway Advantage, Toronto: Conference Board of Canada,
October. ISBN: 978-0-88763-802-2.

The Maersk–P&O Nedlloyd merger did result in what the EC regarded as an excessive
concentration of services on some routes – 80% of container shipping between the EU andSouth Africa. The EC therefore required divestment of the South African services andwithdrawal of P&O Nedlloyd from the Grand Alliance before approving the merger.
The impact of horizontal integration on prices for container shipping is not easy toassess as data is not readily available and many factors affect pricing besides consolidation.
Hummels (2008) has tracked prices by commodity in container shipping on a number ofroutes looking for price discrimination, reflecting, among other factors, price elasticities ofdemand for the commodities. He interprets the presence of such pricing patterns to be anindication of the exercise of market power and finds discriminatory pricing on some thinly
trafficked shipping routes serving African ports. Hummels suggests trade volumes arearound 6% lower than they would otherwise be as a result and appears to interpret this asevidence for the abuse of market power. A more benign interpretation is that traffic is
insufficient to support more than one service and that this is a form of Ramsey pricing,required to cover the fixed costs of serving these routes when the alternative is no service at
Summary & Conclusions – Discussion Paper 2009-8 – © OECD/ITF, 20097

all. As barriers to entry do not appear to be particularly high in these thin markets, this seems
the more likely explanation. Some market power is a feature of most markets rather than an
exceptional situation and where barriers to entry are not large, opportunities for abuse arelimited.
The longstanding freedom of liner shipping conferences to co-ordinate schedules andprices was curtailed by EU law on 18 October 2008. It is difficult to assess the impact. Tariffs
changed little through 2008, too short a period to assess the impact of the change, and sincethen any response has been swamped by the impact of the economic crisis. It remains to be
seen how the EU will rule on consortia (Consortia Block Exemption Regulation 2000/823).
On major trade routes, liner carriers need to own significant numbers of vessels (8-9 forexample to serve the Asia-Europe string) and many shippers will only buy from the three orfour carriers that can provide global coverage. If the only way to get business is to own 8 or 9
vessels for Europe–Asia, 6 or 7 vessels for transpacific and 3 or 4 vessels for transatlantic
traffic and still have some presence in North-South trades, companies have to be very large
to be considered for the business. Consortia formed by several firms to create a larger entity
to achieve this minimum efficient scale may therefore be procompetitive rather than
anticompetitive. Without authorisation of consortia there may therefore be less competition,
not more; consortia members do compete within the consortia, acting not as “good friends”
but merely “allies of convenience” in response to the market power of the largest buyers.
Categorical evidence to support or refute this point is unlikely to be forthcoming, given thenature of the transactions.
The bargaining power of shippers lies in choice and large shippers have some control
over this through their ability to allocate business among competitors on specific routes.
Globally, large shippers have reduced the number of companies they buy from but many do
act to preserve choice route by route. On the main trade routes, shippers have not had tosacrifice competition among their suppliers in return for more global services.
The global reach of logistic and transport conglomerates adds an increasinglyinternational dimension to the regulation of competition. Some participants in the round tablespeculated that there might therefore be a need for new international regulatory authorities.
However, the “effects doctrine”, adopted by most antitrust authorities, makes it possible toaddress potential problems arising from mergers, and other forms of integration throughcontractual arrangements, in any part of global supply chains. According to the doctrine,
domestic competition laws are applicable to foreign firms, and also to the behaviour ofdomestic firms outside a state’s territory, whenever their behaviour or transactions produce a
relevant "effect" in the domestic market. The potential to impose penalties in their own
markets gives the largest antitrust agencies, in the EU, USA and Japan, sufficient reach toregulate mergers anywhere in global supply chains. For example, in 1998 the Competition
Directorate General of the EC succeeded in imposing conditions on the merger of two U.S.
aircraft manufacturers, Boeing and McDonnell Douglas – a merger that had been
investigated and not challenged by the US Federal Trade Commission4. These remedies areprobably sufficient to regulate behaviour in international transport and logistics markets.
2.

Complete port and rail integration

The bulk of freight rail and port assets are integrated in a single national company insome countries. In theory, this should contribute to technological and network efficiencies.
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However, it also provides increased scope for market power and the inefficiency thatsometimes accompanies market power. Thompson (2009) reviews the experience of thisextreme form of integration in Turkey and South Africa, finding that much of the potential
efficiencies are lost. Revenues from profitable activities are used to subsidize other parts ofthe system, robbing the profitable businesses of funds for investment. As a result prices forshippers are inflated and services poor.
The ports in Turkey are currently being privatised, which will end cross-subsidy of theheavily loss-making, largely passenger rail system. Port profits have been insufficient tomake up rail losses for many years. In South Africa, port profits have also subsidized therailways. While the country’s separate iron ore and coal export lines are reasonably efficient,
the remaining general freight network is not. Port revenues are used to cover rail losses atthe price of much higher port charges than apply in similar ports around the world. Moreover,uniform charges are applied across all of the country’s ports when conditions in the ports arefar from uniform. The cross-subsidies inherent in the current arrangement mean that trade iseffectively taxed to support the railways. The support to the railways has not been directed atinvestment in efficiency as the general network is in poor condition. Much of the money
appears to be used, as in many other state-owned railways around the world, to maintain an
inflated workforce.
Discussion in the Round Table concluded that in this extreme form of concentration,
vertical separation of ports and railways is the starting point for improvement in performance.
This increases the transparency of financial flows and provides for support to the railways tobe subject to tests of value for money. Horizontal separation of the ports would bring benefitsof competition and freedom to price services according to local conditions that are likely tooutweigh any advantages of port integration. The railways could also benefit from horizontal
separation, especially in South Africa where the iron ore and coal lines are viable without
public support and very different businesses from the general freight network. Whether there
might be scope for competition in these rail markets, or benefits from retaining vertical
integration with dedicated port terminal facilities
in Saldanah and Richards Bay goes beyond the scope of the discussions at the Round
Table.
3.

Horizontal rail mergers

Ivaldi and McCullough (2005) examined the welfare effects of mergers and acquisitionsin the US rail freight transport market following the 1980 Staggers Act. They found gains inefficiency from integration, mainly horizontal, that gave rise to an increase in consumer
surplus of some 25% between 1986 and 2001, the benefits of integration outweighing any
impact on competition. It is not easy to separate the effects of consolidation from the deregulation that opened the way for mergers, and particularly the ending of prescriptive rail
tariff regulation. Competition from a newly liberalised road haulage industry was also
important in driving efficiency on the railways (Boyer 1987).
The most important threat to competition from horizontal integration is that by reducing
the number of competitors in the market the merger may give the merged company market
power. When the merger is between firms not currently operating in the same geographicalmarket there remains the issue of eliminating a potential new entrant from competing in themarket. The US rail mergers earlier in the time period of the study avoided the first of these
Summary & Conclusions – Discussion Paper 2009-8 – © OECD/ITF, 20099

effects as they mainly involved linking lines in different parts of the continent – segment tosegment mergers – rather than integrating railways competing on the same territory.
However, the 1990s saw major merger projects that resulted in the western and easternparts of the US each reduced to two main competing railways: the mergers of the Burlington
Northern and Santa Fe (1995) and the Union Pacific and Southern Pacific (1996) in the west,
and the carving up of Conrail by CSX and Norfolk Southern (1998) in the east (Pittman2008). Ivaldi and McCullough’s assessment covered a period (1986-2001) in which thenumber of Class-1 railways was reduced from 36 to 9, and it is notable that in the last roundof more “parallel” mergers the data suggest weakening of the gains to consumers . At thatpoint the Surface Transportation Board introduced a temporary moratorium on mergers while
it examined the likely impact of further consolidation on competition. It subsequently lifted themoratorium but increased the burden placed on merger applicants to demonstrate publicbenefits from large mergers (Surface Transportation Board 2001; Kwoka and White, 2004).
Since then there have been no further mergers.
Shippers in the US frequently complain of abuses of market power resulting in poor
service or high tariffs. The Government Accountability Office has on a number of occasions
identified potential concerns with market power in the rail industry (GAO 2006). In response,
the Surface Transportation Board recently commissioned a study (Christensen 2008) toanalyse current conditions for competition and potential measures that might be taken toenhance competition in the industry. This study failed to find evidence of market power
abuse. Specifically the study noted that the indicators generally employed to measure market
power (mainly the ratio of revenues to variable costs) are inadequate for the task. Despite
this shortcoming, the study concluded that “the exercise of market power appears to haveincreased in the freight railroad industry over the last twenty years,” but this increase was no
more than that necessary for the railroads to achieve “revenue adequacy” – i.e. to earn areasonable return on capital. It therefore cautioned against any attempts to introduce
network-wide pricing or trackage right rules, preferring instead specific local measures, suchas arrangements for sharing congested terminals, to address local service quality andcapacity issues.
Trackage rights (providing access to a competitor’s railway) were introduced on specificparts of the US network as conditions for the approval of mergers by the Surface
Transportation Board where parallel routes were merged. Trackage rights have also been
negotiated voluntarily to provide access to US ports and other markets served by a single
railway.
4.

Vertical integration and essential facilities

Pilsbury (2009) examines the economic framework for making competition assessments
and reviews the assessment of the potential for market power abuse in European case law
on horizontal, vertical and conglomerate mergers concerning railways. The review confirms
the theoretical considerations discussed above that generally, vertical integration presents nothreat to competition when neither of the merging parties have horizontal monopoly power inany part of the supply chain. However, there have been specific instances in the sector
where vertical relations have been found problematic. The UK Competition Commission
blocked the proposed merger of EWS (the largest British freight train operator) with Marcroft,a wagon maintenance firm, because it believed EWS, due to its dominance in train service,would be in a position to impose lower quality of service for wagon maintenance on its
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competitors and would be prepared to lose market share in the maintenance market in doing
so, as the losses here would be outweighed by gains in its main freight haulage business.
Across the supply chain, the links most vulnerable to market power are often rail
terminals and private sidings and the track linking them to the main rail networks, particularly
in ports. These control access to loading and unloading facilities for competing train
operators but are frequently owned or operated by a single railway company, usually thehistorically incumbent railway. As such they may be designated essential facilities bycompetition authorities or rail regulators and be subject to regulations that impose nondiscriminatory access on the basis of published tariffs – although quality of service including
the timing of the slots made available is also an important aspect of discrimination and not
simple to monitor. Such facilities are subject to strong tests by competition authorities toestablish if they really are essential. European case law follows a definition under whichfacilities are only classified as essential if without access to the facility there is no feasible
way to compete and moreover there is no possibility of replicating the facility and covering its
costs from the entrant’s activities (Castaldo et al 2007). The difficulty of passing these tests
explains why only three cases involving essential rail facilities have been taken to DGCOMP.
Judges and regulators everywhere are reluctant to impose access rights as this acts as agreat disincentive to private investment in new facilities.
The investment incentives for a private owner of an essential facility that decides
autonomously on access will tend also towards underinvestment (OECD 2009). It might wellbe the case that reducing the owners control over access or regulating access charges
outperforms unrestricted private ownership. The emergence of the voluntary agreements
discussed below suggests this is so. A key question for future research is under whatcircumstances do the voluntary agreements not emerge?
Because of the aversion of regulators to imposing access rights, and because
competition from trucking provides a viable alternative for most traffic, voluntaryarrangements for sharing essential facilities are more frequent than regulated access. In theUS, voluntary trackage or interchange arrangements for access to ports are the norm andrailroads often form jointly owned systems, such as at the Houston Port Terminal, to provide
for non-discriminatory port access. It was noted that the US Class 2 Iowa Interstate Railway’s
biggest intermodal business is selling terminal access to Union Pacific railway. In Europe, thePort Authority of Antwerp brokered a large reduction in SNCB’s prices for locomotives
hauling trains within the port in 2008; SNCB, the incumbent national train operator, was the
only company with locomotives authorised to run on the intra-port network. In Rotterdam aneutral company, Rail Feeder, was created at the instigation of the port authority in 2008 to
run 80% of intra port rail operations with published tariffs following several years ofcomplaints that the incumbent national infrastructure manager was unable to offer slots to
new entrants.
Canada is an exception to the trend for voluntary arrangements to govern access toessential facilities. Canadian National and Canadian Pacific saw their exclusive access to
private sidings compromised when the government required each to serve the other’scustomers at prescribed rates over an area extended to 30 km in 1987. The Canadian
regulator calculates annually the charges to be applied across the country. Recently thecalculation switched from being based on variable costs to covering also part of fixed costs at
the urging of the rail companies so that neither risks being out of pocket. Canadian railways
seldom make recourse to this regulation, however, as they are averse to provoking
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retaliatory action elsewhere on the network. And as in the US, the railways have enteredvoluntarily into a number of track sharing agreements, such as in the Fraser Canyon where
each company has a line on either side of the river, now shared as a double track system.
5.

Capacity constraints and bottlenecks

The efficiency gains from consolidation of US railways were passed on to shippers inpart because of parallel liberalisation of the trucking market that brought the prices of road
haulage down considerably, putting pressure also on rail prices. For much of the period sincederegulation of the railways industry returns have been well below the average for listedcompanies5. That changed in recent years with capacity constraints and strong demand
allowing railways to achieve normal market rates of return on investment. This in turn has
spurred investment in rail capacity.
There is a distinction to be made between this interaction among capacity, revenues andinvestment and the potential for infrastructure bottlenecks to be used to generate elevatedrevenues without investment. Regulatory oversight of infrastructure charges is indicated insuch circumstances, although requiring investment to expand capacity when congestion
charges are levied would not necessarily yield optimal investment levels or optimal levels ofcongestion. There are likely to be cases where investment is not warranted but varying
charges according to demand would improve the efficiency of use of the bottleneck, forexample through responses in the way train operators configure services.
European Union legislation (Directive 2001/14/EC) accounts for this in the way it
regulates infrastructure charges, which are required to be based on direct costs, plus a markup where necessary to meet financial constraints. Scarcity charges are permitted where an
infrastructure manager would not otherwise be able to satisfy demand. In such cases, acapacity enhancement study must be undertaken but there is no requirement to invest. A
cost benefit assessment of alternative approaches to enhancing capacity/satisfying demandis required but the legislation states that there is no obligation to undertake investments thatare not economically or financially viable. With the integrated private railways in the US,
competition normally makes such proactive regulation unnecessary although the rail
regulator has the power to control charges ex post (e.g. by imposing trackage rights) if it
deems necessary.
Economics is based on the idea that there is always a "shortage", that is there is lessthan we would like, of anything good, whether it is rail track capacity, fine wine or clean air. If
there is a bottleneck but no appropriate pricing mechanism, then the market will clear
inefficiently. If the bottleneck is between countries or if an internal bottleneck is mostly aproblem because it reduces international traffic flows the root cause may have mostly to dowith international markets, including strategic behaviour by each country (they need theincreased capacity more than I do -- let them pay for it) or the lack of a good international
funding mechanism. It could also reflect incentives for “exporting taxes” through higher tolls
and tariffs on routes predominantly used by transit traffic.
More broadly, a shadow price approach can be applied to assess whether a bottleneck
merits regulation. This shadow price is the amount that "society" would pay to have theconstraint relaxed or removed, which in turn reflects the degree to which there aresubstitutes, more or less adequate, for the bottleneck capacity. This is similar to the market
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definition exercise commonly applied in competition law. The shadow price cannot be
defined precisely enough to substitute for a market price, however, and only prices formed ina reasonably competitive market provide a reasonable indication of the opportunity cost of
scarce bottleneck capacity. Instead, answering some questions regarding choices available
to customers can provide an indication of the degree to which capacity is constrained at thislocation, i.e. the degree to which it should in fact be considered a bottleneck, although thisprocess will not provide much guidance on appropriate investment levels.
Evaluating the social cost of a "bottleneck" (i.e. a facility of which physical capacity falls
short of demand) would require study of a) what shippers are doing in response to theconstrained rail capacity, and b) what they would do in response to increased capacity. For
example, what are the commodities being shipped on this corridor? Can these commodities
travel by truck (bottleneck has lower shadow price), or do they travel only by rail (bottleneck
has higher shadow price)? Do they simply flow in different directions to different customers
in response to the bottleneck (bottleneck has lower shadow price), or is production
constrained and employment lower because of the reduced transport options (bottleneck has
higher shadow price)? Can the potential customers get very good substitutes from othersources (bottleneck has lower shadow price), or do they suffer without or pay much higher
prices for much inferior substitutes (bottleneck has higher shadow price)? And so on.
These are not necessarily easy questions to answer, and data will not always be easily
available, but they are more relevant questions than assessing if quality is below design
standard, or what percentage of the time a routing is capacity-constrained.
6.

Vertical separation and transaction costs

Ivaldi (2009) underlines the importance of the wheel-rail interface in the costs of runningrailways6 and provides estimates for the increased capital, operating, maintenance andtransaction costs that would be incurred if the US vertically integrated freight railways were
fully vertically separated. The estimates are problematic as they extrapolate differences incosts recorded between different companies well beyond the range of data available, since
all US freight railways are integrated and none separated. Moreover the costs identified may
lie at the extreme end of what is likely in practice as contracts can be designed to include
incentives to minimise transaction costs, for example in the planning of track maintenancepossessions. Regulations can also be designed to provide incentive frameworks to optimise
the wheel-rail interface – such as ensuring track friendly rolling stock is used. It was notedthat even though transaction costs are higher in Britain, with a fully vertically separated,railway, than in Germany where track and train operations remain together under a holding
company, the additional costs arising from separation still only account for at worst 1.25% of
total rail costs (Merket et al., 2008). Thus, the competition that has been created does notappear to have come at the price of excessive additional transaction costs.
There has been a very large increase in rail infrastructure capital, operating andmaintenance costs in Great Britain, particularly since the Hatfield accident in October 2000.
However, factors other than transaction costs between train operators and the infrastructure
manager account for this escalation. Outsourcing of infrastructure maintenance withinadequate monitoring and control by the infrastructure manager appears to have been theroot cause (Smith et al. 2009), compounded by extreme aversion to risk on the part of boththe new infrastructure manager and the regulator in the aftermath of the accident. Other
Summary & Conclusions – Discussion Paper 2009-8 – © OECD/ITF, 200913

countries that have vertically separated infrastructure from train operations, such as Sweden,
have not experienced such an inflation of costs.
Transaction costs are only one aspect of the experience with vertical separation informerly integrated railways. Some analysis of the overall impact of vertical separation on
productivity is available, although somewhat inconclusive. Driessen et al. (2006) observe
some modest increases in efficiency. Friebel et al. (2005) and Wetzel (2008) find that verticalseparation does not seem to be necessary to achieve an increase in productive efficiency.
Cantos et al. (2009) suggest that the processes of vertical separation had modest, positiveeffects on productivity in European railways over the period 1985-2005 (16 railways notincluding the UK). Gains in productivity and efficiency were found to be much higher whenvertical separation was accompanied with reforms at the horizontal level, especially when
new freight train operators enter the market. Growitsch and Wetzel (2009) also findhorizontal market opening to have the strongest influence on efficiency and find in Europethat vertical integration is associated with diseconomies of scale except where measures toopen the market to new train operators have advanced furthest. The research suggests thatany negative impacts on productivity from the vertical unbundling necessary to permit the
introduction of competition in Europe are minor compared to the gains in productivity
achieved where competition has developed.
7.

Setting the framework for competition – policy and regulatory responsibilities

Deregulation in the US and restructuring in the EU had some common and somedifferent objectives. In the US, the need was to remove regulation of prices and service
levels that had stifled commercial flexibility and innovation and resulted in chronic andgrowing losses. The US railways mainly carry freight and were largely privately owned at
deregulation. In the EU, the chronic financial losses and under-funding of investment on themainly passenger networks was the primary problem Community legislation was designed toaddress, together with overcoming the national boundaries of the mainly state owned rail
networks in order to promote the development of international services. For the European
freight market in particular, fragmentation along national boundaries was and to a large
extent still is a major handicap to efficiency. Vertical separation was probably the only
practical way to create competition in the freight market given that passenger trains are theprime user of the networks.
Some of the best performing railways in Europe are in Switzerland, which has two
railways operating parallel competing routes for freight traffic. These two routes, using twoalternative rail tunnels crossing the Swiss Alps, form the basis for two competing alliances offreight train operators on the key European trade route between the industrial north of Italy
and Germany and the North Sea ports. Swiss railways, SBB, owner of one of the tunnels,
began the process of merging its freight operation with the Italian freight incumbent FS. DB
took a stake in the second Swiss tunnel operating company, BLS Cargo AG, and acquired
the Dutch freight incumbent. Although Swiss and Italian railways subsequently de-merged,
SBB Cargo cooperates with a number of independent freight railways in Italy and Germany.
The vision, created for European freight railways by Directive 91/440/EEC andsubsequent policy packages, was for competition between the old national freight railways
and new entrant railways, both running trains across borders. The focus has therefore been
on interoperability and rights of access to infrastructure. A number of new train operators
14

Summary & Conclusions – Discussion Paper 2009-8 – © OECD/ITF, 2009

have emerged, particularly in Germany where several shippers that began by using
specialised wagons to carry their own goods have become significant common carriers. New
entrants also serve North Sea ports and the large Italian freight terminals in Verona and
Milan. In the UK, two main freight companies compete to carry coal and containers. IBM(2007) provides a description of the development of competition in Europe, and Pittman, etal. (2007) provide further detail for Central Europe and Russia.
The emergence of a former national railway acquiring freight operators across Europe
was not part of the vision, but Germany’s DB has expanded rapidly, taking over the main
freight rail operators in the Netherlands, Denmark, Spain and Great Britain, buying Poland’s
largest private rail carrier and seeking to buy freight operators in a number of other countries.
At the same time Russian railways has made clear its interest in taking a large holding in DB.
DB is also vertically integrated with logistics business and road hauliers through DB
Schenker. It owns holdings in German port terminals at Hamburg and on the Rhine, and therail freight business is integrated with rail passenger operations and rail infrastructure
management through the holding company, DB AG.
DB’s mergers have been cleared by national competition regulators and the European
Commission, subject to some minor conditions. While the EC does have powers to review
sequential mergers ex post to determine if competition has been reduced by theaccumulation of assets, this is unlikely to impede the expansion of DB if its acquisitions
continue to integrate by segment rather than taking over a competitor in its home market.
There have been so few cross border rail operations historically that the mergers are unlikely
to reduce international competition, simply because there was very little of it. DB’s acquisitionof EWS (freight) in Britain was subject to the condition that it implement planned investments
by EWS in France to compete with SNCF (DB’s strategic partner for passenger transport).
Potential foreclosure of new competition will be relevant to future merger decisions as aresult of this ruling but competition regulators generally make decisions on the basis ofwhether existing competition is curtailed and do not seek to develop new competition on ahypothetical basis. In both Europe and the US, the blocking of mergers by the competition
authorities on grounds of loss of “potential competition” is rare.
If a model of two or more trans-European railways competing for freight were to be seen
as desirable it would fall to the European Commission’s sectoral regulator, DGTREN and theCouncil of Transport Ministers, to promote its development, rather than to the competition
regulator, DGCompetition. Such a model would depend on Swiss or Austrian railways to be
the hub of a group of railways providing competition on north-south routes, and Frenchrailways to provide competition on routes between the Atlantic and central European
markets. In broad terms, DGTREN’s role is to provide the structural and legal framework tocreate access to rail markets and make competition possible. DGCOMP’s role is to protectcompetition from erosion by mergers and acquisitions under an approach common to all
sectors of the economy.
8.

Infrastructure ownership and pricing in a vertically separated rail system

DBs vertically integrated activities are likely to bring benefits without raising competition
concerns (so long as horizontal acquisitions avoid raising concerns of unwarranted market
power) with one major exception, the integration of the rail infrastructure business with train
operations. With only accounting separation between these businesses it is difficult to
Summary & Conclusions – Discussion Paper 2009-8 – © OECD/ITF, 200915

guarantee absence of discrimination between DB train operations and competitors in the
allocation and pricing of track access and ancillary services. The German competition
regulator has in the past required changes in DB’s infrastructure charging systems to avoid
discrimination but full separation would be a better guarantee of neutrality and of ensuringthat public funding of infrastructure cannot leak into indirect support for other activities (e.g.
making debt available from banks on more favourable terms than it otherwise would be).
That said, non-incumbent block train and incumbent short line freight rail operators accountfor more of the market in Germany (16% in 2006) than in most other European countries,
suggesting barriers to new entrance are higher in some countries that have fully separated
infrastructure from operations (IBM, 2007). It may also reflect profit opportunities in theGerman market rather than favourable conditions on entry.
The most problematic aspect of vertically separated railways is the distance createdbetween the monopolistic infrastructure manager and the market for rail services. The
regulator faces a difficult task in creating appropriate incentives. Where the infrastructure
manager is required to cover a substantial part of its fixed costs and needs to use Ramsey
type price discrimination to lift cost recovery above marginal levels, it is not in a position todifferentiate between shippers and commodities because it does not deal directly withshippers. Vertically integrated railways can make much better use of Ramsey pricing to cover
infrastructure costs.
9.

The risks of regulatory intervention to promote competition

Regulators responsible for setting infrastructure access prices are frequently accused ofallowing too high a rate of return on capital cost. The risks of setting rates too low are,however, higher than setting them too high as investments simply would not be madeundermining quality of service and deterring expansion. This illustrates the risks associatedwith much regulatory intervention to promote competition. It is also a factor in explaining theadvantages of structural remedies over behavioural remedies to prevent potential market
power abuse. To take a recent example, the UK Department for Transport referred prices on
the passenger rail rolling stock market to the Office of Rail Regulation as it believed highprices were reducing consumer welfare. In a report in 2008, the Competition Commission
confirmed prices were excessive but found that the root cause was weaknesses in theprocess for bidding for passenger train operating concessions (franchises) that eliminate
incentives for negotiating rolling stock prices. It recommended that the DfT address the issue
through changes to the franchising process rather than regulating prices as the competition
authorities (the Competition Commission and ORR) were not best placed to deal with thereal problem.
Competition authorities have to strike a difficult balance as there are very few absolutes
in the business environment. They will not always get decisions right. Appeals mechanisms
are important but the length of time it takes to deal with complaints to competition authorities,
in some cases up to 4 years, plus the possibility of decisions going to appeal deterscompanies from taking up competition cases. The costs of bringing a case are high andinvolve disclosure of internal intelligence to those outside the firm (including their opponents).
The data requirements are onerous and the outcome is highly uncertain. There can also berisks of retribution from the company against which proceedings are initiated.

16

Summary & Conclusions – Discussion Paper 2009-8 – © OECD/ITF, 2009

Boards of Directors will avoid bringing a competition case unless they see no otheroption and believe that the future of the company is so threatened that they have no otherchoice. From a corporate strategy perspective, they believe the competition case will betime-consuming relative to other approaches. A much shorter term and more accurate tool isa well-designed advocacy campaign. The court of public opinion can be harnessed by a welltargeted marketing campaign and the opposition can be forced to concede better terms
much more quickly and without opening either firm to government scrutiny. This again gives
structural remedies the advantage in terms of cost effectiveness and perhaps suggests
competition authorities should have a proactive duty to keep markets under review. At thesame time the costs of keeping markets under review are also high and, again, data
demands imposed on companies for monitoring can be very large.
Where competition is created through structural change, wherever possible, competitionin the market is to be preferred to competition for the market. This is because competition forthe market requires costly monitoring of performance and because of the potential for
strategic behaviour in negotiating concessions for the market. Part of the success of the US
and Canadian rail reforms rests on reliance on competition in the market rather than for themarket. There is a parallel with antitrust intervention. When competition authorities find it
necessary to impose conditions on mergers to preserve competition, structural remedies
such as requiring divestment of businesses are to be preferred whenever possible overbehavioural remedies, such as controlling tariffs, because of the costs of monitoring
implementation.
10. Conclusions
A key goal of antitrust policy is to promote economic efficiency (Posner 2001)7. The
efficiencies achieved by businesses that integrate can be offset by wider inefficiencies if
integration eliminates competition. The competitive effects of integration depend on the
structure of the market. This implies a case by case approach needs to be taken toassessing mergers and acquisitions. Few cases of transport markets vulnerable toelimination of competition from such integration were identified at the round table.
The competitive effects of vertical integration depend on the structure of upstream anddownstream markets. In general, vertical integration is only likely to raise competition issues
when there is excessive concentration in one of the horizontal layers of the market.
Railways present a potential for monopoly power through horizontal integration althoughmost mergers in the sector have concerned complementary sections of the market rather
than competing services on both sides of the Atlantic. Consolidation in US railways may havereached the point where further mergers between Class-1 railroads would eliminate
competition in broad markets and these railroads are now required to demonstrate publicbenefits to obtain approval for mergers from the Surface Transportation Board (STB). In
Europe, mergers between freight train operators have so far involved route extension
through international acquisitions. They have not therefore threatened competition in existing(domestic) markets.
Port terminal operations could be vulnerable to accumulation of market power if
significant shares of assets in neighbouring ports are taken over by the same company.
Nevertheless, most markets can be served by multiple routes and the boundary around theSummary & Conclusions – Discussion Paper 2009-8 – © OECD/ITF, 200917

relevant market for testing competition becomes increasingly large as the hinterland reach ofports increases with land side transport investments.
Maritime shipping involves increasingly large fixed costs because the ability to offer
global services carries a premium and requires large fleets of vessels. This implies significant
barriers to entry. Concentration might therefore be able to eliminate competition. However,large shippers have countervailing power through their ability to allocate business among
competitors on specific routes. Globally, large shippers have reduced the number ofcompanies they buy from but have acted to preserve choice route by route. On the main
trade routes, shippers have not had to sacrifice competition among their suppliers in returnfor more global services.
Some shippers are more vulnerable to market power than others as a result of theirlocation or the specific characteristics of the goods they produce. More generally, certain
links in transport systems can be seen as essential facilities, requiring particular attention toprevent potential market power abuse. This concerns in particular rail infrastructure within
ports, when these facilities are owned by a single company and competing rail companies
seek access to terminals in the port. In many cases, cooperative arrangements haveresolved access problems to such essential facilities. US railways have generally reachedvoluntary trackage right agreements. Voluntary arrangements have resolved charging,
capacity and slot allocation problems in the ports of Antwerp and Rotterdam. It is difficult toestablish that facilities really are essential in competition law as it requires proof thatalternative services do not exist or cannot be replicated. In rail markets, competition fromroad haulage is also sometimes a viable substitute under competition rules. Competition
authorities are also generally reluctant to impose rights of access because of the risk ofdeterring investment in such facilities. These hurdles explain the preponderance of voluntaryarrangements for resolving issues of access rather than imposed rights of access at
published tariffs. They suggest also that governments should proactively seek to broker suchvoluntary arrangements at critical points of access to transport networks.
All regulatory intervention bears risks. Competition authorities and regulators do notalways get decisions right. This reinforces the need for a case by case approach tocompetition issues rather than systemic regulation of markets susceptible to market power.
Regulation can also be the source of welfare losses and de-regulation, to create competition,
can be the most significant of reforms. The 1980 Staggers Act, which removed controls onrail tariffs and access rights in the US, is a clear example. Among other things, thistransformed a persistent seasonal shortage of grain wagons at harvest time into seasonal
pricing of wagons and a futures market in grain wagons, eliminating shortages. De-regulation
might similarly improve railway performance elsewhere, in Russia for example.
Antitrust law deals with competition issues arising from changes in the structure ofmarkets as a result of mergers and acquisitions. The existing structure of transport markets
can, however, be a source of inherent inefficiency and this is not amenable to improvementby antitrust authorities. Where governments seek to improve efficiency by introducing
competition through structural change this is the responsibility of transport or industry
ministries, with implementation assigned to sectoral regulators rather than competition
authorities. Where competition is created through structural change, wherever possible,
competition in the market is to be preferred to competition for the market. This is because
competition for the market requires costly monitoring of performance and because of thepotential for strategic behaviour in negotiating concessions for the market. Similarly, when18

Summary & Conclusions – Discussion Paper 2009-8 – © OECD/ITF, 2009

antitrust authorities find it necessary to impose conditions on mergers to preserve
competition, structural remedies such as requiring divestment of businesses are to bepreferred whenever possible over behavioural remedies, such as controlling tariffs, becauseof the costs of monitoring implementation.
The global reach of logistic and transport conglomerates adds an increasinglyinternational dimension to the regulation of competition. The “effects doctrine”, adopted bymost antitrust authorities, makes it possible to address potential problems arising from
integration in any part of global supply chains. According to the doctrine, domestic
competition laws are applicable to foreign firms, and also to the behaviour of domestic firms
outside a state’s territory, whenever their behaviour or transactions produce a relevant"effect" in the domestic market. The potential to impose penalties in their own markets gives
the largest antitrust agencies, in the EU, USA and Japan, sufficient reach to regulate
mergers anywhere in global supply chains. These remedies are probably sufficient toregulate behaviour in international transport and logistics markets.
Price discrimination is present in global maritime shipping and logistics markets andthere is evidence of higher tariffs in some thin markets. However, this appears much more
likely to reflect a need to recover costs through Ramsey type price discrimination rather thanabuse of market power, as the barriers to entry in these parts of the market are notexcessively high.
To sum up, the key competition issue for global logistic businesses and transport
services is access to essential facilities. This concerns rail terminals in particular, especiallyin ports. Voluntary access arrangements are generally indicated for these facilities but publicauthorities can have a key role in brokering agreements. Integration between businesses atdifferent vertical levels in the supply chain risk undermining economic efficiency only when
one of the parties holds monopoly power in one of the levels. The large and expanding sizeof freight gateway hinterlands means that in general they overlap, providing alternative,competing routes to serve shippers and horizontal monopolies are unusual in OECD
countries. Class-1 freight railways in the US may have reached the limits of consolidation inthis respect. In some other countries, structural change and deregulation of tariffs could bring
improvements in efficiency, in the ports and railways of South Africa and Russia for example,
and in Turkey, where the process has already begun.

Notes

1.

Multiple profit margins added by successive companies involved in a chain of
activities to produce a good or service.

2.

This experience is not unique to maritime shipping. As noted by Ivaldi andMcCullough 2005, “mergers have been a dominant aspect of US railroading foralmost the entire 175 year history of the industry”.

3.

Under the supervision of Eddy van de Voorde.

4.

See Fox, 1998.

Summary & Conclusions – Discussion Paper 2009-8 – © OECD/ITF, 2009

19

5.

Although the appropriate benchmark is the performance of companies facing similarrisks to rail businesses and this may be below the average for listed companies.

6.

This makes the regulation of vertically separated railways more complicated than
the regulation of airports and airlines. See also Pittman, 2005.

7.

Posner argues it is the only legitimate goal, suggesting transfers of income can beignored. Others argue that transfers can be large and regressive and are therefore
also a legitimate concern for antitrust policy (Pittman 2007).

20

Summary & Conclusions – Discussion Paper 2009-8 – © OECD/ITF, 2009

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Summary & Conclusions – Discussion Paper 2009-8 – © OECD/ITF, 200923

Round Table on
Integration and Competition between Transport and Logistics Businesses

List of Participants

24

Mr. Russell W. PITTMANUS Department of Justice
WASHINGTON, DC 20530
USA

ChairmanProf. Eddy VAN DE VOORDEUniversity of Antwerp
Faculty of Economics
ANTWERP
Belgium

Co-Rapporteur

Dr. Thierry VANELSLANDER
University of Antwerp
ANTWERP
Belgium

Co-RapporteurProf. Antoine FREMONTINRETS - SPLOTTNOISY LE GRANDFranceRapporteurProf. Marc IVALDI
École des Hautes Études en Sciences Sociales
IDEI
TOULOUSE
FranceRapporteur

Mr. Louis S THOMPSON
Thompson, Galenson & Associates
SARATOGA, CA
USA

Rapporteur

Mr. Simon PILSBURY
Oxera
BRUSSELS
Belgium

Co-Rapporteur

Mr. Andrew MEANEY
Oxera
OXFORD
United Kingdom

Co-Rapporteur

Summary & Conclusions – Discussion Paper 2009-8 – © OECD/ITF, 2009

Prof. Alfred BAIRD
Napier University
EDINBURGH
Scotland
United Kingdom

Dr. Jaromir CEKOTA
UNECEPalais des Nations
GENEVE
Switzerland

Ms Pamela M. BATESPermanent Delegation of the UnitedStates of America to the OECD
PARIS
FranceProf. Hongmin CHEN
Shangai Jiao-Tong University
SHANGAI
Peoples’ Republic of China

Mr. Marco BENACCHIO
Autorita' Garante della Concorrenza e delMercatoROME
Italy
Dr. Jan BLOMME
Antwerp Port Authority
ANTWERP
Belgium
Prof. Alain BONNAFOUS
Laboratoire d'Économie des Transports
(LET)
LYON
FranceProf. Kenneth D. BOYERMichigan State University
EAST LANSING, MI
USA
Prof. Mary BROOKS
Dalhousie University
HALIFAX
Nova Scotia
CanadaProf. Pedro CANTOS SÁNCHEZ
Universidad de Valencia
VALENCIA
Spain
Prof. Pierre CARIOU
World Maritime University
MALMÖ
SwedenProf. Dr. Achim CZERNY
WHU – Otto Beisheim School ofManagement
VALLENDAR‘Germany
Mr. Richard DAVIESAssociation of Train Operating Companies(ATOC)LONDON WC1
United Kingdom
Prof. Claudio FERRARI
Università degli Studi di Genova
GENOVAItaly
Mr. Roberto FERRAVANTEEC
BRUSSELS
Belgium
Mr. Murad GURMERIC
State Planning Organization (SPO)
ANKARA
TurkeyProf. Trevor D. HEAVER
Sauder School of Business
University of British Columbia
VANCOUVER
CanadaMr. Alberto HEIMLER
Scuola Superiore della Pubblica
Amministrazione
ROME
Italy

Summary & Conclusions – Discussion Paper 2009-8 – © OECD/ITF, 200925

Prof. Dr. Christian KIRCHNER
Humboldt Universität zu Berlin
BERLIN
Germany
Mr. João LEMOSMinistry of Public Works, Transport andCommunications
LISBON
PortugalDr. Hendrik WILDEBRAND
ISL - Institute of Shipping Economics andLogistics
BREMEN
Germany
Mr. James WILTSHIRE
Department for Transport
LONDON SW1
United Kingdom
Mr. Serdinç YILMAZ
State Planning Organization (SPO)
T.R. Prime Ministry
ANKARA
TurkeyProf. Christopher NASH
University of Leeds
LEEDS
United Kingdom
Mr. Henry POSNER III
Railroad Development Corporation
PITTSBURGH, Pennsylvania
USA
Dr. Dong-Wook SONG
Heriot-Watt University
EDINBURGH
Scotland
United Kingdom
Mr. John THOMAS
Office of Rail Regulation
LONDON WC2
United Kingdom
Ms. Hisako TSUJI
Economic Research Institute for Northeast
Asia (ERINA)
NIIGATA CITY
Japan
Mr. Mehmet UZUNKAYAState Planning Organization (SPO)
T.R. Prime Ministry
ANKARA
TurkeyDipl.-Kffr. Heike WETZEL
Leuphana University Lueneburg
LUENEBURG
Germany

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Summary & Conclusions – Discussion Paper 2009-8 – © OECD/ITF, 2009