What is Rail Efficiency
and How Can it Be Changed?

23

Discussion Paper 2014 • 23
Louis S. Thompson

Thompson Galenson & Associates,
Saratoga, CA, USA

Heiner Bente

Civity Management Consultants,
Hamburg, Germany

What is Rail Efficiency and
How Can It Be Changed?
Discussion Paper 2014-23
Prepared for the Roundtable:

Efficiency in Railway Operations andInfrastructure Management
18-19 November 2014,
International Energy Agency, Paris, France

Louis S. Thompson
Thompson Galenson & Associates
Saratoga, CA
USA

Heiner Bente
Civity Management Consultants
Hamburg
Germany

December 2014

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WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

Table of Contents

Abstract .................................................................................................................. 4
1. Defining Efficiency in a General Sense .......................................................... 4
2. Indicators Available From Published Data ..................................................... 5
3. Initial Rankings Based on Cross-Sectional Comparisons and Initial
Discussion of Time-Series Data ...................................................................... 7
4. How Can Efficiency Be Changed? ................................................................ 12
5. Did Any of These Changes Work?................................................................ 13
6. Conclusions ................................................................................................... 20
Annex 1 ................................................................................................................ 25
Appendix A .......................................................................................................... 39
Bibliography ........................................................................................................ 41

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WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

Abstract

Assessing railway efficiency is complex for a number of reasons. Railways produce a wide range of
outputs including passenger service, freight service and, in some cases, separated infrastructure accessservices. Railways that differ in scale or in the mix of these services inherently differ in their apparent“efficiency.” Railway data sets, though probably more detailed than in other modes, are fraught withissues of quality, consistency and cost and asset allocation. Assessing “efficiency” necessarily
requires both cross-sectional indices to put each railway into proper context and time series data toshow changes in performance over time in response to changes in the railway’s economic and policy
environment.
This paper assembles a wide database of railway data relating to operating scale and various indices of
performance over the period of 1970 to 2011. We show, as expected, that railways differ widely inscale and mix of services, which may partly explain differences in ranking by performance indices.
We show also that railway performance has changed greatly over time and that, in some cases,changes in performance can at least partly be attributed to reforms in structure, ownership andmanagement incentives.

1. Defining Efficiency in a General Sense

In the abstract, what we mean by “efficiency” or productivity (we will use these terms essentiallyinterchangeably) is maximizing the outputs from a set of inputs or maximizing the ratio of
outputs/outputs. Efficiency is not a standalone concept, however; efficiency is always dependent on acomparative context. We need to know how a given performance compares with others.
Defining and measuring efficiency or productivity in the railway context is a complex problem
because:

Size and scale matter. Large railways and highly dense railways have a potential advantage inefficiency because some parts of railway operations are subject to returns to scale, at least over therange below the very largest systems.



The mix of services matters. Most measures of productivity appear to show that passenger service
is less “productive” than freight. That is, a passenger-km tends to require more resources to
produce than a tonne-km: after all, many countries operate 10 000 tonnes (or greater) unit freighttrains while passenger trains carrying more than 1 000 passengers are rare (see Mumbai commuter
trains, however). Moreover, freight is generally considered to be “commercial” and market-driven
and managers have an opportunity to set reasonably clear management objectives: passenger

4

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WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

services are typically justified by social as well as financial performance, leading to politicalinvolvement and mixed, even contradictory management objectives.


Evaluating railway efficiency therefore requires a number of different types of indices relating toscale, asset productivity (including labor), financial indices (revenue-cost) and economic measuresthat include social costs and social benefits. No single index can ever be dispositive. Instead, we
will need to look at a collection of indices to see which railways tend to fall at the bottom of thepack and which tend to rise to the top.

The complexity of measures makes it important to have two types of indices, cross-section(comparing railway systems at a single point in time) and time series (change over time). Therecan well be reasons for a lower ranking on various cross-sectional indices, especially when somerailways are forced by government to provide large quantities of politically driven regional orcommuter services (whether or not compensated by PSO payments), or where regulation
suppresses tariffs and harms financial performance. Even where a plausible case can be made forlower comparative performance, though, adverse changes over time are harder to explain.

2. Indicators Available From Published Data1

Indicators of efficiency or productivity can be developed at many different levels. The objective of
this paper is to identify indicators that can be developed from publicly available data. We recognizethat some measures would require much more detailed information, such as a comparison of the costsof DB versus Network Rail in maintaining a Km of electrified line with comparable traffic levels.
Unfortunately, information at these detailed levels is either not collected or not reported publicly.2
Appendix A contains a detailed discussion of the sources of data used in this paper. The dataset
developed covers the period 1970 to 2011 (in some cases later) for time series purposes and furnishes
a complete cross-sectional set for 2011. The data set includes all EU railways (separated between the
EU15 and EU10) along with Switzerland and Norway. In addition, for comparison we include China,
the U.S. (Class I freight railways and Amtrak), Canada (freight railways and VIA), Japan and, in somecases, Indian Railways (IR).
The basic indices of size and scale are (see Table 1 for a key to the countries, railways andgroupings employed in this analysis and Table 2 for summary data):

1

Unless otherwise specifically indicated, all data are expressed in metric terms – Tonnes and Kilometres.
Unless otherwise specified, Tonnes means net Tonnes.
2

The International Union of Railways (UIC) sponsored a series of studies of relative efficiency of track
maintenance among a number of railways. Unfortunately, the identity of railways in the dataset was concealed,depriving outside analysts of the ability to put the relative performance of each railway into context. This also
deprived governments of the ability to assess the performance of their own railways and to decide whether the
public was getting value for money. Beck et al., 2012 suffers from the same “confidentiality” restrictions. An
explicit objective of this study is to rely only on data sets that are publicly available.
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5

WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

oPassenger data: Passengers carried3, Passenger-Kms, Gross Tonne-Kms for passenger
trains, Passenger Train-Kms, Coaches, DMUs and EMUs;oFreight data: Tonnes carried, Tonne-Kms moved, Gross Tonne-Kms of freight moved,
Freight Train-Kms and Freight Wagons4;oCommon or joint assets: Locomotives, Labor, Kms of Line;oFinancial and economic performance: Total Operating Cost, Total Operating Revenue,
Passenger Revenue, Freight Revenue.

Ratios of efficiency and productivity developed from the measures above:o

Average trip length for passengers (Passenger-Kms/Passengers), and average length ofhaul for freight (Tonne-Kms/Tonnes). Table 3.

oPassenger share of Traffic Units (TU): Passenger-Kms/(Passenger-Kms + Tonne-Kms).
Table 4.

oPassenger share of Gross Tonne-Kms: (Passenger GT-Km/(Passenger GT-Kms+Freight
GT-Kms). Table 4.

oPassenger share of Train-Kms: Passenger Train-Kms/(Pass. Train-Kms+Frt Train-Kms).
Table 4.

oTraffic density: TU/Line Kms, Gross Tonne-Kms/Line Kms and Train-Kms/Line Kms.
Table 5.

oCoach Productivity: Passenger-Kms/(Coaches+ DMUs+EMUs). Table 6.

oWagon Productivity: Tonne-Kms/Wagon. Table 6oLocomotive Usage: TU/(Locomotives + MU factor)5 Table 6.

oLabor productivity: TU/Employees, Gross Tonne-Kms/Employees and TrainKms/Employees. Table 7.

oOperating Ratio: Operating Cost/Operating Revenue. This is a commonly used measureof financial performance and an indication of the railway’s ability to cover its financial
obligations.6 Table 8.

3

We highlight the fact that there can well be double counting on passengers carried and freight tonnes carried
since the same passenger (or tonne) can cross a railway border and be counted each time. Passenger-km andTonne-km are not subject to double counting. Given that the average trip length of most EU railways is quite
short, this issue may not be as significant for passengers as for freight.
4

Numbers of freight wagons are also affected in countries where there are significant numbers of lessor orshipper owned wagons that do not appear as railway-owned assets. For example, only one-third of U.S. freightwagons are owned by railways.
5

Measuring locomotive productivity is complicated by the presence of DMUs and EMUs that have their own
tractive effort. We attempt to correct for this by calculating effective locomotives by dividing DMU or EMU
numbers by a factor that represents the average length of a DMU or EMU train. We acknowledge that this is atbest an approximation. Of course, on freight-only railways or railways without MUs it is not a problem.
6

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WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

o

Average Revenue per Passenger-Km and per Tonne-Km. These are measures of therailway’s average tariffs and give an indication of the railways cost levels combined withgovernment subsidy policy. These measures show performance from the customer’s pointof view – how much do I have to pay? In addition, they give a good indication of therailway’s charges compared with competing modes. These measures are presented inconstant 2011 Purchasing Power Parity Adjusted (PPP) international dollars. This
involves several revenue conversions: 1) into constant local currency (which requires
conversion from local to Euros in those countries joining the Euro); 2) into USD at 2011
conversion rates; and, 3) into PPP $. Although this chain of conversions clearly
introduces potential errors at every stage, we believe it is interesting because it furnishes ageneral comparison of amounts that users actually pay in various countries and especiallybecause it shows the impact (if any) on railway users of the various reform programs.
Table 9.

oMarket shares for passenger and freight from OECD data of freight and passenger traffic
for all modes since 1970. This is the best available measure of how the railway has
performed in competition with highway, water and air traffic and is a measure of the
impact of reforms on the railway’s competitive position. Table 10.

3. Initial Rankings Based on Cross-Sectional Comparisons andInitial Discussion of Time-Series Data

The data available are far too extensive for a detailed review of every railway. Instead, we can briefly
summarize the highlights of the basic performance indices illustrated in Tables 1-10.


Table 1 provides a listing of all railway entities on which at least partial data have been collected
and show how the Tables distinguish among EU 15, EU 10 (and Croatia), Norway and
Switzerland, and all other railways. It also provides the railway abbreviations that are usedthroughout this paper.



Table 2 shows Employees (Labor Force), Line Kms, Passenger-Kms and Tonne-Kms. There aresome railways, notably China, U.S. Class I freight, Indian Railways and Japanese railways that are
immense industrial undertakings by any measure. SNCF, DB AG, PKP, FS and the UK railsystem appear at the upper end of the ranges as well. By comparison, many of the EU’s smaller
railways are one-one thousandth (or less) of the size of the largest railways. Although there havebeen studies arguing that returns to scale in railways taper off beyond a certain size (and some of
the largest appear to be at or beyond this point), there is little question that many of the smaller
railways will inherently be on the less efficient end of the scale. This has to be considered whenassessing their performance.

6

The Operating Ratio includes depreciation and amortization but excludes payments to acquire and compensate
sources of capital.
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WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

Table 3 shows the average trip distance for passengers and the average length of haul for freight.
Railways with a longer average trip are in a different market segment than those with mostly shorttrips. CR, Amtrak and VIA, for example, operate numerous long-haul trains with sleepers anddiners and, for Amtrak and VIA, are partly in the cruise business and partly compete with air
travel. A critical characteristic of most of the EU railways is their very short average length ofpassenger trips, which means that they operate mostly short intercity trips or commuter services.
At these trip lengths, auto and bus are the main alternatives. Somewhat the same phenomenonshows up even more strongly in freight where U.S. Class I, CR, Canada and IR operate withlengths of haul long enough to fully capture the economic advantages of long haul, heavy loading
freight traffic. By comparison, most of the EU railways are constrained to operate at lengths ofhaul where trucking becomes more competitive. We highlight here that there is a real possibility
that the EU lengths of rail freight haulage (and passengers to a lesser extent) may be distorted toappear lower than actual by double counting of the tonnes handled when traffic crosses national
borders.7 This also highlights the need for better Origin to Destination rail traffic data in addition
to that reported by the individual railways.8



Table 4 shows the role of passenger traffic in the total traffic of each railway, first as a percent ofTraffic Units (the sum of Passenger-Kms plus Tonne-Kms), then as a percent of Gross TonneKms and then as a percent of Train-Kms – three different aspects of rail service. Traffic Units
give a basic picture of the relative markets the railway serves, Gross Tonne-Kms gives at least an
indication of the relative maintenance burden imposed by each type of service, and Train-Kms
gives a rough picture of the relative usage of line capacity, which is the basic limitation on theability of the railway to provide service. By these measures, the EU 15 railways tend to bepassenger dominant, the EU 10 railways less so, Japan is highly passenger dominant, and the U.S.,
Canada and CR are freight dominant. It is also significant to note that the passenger share ofTrain-Km tends to be higher than TU or Gross Tonne-Km, indicating that measures of efficiency
of system use should look at all three measures in order to account for services, wear and tear in
the system and usage of capacity.



Table 5 then looks at measures of line traffic density according to TU/Km, Gross Tonne-Kms/Km
and Train-Kms/Km. It is interesting that CR and U.S. Class I tend to rank higher by the first two
measures whereas the EU railways rank higher by the third. We could say that the U.S. Class I
railways, for example, are more efficient at using their tracks to move volumes of freight, but the
EU railways are more efficient at moving trains carrying passengers. From another viewpoint, we
could argue that the focus in the EU on using line capacity to emphasize Train-Kms may welllimit the ability of the systems to move freight that requires fewer Train-Kms but can interferewith passenger trains because of the speed difference between freight and passenger trains.



Table 6 provides a series of measures of the productivity of rolling stock. The measure for
Coaches is Passenger-Km/coaches including MU Coaches. Wagon productivity is shown as
Tonne-Km/Wagon fleet. Locomotive productivity is TU/Locomotives plus an adjusted number of
MUs to reflect the fact that MUs provide tractive effort. The adjustment factor used divides thenumber of MUs by 6: we recognize this as at best an approximation. In fact, while the Coachmeasure pertains only to passenger service and the wagon measure pertains only to freight, and are

7This could be corrected if railways distinguished between tonnes originated as opposed to total tonnes handled
and tonnes originated off line and terminated off line.
8

A similar problem appeared in the US Carload Waybill Statistics in the early years of waybill reporting because
each railway in a multiple railway shipment could report the same tonnage. This has since been corrected. See
McCullough 2012 for a detailed discussion of the issue.
8

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WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

thus reasonably separable, the locomotive measure necessarily includes both services (except for
railways that provide only freight or only passenger service) since locomotives are often usedinterchangeably. Once again, in terms of locomotive usage intensity, the major freight railways
tend to predominate. IR, CR, SBB and Japan stand well above the rest in Coach productivity.


Table 7 shows output per employee as measured by TU/Employee, Gross Tonne-Kms/Employee
and Train-Kms/Employee. The U.S. Class I and Canadian freight railways stand far above thepack in TU and Gross Tonne-Kms per employee, but are in the middle of the pack for TrainKms/Employee. This reflects the same difference in focus where, in order to reduce labor costs,
the U.S. and Canada run fewer, but long and heavy trains whereas the EU systems run higher
frequencies of shorter trains primarily because passengers place a higher value on service
frequency than do freight shippers.



Table 8 shows the Operating Ratio, which is the ratio of total Operating Costs (excluding costs ofdebt and equity) to total Operating Revenues and is a basic measure of financial performance.
Railways running an Operating Ratio above approximately 85% are much less likely to cover their
total cost and will require increasing outside support as the ratio becomes higher – they arefinancially “inefficient” (though they may be economically efficient if they are rendering a social
service at low cost and with adequate compensation). By definition, an Operating Ratio above
100% means that the railway cannot survive without outside assistance. The critical observation is
how few railways even approach being self-sufficient financially. This may be well within thefiscal boundaries established by governments, but it does ensure that railways are enmeshed in theannual politics of public finance: note, for example, that the U.S. Class I railways are profitable(Operating Ratio of 73.2%) whereas Amtrak (Operating Ratio of 150.2%) is dependent on publicfinance. It is also interesting to see that the Operating Ratios of RHK (900%) and
BV/Trafikverket (250%) reflect the stated policies of the Finnish and Swedish governments tocollect only marginal costs of infrastructure provision from users. By comparison, an estimate of
the Operating Ratio for DB Netz is 86.9%, reflecting the stated goal of the government to collectthe full cost of operations from users. The reported Operating Ratio of RFF (78.7%) is also
surprisingly low, and perhaps explains the complaints of SNCF that access charges were too high.
It will be interesting to see what happens to this ratio when RFF is re-merged with the SNCF
parent company. The Annual Reports of Network Rail stated an Operating Ratio of 64.5%, which
would again reflect a policy of collecting full cost from users. We emphasize, though, that thesemeasures are particularly sensitive to accounting issues and to the transparent accounting (or lackthereof) for public support.



Table 9 shows the most important index of efficiency from the point of the view of the customer –prices charged. In Table 9, we have converted average revenues per Passenger-Km and per
Tonne-Km into 2011 USD at Purchasing Power Parity (PPP). Because this involves conversion ofcurrencies first into constant terms, then into a common currency, and then into PPP terms, it isclearly subject to a range of error. With this acknowledged, it is interesting to see that the average
passenger tariffs of many EU railways are well into the range of low-cost airlines as well as costsof auto operation, which does not bode well for competition except in congested urban
environments. Similarly, many of the EU railways charge average freight tariffs that are roughly
comparable to trucking costs and thus subject to intense competition. Extremely low passenger
tariffs on some railways (IR) reflect a desire to use freight income to pay for passenger losses
caused by politically suppressed passenger fares.



Table 10 shows the market share (percent of Passenger-Km) of rail transport in the passenger
sector in competition with autos and buses. It also shows the rail market share (percent of TonneKm) vis-a-vis the entire surface transport market (trucks, water and pipeline) and then rail market

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WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

share vis-a-vis trucks only. In a direct sense, this is not so much a measure of rail efficiency as it
is a measure of the result of rail efficiency (or lack thereof) in the overall market. An inefficientrailway will perform poorly, an efficient railway has a chance to perform well. We argue that thecompetition of rail versus trucks is probably the best measure of rail’s performance in the transport
markets. As this Table shows, rail plays a very different role in some countries than in others.
For example, rail plays practically no role in U.S. and Canadian intercity passenger transport but ispredominant in Japan.
Because the amount of information to be presented would be too large, we selected a few indicators
and a few countries to display a sample of the time-series information that is available. We show only
the years 1970, 1975, 1980, 1985, 1990, 1995, 2000, and 2005-2011 (interim years are available in theunderlying database). We select France (SNCF), Germany (DB through 1995 and DB AG for 19952011), and the UK (old BR before 1995, ATOC, UK freight and Network Rail afterward): theserailways together account for about 60 percent of all EU 15 railway traffic. We show the Czech
Republic (CD) and Poland (PKP) as these represent about 60 percent of traffic in the EU 10 andbecause the data available are not complicated by changes in corporate structure . We also show the
U.S., Japan and Switzerland (SBB) to represent railway activity outside the EU We use 1980 and1995 as base years: 1980 is a point in the development of the EU when railways began to be affectedby the overall economic changes, and is also the year before deregulation in the US; 1995 is close to
the beginning of the Commission’s attempts to restructure the EU railways.


Table 11 gives an overall picture of how railway traffic has developed over time. Notable fromthis Table is the fact that rail passenger traffic grew faster in the UK than in SNCF and DB,
especially after 1995. UK freight traffic also grew faster. Rail traffic has been shrinking in the
EU 10 and had, at best, stabilized by 2011. Swiss traffic trends essentially mirrored those of the
EU 15, while Japanese passenger and freight traffic were stagnant or slowly shrinking. U.S.
passenger traffic grew slowly while freight traffic grew strongly, especially from the base in 1980.



Table 12 shows the evolution in Operating Ratios and Labor Productivity (using TU/Employee).
There is a mild improvement in Operating Ratio in most countries, with a marked improvement in
U.S. Class I freight railways and in Japan. With this said, it is interesting to note the difference
between the U.S. Class I railways (73%) and Amtrak (150%). Labor productivity improved in all
countries, with the greatest growth rate in the U.S. Class I freight railroads, UK and Japan.



Table 13 shows the side of the railways that the consumer sees – average tariffs. There was anapparent trend upward in average passenger tariffs in every country from 1980 and in all but one(Japan) from 1995. Average freight rates were stable or trending downward in most countries;
but, only in the U.S. Class I railroads do they appear to be well below competitive trucking rates.
We stress again here that the calculation of average rail tariffs is inherently an approximation
because of all of the conversions involved. We do believe that they are usefully indicative both as
to levels and changes over time, but they do need to be viewed with some caution.



Table 14 shows the evolution in market shares in passenger and freight markets. The railpassenger share of the EU 15 railways (~7%) has changed little since 1980 and 1995 whereas therail passenger share in the EU 10 countries has rapidly fallen to EU 15 levels. Rail passenger
traffic has an insignificant share in the U.S. and that has not changed.9 Japanese rail passenger
shares have been stable at a level much higher than the EU, while Swiss rail passenger shares have

9This is to some extent the result of exclusion of the traffic of U.S. commuter railways (which is included in the
EU, Swiss and Japanese results). U.S. commuter railways carry slightly more Passenger-Km than Amtrak, so
the U.S. share would double, but still remain below 1% if auto traffic is included.
10

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WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

grown slightly and are about twice the EU levels. The picture for rail freight is quite different:
EU 15 rail freight shares have fallen since 1980 but have remained stable since 1995. EU 10 rail
freight shares have fallen dramatically since 1980 and 1995, though they may now be stabilizing at
a level slightly above that of the EU 15. Interestingly, the Swiss rail freight market share is muchhigher than in the EU, though it has fallen somewhat since 1980 and 1995. The U.S. rail freightmarket share has stabilized since 1980, though it was falling rapidly before then (it was 78% in
1950 and 67% in 1960).
At this point we can answer the first issue posed in this paper. Yes, there are measures of efficiency or
productivity that can be developed from publicly available data. The measures we have developed dogive an overall picture of the performance of the selected railways both in cross-section (2011) andover time (1970 to 2011). It is possible from these measures to identify the more efficient railways:
China in both freight and passengers, U.S. and Canadian Class I railways in freight, and Japan forpassenger service. Within Europe, SBB seems to measure up quite well while the EU 15 and EU 10
railways present a mixed picture. It would also be possible to use the data developed to assess theefficiency of a specified railway and track its progression over time if that were desired.
With this said, these measures could be greatly improved in the EU by having a regulatory body that
could specify the data to be reported by every railway, verify its accuracy and require its production
annually.10 It is possible that many of the gaps identified in the database could be filled by reference
to Annual Reports or other national documents, but there is no single point of reference for complete
and consistent reports.
In fact, the EU data gaps and consistency problems underline an important challenge in measuring andcomparing railway efficiency – most railways either do not see the need for detailed information forinternal management purposes or do not think it is in their interest to release such information topermit public comparisons to be made. For example, as mentioned earlier the data in “Railway
Efficiency,” (Beck 2012) conceals the identity of the railways in the comparison, significantly
vitiating the use of the results. This has long been the practice of the UIC in making comparisons ofrelative performance of its members. Under what circumstances should public entities, supported bypublic funding, be allowed to conceal information that would facilitate public analysis and evaluationof their performance? This will be a point to consider in the analysis of the interaction among
ownership, structure and performance measurement discussed below. It is also a critical point inassessing whether the Commission’s railway objectives – transparent accounting for infrastructure toensure fair access and financial stability of the infrastructure agency accompanied by separated
accounts for passenger and rail services – can ever be met.
We argue that the information that the Commission would need to ensure implementation of its
Directives with respect to financial transparency of infrastructure, passenger and freight operations
simply does not yet exist, and should be added to the task of a designated authority. In addition, one
important piece of information – where do passengers and freight shipments actually originate andterminate – is not yet available in the EU and awaits collection of passenger ticket and waybill
information. The same issues were described in more detail in “Railway Accounts for Effective
Regulation,” (Thompson 2007).11 The data collected and reported by the U.S. STB, including

10

For railways, this requirement might also be met by encouraging all railway service providers, including
infrastructure entities, to complete the existing data requirements of the UIC.
11

See also “Workshop Report - Measuring Investment in Transport Infrastructure,” ITF, Paris, France, February
9 and 10, 2012, where exactly the same data issues arise.
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WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

“Analysis of Class I Railroads” and “Public Use Carload Waybill Statistics” would be a useful model
for EU agencies to consider.

4. How Can Efficiency Be Changed?

It is all very well and good to define and measure efficiency (however approximately), but the effort
expended in defining, collecting and reporting data will have no payoff if there is nothing that can bedone to change the railways’ performance.12 Fortunately, if railways are willing, and the political will
exists, efficiency can be changed.
One way to change efficiency, much favored by traditional, engineering-dominated railway
managements, is increased investment (increasing capital intensity). One of the arguments in favor of
added investment – making up for deferred maintenance – can well have some justification, although
it sometimes simply reflects neglect of a facility that lost its economic role long ago and should betaken out of service. Where legitimate deferred maintenance needs exist, good management (and good
public policy) will deal with it. Another argument – replacing old with new without regard to payoff –tends to appear when the railway does not face any commercial objectives. In either case, this paper
does not look at increased investment alone, although we acknowledge its role in improving efficiency
when a good financial or economic case can be made, especially when the success of a new structure
depends on a fresh start from years of past investment neglect.
We instead look at various structural or organizational innovations that aimed at changing theunderlying objectives or incentives faced by railway management and use the time series data inoutlining those changes that seemed to have “worked” and those that have not been as successful.
In general terms, we can identify changes in structure, ownership and incentives, though these canbe combined and can work together:

Structural change means movement along the spectrum that begins with monolithic form (allassets owned by the railway and all services provided by the railway). The Ministry of Railways
in China has long been an example of a monolith. China recently separated China Railways (CR)from a newly created Ministry of Railways, so Indian Railways (IR) is the only remaining major
railway that is still fully monolithic. There are railway structures where the dominant operator isin control of infrastructure while other operators are tenants on the infrastructure and pay foraccess (either marginal costs or a negotiated fee). This can include either competing operations in

12Indeed, the experience of the authors suggests that railway management often resists collecting information,and especially reporting it, on the grounds that they can’t do anything with the results anyway. Of course, it
could also be because they are concerned that better information might support efforts to change the rules of thegame they face (or in fact change them). As a rule of thumb, public ownership and management under politicalcontrol seem to be antithetical to collection of transparent information, even where the information is for publicuse. To be fair, private corporations also try to restrict public reporting but, as the STB example demonstrates(ORR in the U.K. is a demonstration of passenger information) these objections can be overcome. Moreover,private corporations are not usually spending public money and, when they are, they are required to report ingreater detail.
12

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WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

the same market (freight trackage rights on a freight operator’s lines, which covers 27% of U.S.
freight lines) or non-competing operators (passenger) on freight lines (Amtrak and VIA) or,
indeed, freight operators on passenger lines (JR Freight). The U.S, Canada and Japan are
examples where the dominant operator controls the infrastructure and tenants pay for access. The
complete form of structural change is full vertical separation, with an infrastructure provider
offering neutral access to all operators in accord with published access charges. The EU
Commission’s Directives have been aimed at creating vertical separation of infrastructure but theprocess has been fragmented, inconsistent across member countries and, in many cases, remain
incomplete.


Ownership change means movement along the range from fully public to fully private. U.S. andCanadian freight railways are now fully private, though the Canadian National (CN) was only
privatized in 1995 and Conrail was privatized in 1987. Amtrak is a publicly owned corporation.
The old Japanese National Railway was broken up (structural change) and the three largest
passenger operators privatized in 1987. Most EU railways remain fully public, but the private
sector is increasingly being allowed to provide some operating services, both in the passenger andfreight markets. The UK was at one time an extreme case of virtually full privatization, but thathas evolved back into a public/private balance.

Changes in incentives (“rules of the game”) include situations in which the management of therailway is given more freedom to operate commercially and is given objectives that include atleast some degree of risk for cost control or net revenue maximization or both. Management
contracting is a starting point, but the process can extend through gross cost or even net costfranchising.13 In the U.S. context, deregulation completely changed the ability of freight railways
to work directly with shippers to set rates and services that met shipper needs without interference
from the regulator.

5. Did Any of These Changes Work?

The reform process in the US actually had three parts: formation of Amtrak in 1972 order to free theprivate freight railroads of the burden of passenger deficits (and, in the minds of some, to freepassenger service from the indifference of freight company management); combining the bankrupt
freight railroads in the mid-west and northeast part of the country into one entity, refinancing andrebuilding it, and subsequently re-privatizing it in 1987; and deregulation in 1980 (the Staggers Act).
As Tables 11 and 12, and Figure 1 show, these reforms were highly successful in stabilizing market
share, lowering rates, increasing traffic and improving essentially all indices of efficiency.14 The
comparison with changes in Amtrak is interesting. Amtrak rates went up (Table 13), service grewslowly (Table 11), and productivity was stagnant (Table 12). Operating Ratios improved for freight
and were stagnant (and high for Amtrak). With this said, the essential purpose of Amtrak – to save thefreight railways that were staggering under the burden of passenger deficits– was achieved.
13

See ECMT 2007 for a discussion of gross cost and net cost franchising.

14

See McCullough 2012 for a detailed discussion of the impact of the Staggers Act on U.S. rail freight tariffs
and on the profitability of the Class I Railroads. Basically, rates went down and profits went up because
productivity increased even more rapidly, especially as a result of contract tariffs.
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WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

Figure 1. US Class I Railroads Operating Ratio (%) and All Commodity Average Revenue/
Ton-Mile (U.S. cents/ton-mile)

Avg. Revenue

Operating Ratio (%)

Source: Analysis of Class I Railroads and U.S. Bureau of Economic Analysis (GDP Deflator).

In Canada, privatization of CN produced a change in relative productivity of CN with CP (always
private), though the shift was not dramatic. In sum, though, Canadian rail freight rates declined
steadily both before and after CN privatization while labor productivity improved rapidly. Operating
Ratios also improved after 1995. Comparing Figure 2 with Figure 1, it is also apparent that the
Canadian experience was at least partly driven by deregulation of the U.S. freight railways, with which
the Canadian railways both compete and cooperate.15 VIA offers the same comparison with theCanadian freight railways as Amtrak does with the Class I U.S. freight railroads: VIA’s laborproductivity is low (Table 7) and is little changed since establishment in 1980. VIA’s Operating Ratio(185.5 – see Table 8) is high although its average tariffs are well below Amtrak and are about at the
EU average, but for a very different traffic mix (see Table 3, where VIA has the third longest average
length of trip, reflecting the importance of long-haul trains).

15

A recent OECD report (ITF 2014) showed that changes in the structure and ownership of the Mexican
railways had a similar effect.
14

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WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

Figure 2. Canadian Freight Railways(Tariff index and Labor Productivity Index 1995=100)

Tariff and Labor Index

Operating Ratio

Source: Railway Association of Canada.

In brief, the Japanese reforms involved breaking up the old monolithic Japanese National Railways(JNR) into 6 new passenger companies and a freight company that operates much like a “freight
Amtrak” – it pays access charges and uses the narrow gauge lines of the passenger companies (thehigh-speed lines – Shinkansen – are standard gauge and are not used for freight). The three large
passenger companies (JR East, JR West and JR Central) were subsequently privatized by sale of theirstock. An explicit goal of the reform was to break the control of the unions over the politicallyoriented management. As Figure 3 shows, the reforms were highly successful in improving laborproductivity and the Operating Ratio for the system.16 This was accomplished while tariffs were held
stable (Table 13) and total traffic actually remained almost the same over the last 20 years.
Performance of JR Freight is harder to pinpoint. What is clear is that traffic has declined while tariffs
have been held stable, roughly at EU levels. In perspective though, JR Freight has faced a problem
similar to that of Amtrak: as the traffic of the dominant operator has grown there is less room for thetenant. This has caused Amtrak’s on-time performance to plummet and has restricted JR Freight’s
ability to handle its traffic. It is probably a risk inherent to dominant/tenant schemes (or, arguably,
where some operators have closer linkage to infrastructure management than other operators).

16

The Operating Ratios shown are actually for the entire system, and are lowered by the performance of thethree smaller railways and the freight company (JR Freight). The Operating Ratio for the three larger companies
by themselves would be more favorable.
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WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

Figure 3. Changes at JNR at Privatization[Operating Ratio (%) and Labor Productivity`]

Output/Employee
2500

2000

Operating Ratio
180
Breakup andPrivatization(1987)

Labor (000TU/Empl)

160
140
120

1500

100
80

1000

60

40

500

20
0
1960

0
1970

1980

1990

2000

2010

Source: Author's analysis and UIC Railway Time Series, 1970-2000.

Experience in the EU is much more complex to assess. In overall terms the Rail Liberalization studies
by Kirchner17 suggest that the Commission’s structural reforms have gradually been implemented,
though the degree differs among members as Table 15 shows. Although the indices are arguable on anumber of grounds and are, in any case, only partly objective, Kirchner argued that the market is now
more liberal and that the degree of competition has increased.
Table 15 does indicate that the Liberalization Index as computed by Kirchner had improved over thetime period (2002, 2004, 2007 and 2011) studies. This appears to have been much more applicable tofreight service than passengers, probably because the interaction between public support and passenger
service is stronger than in freight. Governments find it hard to allow competition for their supported
services, though this has changed in some countries.
It is also significant that Kirchner divided his index into three parts: LEX (legal change); ACCESS(whether the infrastructure agency actually allowed access to take place in accord with the new laws);
and COM (a measure of the actual degree of competition that had emerged. Looking at the COM
index on Table 15, even by 2011 there was only one country (UK) that had an “advanced” COM
index, and only four (Germany, Netherlands, Denmark and Estonia) that were considered “onschedule.” It is also interesting that DB AG owns the major freight carrier in Germany, NL and DK(and in the UK), so the apparent degree of freight competition in these countries may be less than
17

Kirchner 2011, but also 2002, 2004 and 2007.

16

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WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

indicated. Estonia essentially exchanges traffic only with Russia (Its Baltic connections are either“delayed” of “pending departure”), so competition would be of limited value.
The relatively slow development of intra-rail competition combined with the slower pace ofliberalization in the passenger sector should alert us to have lower expectations for the impacts of the
EU reforms, especially in countries slower to adopt the reforms. This effect can be multiplied by thefact that a country might well be aggressive in its reforms only to see the impact muted by slow
change in countries to which it connects.
This overall picture of a slow pace of reform in the EU railways developed by Kirchner is supportedby the results in Tables 11 and 14. The EU 15 railways do not demonstrate a particularly dynamic
performance either measured by freight or passenger traffic growth or by market share. We
acknowledge that the outcome could have (we argue would have) been worse without reform, but it is
not possible to argue that the reforms have had (to date, at least) anything like the positive impact of
the reforms in the U.S., Canada and Japan. It is also possible to argue (as the Kirchner indicessuggest) that the restructuring reforms have not actually been implemented yet to the degree necessary
to have an impact on efficiency.
The picture for the EU 10 railways (and Croatia) is even harder to assess, partly because they are more
recent members and, more important, because they were subjected to the wrenching transition from
central planning to market structure, which would have had a devastating impact on both passenger
and freight traffic no matter what changes in structure had occurred. With this said, it is at least
interesting to point out that new, private freight operating companies are already carrying nearly 25
percent of freight traffic in Bulgaria and are carrying about 50 percent of the freight traffic in
Romania. Clearly this would not have happened without vertical separation. It will be interesting tosee if these companies eventually operate at higher levels of productivity and efficiency.
It is difficult to use the efficiency indices to draw any dispositive conclusions about the performanceof DB AG and SNCF. They are both in the upper middle of the pack in size and outputs. Despite theemphasis on developing HSR services, SNCF has an average passenger trip of only 79 Km, while DB
AG is even shorter at 40 Km, suggesting that the efficiency of both is heavily influenced by the
economics of short haul passenger service. Well over 70 percent of SNCF’s traffic output is passenger
service while DB AG’s passenger service ratio is in the high 40 percent range. In operations, though,89 percent of SNCF’s train-km are passengers and as are 75 percent of DB’s operations: both railways
are clearly using most of their capacity for passenger service, and (as with the U.S. and Japanesecases) when one service dominates, the others suffer for lack of priority access to capacity. Both arein the middle of the pack as to line traffic density, with DB AG slightly above SNCF. SNCF appears
to make somewhat better use of its rolling stock fleet, though neither is at the top of the productivity
rankings. However measured, the labor productivity of SNCF is lower than DB AG, although the
productivity measures for both SNCF and DB AG (especially) are probably reduced by the inclusionof non-rail employees in the totals.18 SNCF reports a better Operating Ratio than DB AG in 2011, but
this would not have been true in most of the earlier years reported. DB’s average passenger fare isabout 30 percent higher than SNCF, but its average freight tariff is about 10 percent lower than SNCF.
SNCF’s market share is higher than DB AG for passengers but lower for freight. SNCF’s passenger
traffic has grown slightly faster than DB AG’s, but SNCF’s performance in the freight market has
been very poor, worse than DB AG and actually worse than the EU 10 countries. DB AG’s
improvement in labor productivity has been significantly better than SNCF, but neither did as well in
18

SNCF would be raised by about 25 percent and DB nearly doubled if non-rail employees are excluded fromthe productivity measures. Unfortunately, though the data exist to do this separation in later years, theinformation is not available for earlier years.
Louis S. Thompson and Heiner Bente — Discussion Paper 2014-23 — © OECD/ITF 201417

WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

this index as any of the other railways listed in Table 12 (except Amtrak). Passenger tariffs on both
SNCF and DB AG are higher than in 1990, by 50 percent for SNCF and 34 percent for DB AG. By
comparison, both saw a significant reduction in freight tariffs since 1990.
It has been shown that vertical separation adds some costs of coordination and reporting as well asinternal accounting and negotiation, although the exact degree of the added costs is around 5 percent
or so.19 The counter question -- have these costs produced offsetting benefits, for example throughadded competition that reduces tariffs (as it did in the U.S.) certainly has an apparent answer: no forpassengers and mixed for freight. Essentially every EU 15 and EU 10 railway has the same or higher
passenger tariffs as in 2000 or 1995. There is no discernable pattern in average freight tariffs, withsome higher and some lower in 2011 than in 1995 or 2000.
The UK presents a significantly different picture. Although we defer to the paper by Nash and Smith
to survey the UK case in more detail, Figures 4 and 5 give a useful picture in comparison with otherEU experience. As shown in Figure 4, both passenger service and freight service reacted strongly tothe restructuring, with passenger service reaching levels not seen since the end of World War II. In
fact, as Table 11 shows, passenger service in the UK grew faster since the restructuring in 1995 thaneither SNCF or DB AG, and far faster than the EU 15 average. The same is true for freight in the UK
The UK’s rail market shares for both passenger and freight increased faster than the EU 15 average
while the average passenger tariff has been nearly stable in constant terms.
There has been spirited debate in the economics academic community as to whether the positive UK
rail results have been due to privatization or to restructuring or were primarily driven by strong GDP
growth. This is an argument that cannot be resolved, but Figure 5 clearly shows that something
positive happened upon reform: it would be very difficult to attribute all of the change to growth in theeconomy.

19

See, e.g., Nash (2013), at pp. 6 and 7.

18

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WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

Figure 4. Rail Traffic in the UK(000,000 passenger-km and ton-km)

60000
50000
40000
30000
20000

UK BR Passenger
UK TOCs

10000

UK BR FreightUK Freight Operators

0
1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Source: SRA 2002c and SRA, 2003a, WDI, UIC, ORR.

Figure 5. UK Passenger-Km, Ton-Km and GDP(Index, 1994=100, GDP index constant £1994-1995)

200

Passenger-Km

180

Ton-Km160

GDP (1994/1995)

140
120
100
80
60
40
1963

1973

1983

1993

2003

Source: SRA and UK Treasury website.

Louis S. Thompson and Heiner Bente — Discussion Paper 2014-23 — © OECD/ITF 2014

19

WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

6. Conclusions

No simple attempt to measure railway system efficiency can be expected to provide meaningful
answers, both because the ambiguity and inherent challenge in defining what is meant by the term
"efficiency" and because the structural complexity of rail organizations and the heterogeneity ofrailway services and offerings limits the value of any single index. Differing perceptions and purposes
for attempts to measure "efficiency" will therefore require appropriate, tailored approaches
Among the various purposes for measuring "efficiency," the following need to be distinguished inparticular:

A government's interest to determine or monitor the overall performance of its railway system,e.g. with respect to value-for-money, modal competitiveness, operational cost-efficiency or
financial viability;

A government's policy analysis to define and review the success of railway restructuring or
market organization initiatives;

An audit of railway management performance (be it in a domestic or an international context);An inter-governmental policy evaluation and benchmarking effort

There are fundamental practical issues about "efficiency" measurement that need to be resolved before
more high-level conceptual questions can effectively be addressed, including:20

Robust, internationally comparable reporting standards do not exist (note, while mandatory
standards apply in the U.S. and Canada, Europe has nothing close to a homogeneous format.
On a global scale, the UIC has the "best available" database, which could nevertheless be
improved. In fact, though, the UIC’s data may be at risk of losing quality and coverage;

Transparency - Railways frequently resist reporting data to "their" governments, even when(and this appears to be the "default option" in Europe) substantial amounts of taxpayers'
money is deployed to fund infrastructure and "public-service obligations"

Off-Balance Sheet Items - Subsidies paid to railway systems are in many cases very
substantial, but are not clearly reported. They typically come through one, or a combinationof, infrastructure investment grants, passenger tariff surrogates and operations support andalso special purpose vehicles for "legacy staff" obligations. Such items are often not included
in railway balance-sheets and official reports, and these off-balance sheet items can have astrongly distorting effect on financial "efficiency" measurements



Last but not least, definitions of parameters, be they rather of technical/operational, service
performance or financial nature, often lack clarity and uniformity, which is a prerequisite forvalid international comparisonsLouis S. Thompson and Heiner Bente — Discussion Paper 2014-23— © OECD/ITF 2014

WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

As a consequence, and to the frustration of many industry observers, cross-sectional measurements ofrailway "efficiency" are often more subject to distortion and misunderstandings than meets the eye inthe first place. This fact imposes a significant caveat on any interpretation of face-value comparative
measurements. With this is mind, time-series evaluations can strongly buttress comparisons of how
individual railways have developed over time and provide far greater reliability for interpretation.
Even so, discontinuities in reporting or the organizational set-up of railways over time can also be asource of ambiguity (albeit less critical than in the case of cross-sectional comparisons)From a "good public corporate governance" perspective, full reporting including "shadow assets" andfinancial flows to special purpose vehicles should be the norm. This is essential to give fullaccountability to the public on the deployment of funds and to inform policy makers responsibly.
Acknowledgment of the above mentioned limitations in data availability, quality and meaning leads toa cautious note on the use of econometric models to describe railway efficiency, for a number ofreasons:Inconsistency of input data, including unclear definitions;Structural scarcity of data ("no big data") due to small and unstable samples of observed /observable railways systems, with inevitably inadequate sample sizes for statisticalevaluations;

An inability of econometric models to discriminate between "good" or "poor" corporate
governance and management, which in practice can have an overriding impact on actual
railway "efficiency";

Most railway systems in the world show signs of protracted under-investment, especially ininfrastructure, because "pro-forma" statements of steady-state investment requirements (i.e.
future cash flows to be set aside) are rarely reported accurately. As a result, such backlogs gooften undetected, leading to a real risk of a mis-assessment of the condition of infrastructure orother long-lived assets.

Qualified and informed judgment is always required in conjunction with even the best available andmost sophisticated supporting "efficiency" measurement analyses. As a high level common
denominator (an entry point) to measuring railway "efficiency," a balanced scorecard approach should
be used that allows for some standardization and is broad enough to cover different aspects andmeasuring purposes in a 360 degree manner. A "Balanced Railway Efficiency Scorecard" (BRESC)
should at least contain the following elements on a first-tier level (each and all open for greater indepth analysis):







Scope of the railway system;
Asset utilization of infrastructure and fleet;
Human resource deployment;
Operational Performance;
Financials;
Customer Centric Performance (i.e. performance in the market).

Railways are very asset intensive systems and economic analysis shows that under real-life conditions,asset utilization, which is highly disparate for different systems around the world has an major impact
on overall system profitability or "efficiency". To a very large extent, asset utilization is a result ofLouis S. Thompson and Heiner Bente — Discussion Paper 2014-23 — © OECD/ITF 201421

WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

historically developed networks with vastly different traffic density coupled with above-rail operations
that are more or less focused on sufficiently high demand services (where “demand” can have both apolitical as well as a market dimension). It is immediately and demonstrably clear that such disparate"operating conditions" affect railways' economics by orders of magnitude, asset utilization is therefore
a structural determinant for a system's (in)ability to make profits or losses.
No other single factor is more important for economic railway "efficiency" than asset utilization.
Hence, from an "efficiency" measurement purpose standpoint it is vitally important to separate theimpact of those parameters that are primarily imposed by governments and other political stakeholders
from those that are a good "proxy" for the performance of railway management.
A good and highly aggregate "efficiency" measurement from an overall perspective is railway market
share ("modal share"); however, in cases where public subsidies are applied to provide services (thenorm in Europe), subsidies can literally "buy” market share: thus, market share and system funding
provisions need to be understood in close connection. As a direct result, "efficiency" measurements ofa railway system may not suffice to describe the performance of railway management due to theoverriding impact of economic "legacy factors" -- parameters, such as politics, which are exogenous torailway management.
Good proxies for direct management performance are the normalized full cost per train-kilometer inabove-rail operations and the normalized full cost of maintaining and operating a unit piece of network
infrastructure (e.g. a kilometer of line or a kilometer of track) in infrastructure management
organizations. Various other dedicated or sometimes more global analyses exist to measuremanagement performance in infrastructure and above rail operations, many of them in confidential oranonymous form, but it is not always clear that proper distinctions between what management can
influence and what is given by "system legacy" are made. More work is needed if the effort tomeasure railway "efficiency" is to be promoted further.
Last but not least, almost all of the global railway "efficiency" measuring work is devoted totechnical/operational and financial aspects and the customer perspective (which one could arguably
consider the ultimate measure of "efficiency") appears to be a neglected area. Market-level questions
to be analyzed are for instance, "how efficient is the travel or shipment solution offered by a railway inthe eyes of the passenger or the shipper?" or "how competitive is the price of using a railway service
as compared to other modes?" From a government perspective this also means to address aspects ofpublic welfare.
There is reason to assume that the customer perspective has been neglected so far, because it poses achallenge to describe and measure; however this should not be an excuse, not to attempt it (note thatemerging "big-data" applications may represent breakthrough opportunities to capture customercentric information)
Looking at the data and indices, per se, it is clear that the policy and structural changes in U.S.,
Canada and Japan worked in almost all dimensions and one can strongly argue that the changes would
not have occurred absent the reforms.
It is far beyond the scope of this paper to review all of the EU railways individually. The experience inthe EU is much more complex because most services at base are social rather than commercial,legitimately increasing the role of government, and there is no good annual reporting on the value of

22

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WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

social benefits and costs generated by the railways.20 The result was a much less clear definition of
objectives and incentives along with unstable, often inadequate financial support reflecting thevicissitudes of annual public budgeting. Attempts to change the situation were impeded by politicalresistance from unions and other interest groups and, in many cases, a complete lack of transparencyof the actual performance (“efficiency”) of the railway that made scrutiny by the public, including theacademic sector, impossible. We also have to deal with the null hypothesis – what would have
happened without reform -- though SNCF performance may give an indication. It is also possible toargue that DB AG has resisted the actual implementation of most of the significant aspects of the EU’s
reform objectives, at least with respect to railway structure in Germany.
It seems clear that the UK government overshot its target by smashing the old BR and privatizing itcompletely at the outset: but, gradual reform since 1995 has produced a system that certainly seems
better than the old BR. In France, the attempts to reform (without actually doing so) have clearly not
been very productive. RFF never fully emerged from SNCF control, and recombining them into a newagency will mostly have the effect of turning back the clockl. The DBAG holding company approachproduced a conflict of interest between DB Netz and the operators vis a vis potential entrants, aconflict that will remain until DB Netz is truly separated.

20This information could be added to other reporting requirements, at least in a prescribed, approximate form.

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WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

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WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

Annex 1TABLESLouis S. Thompson and Heiner Bente — Discussion Paper 2014-23 — © OECD/ITF 201425

WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

Table 1. Sample KeyCountry

Railway name anddate of inception

Country

EU 15
Austria
Belgium
Denmark
FinlandFranceDB Germany
DR Germany
Germany
GreeceIreland
Italy
Luxembourg
Netherlands
Portugal

Spain

SwedenUnitedKingdom

GKBÖBB
SNCB/NMBSDSBBDK (1997)
VR
RHK/FTA (1995)
SNCF
RFF (1997)
VeoliaPrior to reunification
Prior to reunification
DBAG (1994)
OSE
CIE
FNM
FS
CFL
CFL Cargo (2007)
NS
Pro Rail (1998)
CPCP Carga
REFER (1997)
RENFE
ADIF (2005)
Euskotren
FEVE
FGC
SJ
Green Cargo (2002))
BV/Trafikverket (1988)
BR
ATOC (1995)
Freight (1995)
Railtrack/NR (1995)
NIR

Railway name anddate of inception

EU 10 + Croatia

Bulgaria

Czech Republic
Slovakia
Former Czech.
Estonia

Hungary

LatviaLithuania
PolandRomania

Slovenia
CroatiaBDZ
BDZP
BDZ Cargo
NRIC (2003)
BRC
Bulmarket
CD (2003)
SZDC (2003)
ZSSK
ZSSK CargoZSR (2002)
CSD (End 1992)
EVR
Floyd
Gysev
MAV
MAV Cargo (2006)
MAV Start (2007)
LDZ
LG
PKP
CFR
CFR Calatori (2006)
CFR MARFA (2006)
CFR SA (2006)
GFR
Servtrans
TFG
UnifertransSZ
HZ

Other Railways
United States
Canada
China
Japan
India

Class I
Amtrak (1972)
Freight
VIA (1980)
CR
All
IR

Norway and Switzerland
NorwaySwitzerland

26

NSB
Cargonet (2002)
JBV (1996)
BLS
BLS Cargo
SBB/CFF/FFSLouis S. Thompson and Heiner Bente — Discussion Paper 2014-23— © OECD/ITF 2014

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Louis S. Thompson and Heiner Bente — Discussion Paper 2014-23 — © OECD/ITF 201427

WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

Table 3. Average Length of Haul (Km) (2011 data)
EU15

Railway

CH/NO

EU10

Passenger

RailwayCR

529

US Class I

Amtrak355

Canada Frt

VIA

331

CR

LDZ

250

IR

SJ

205

Japan

IR

128

CFR SACFR Calatori

90

RENFE

OSE

87

GFR

PKP

85

SNCF

LG

84

Green Cargo

SNCF

79

BRC

FS

75

DBAG

BDZ

71

LG

VR

57

LDZ

NS

54

FS

ZSSK

53

VR

NSB

52

PKP

EVR

51

Bulmarket

MAV Start

50

DSB

ÖBB

49

BLS Cargo

SZ

49

Unifertrans

SBB/CFF/FFS

49

CP Carga

SNCB/NMBS

47

Freight

DSB

46

SZ

RENFE

46

BDZ

CIE

44

Servtrans

Gysev

41

HZ

DBAG

40

EVR

CD

40

MAV Cargo

ATOC

39

ÖBB

HZ

30

ZSSK Cargo

CP

30

Floyd

Japan

28

CD

FEVE

21

CFR MARFA

CFL

19

CIE

BLS

17

SBB/CFF/FFS

Euskotren

11

OSE

FGC

10

FEVE

Source: See Appendix A.

Gysev
SNCB/NMBSFGC
CFL Cargo28

All Other

Freight
1 477
1 199
805
679
654
483
437
392
371
353
324
318
288
279
276
270
265
259
240
237
237
226
222
220
215
207
207
200
200
199
194
190
182
181
172
163
147
142
141
138
63
32

Louis S. Thompson and Heiner Bente — Discussion Paper 2014-23— © OECD/ITF 2014

WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

EU15

ZSSK
MAV Start
AmtrakVIA
NSB
Euskotren
FGC
CIE
Japan
DSB
SNCF
FS
NS
ATOC
RENFE
OSE
SBB/CFF/FFS
SNCB/NMBS
CP
CFL
IR
BLS
DBAG
BDZ
ÖBB
HZ
CD
FEVE
PKP
VR
CFR Calatori
CR
SJ
Gysev
SZ
EVR
LG
LDZ
US Class I

Table 4Passenger Shares (%) Measured by
EU10
CH/NO
All Other% of TU
100
100
100
100
100
100
94
94
92
85
79
77
77
74
74
72
69
66
64
64
61
44
41
39
38
38
35
32
30
29
28
24
21
21
18
5
3
1
1

CIE
FNM
NS
NIR
ZSSK
MAV Start
VIA
NSB
Euskotren
FGC
Japan
SNCF
RENFE
SNCB/NMBSCPSBB/CFF/FFS
CFL
FEVE
BDZ
SJ
CD
Gysev
DBAG
HZ
IR
VR
CFR Calatori
ATOC
ÖBB
BLS
PKP
SZ
CR
LG
EVR
LDZ
Canada Frt

% of
Gross
TonneKm
100
100
100
100
100
100
100
100
98
93
81
73
70
67
62
61
59
49
46
46
43
42
42
35
35
35
34
33
32
31
24
19
17
4
4
1
1

% of
Train-Km
DSB

100

NS

100

ZSSK

100

MAV Start

100

Amtrak

100

VIA

100

Euskotren

100

FGC

98

CIE

98

Japan

92

SNCB/NMBS

89

CFL

89

SNCF

89

RENFE

88

FEVE

88

FS

88

OSE

87

SBB/CFF/FFS

83

CP

82

CD

82

BDZ

75

HZ

75

DBAG

75

CFR Calatori

74

Gysev

74

BLS

73

VR

70

PKP

69

ÖBB

69

IR

64

SZ

60

CR

44

EVR

38

LG

36

Servtrans

15

US Class I

7

LDZ

6

Source: See Appendix A

Louis S. Thompson and Heiner Bente — Discussion Paper 2014-23 — © OECD/ITF 2014

29

WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

Table 5
Measures of Line Traffic Density (2011 data)
EU15

CR
IR
US Class I
Japan
LDZ
LG
SBB/CFF/FFSNSCanada Frt
EVR
DBAG
ÖBB
DSB
UK
SNCB/NMBS
SNCF
SZ
FNM
Gysev
FGC
FS
PKP
ZSSK
VR
CP
RENFE
BLS
CFL
CD
MAV
CFR
HZ
BDZ
Euskotren
CIE
OSE
FEVE
Amtrak
VIA

EU10

TU/Km
(000)
51 15524 88716 55313 207
8 924
8 759
8 162
7 556
7 185
6 620
5 646
5 634
5 588
4 918
4 569
3 692
3 604
3 459
3 433
3 222
3 044
2 683
2 677
2 234
2 081
2 077
2 012
1 996
1 981
1 836
1 616
1 442
1 316
1 235
908
710
479
279
101

CH/NO

CR
US Class I
IR
SBB/CFF/FFS
EVR
LG
LDZ
Japan
ÖBB
Canada Frt
DBAGNS
SNCB/NMBS
CFL
BLS
SNCF
Gysev
SZ
ZSSK
FNM
FGC
PKP
VR
CD
RENFE
UK
CP
CFR
MAV
Euskotren
HZ
BDZ
FS
CIE
FEVE
AmtrakOSE
JBV
VIA

All Other

Gross TKm/Km(000)
72 23829 58524 35624 34217 24916 36515 51013 85313 74912 93011 703
11 49910 900
8 844
6 977
6 970
6 810
6 699
5 832
5 346
5 293
5 289
4 937
4 784
4 545
3 996
3 761
3 495
3 374
3 133
2 868
2 289
1 495
1 407
1 102
1 047
1 026
849
321

SBB/CFF/FFS
NS
FGC
Japan
BLS
CFL
UK
CR
FNM
ÖBB
DSB
DBAG
SNCB/NMBS
Euskotren
Gysev
FS
SZ
SNCF
CD
IR
RENFE
MAV
CP
ZSSK
HZ
CIE
LG
PKP
VR
EVR
FEVE
OSE
BDZ
CFR
LDZ
US Class I
AmtrakVIA
Canada Frt

TrainKm/Km
45 66339 36938 00737 35537 07232 72432 63130 81728 34628 21227 80925 77224 42723 36718 82416 47416 44315 65915 59814 62913 087
12 57412 554
11 591
9 102
9 051
8 671
8 645
8 592
8 415
8 270
8 208
7 737
7 578
5 293
4 491
1 629
785
204

Source: See Appendix A

30

Louis S. Thompson and Heiner Bente — Discussion Paper 2014-23— © OECD/ITF 2014

WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

EU15

Table 6
Measures of Productivity of Rolling Stock (2011 data)
EU10
CH/NO
All Other

PassengerKm/Coach +MUs
IR
223 404
CR
60 049SBB/CFF/FFS
47 132
Japan
44 820SJ
35 450CFR Calatori
20 227DSB
18 434BDZ
14 563FS
14 399SNCF
14 170HZ
13 759VR
11 155Gysev
11 111
Amtrak
8 777
CP
8 601
ÖBB
7 768
PKP
7 301
SNCB/NMBS
7 251
LG
6 707
ZSSK
6 557
MAV Start
6 277
OSE
5 078
CFL
4 847
CD
4 570
EVR
4 500
FGC
3 873
BLS
3 794
DBAG
3 778
NS
3 560
ATOC
2 677
CIE
2 452
FNM
2 444
NSB
2 245
VIA
1 720
SZ
1 528
Euskotren
1 125
LDZ
420
Railway

Railway

Gysev
Canada Frt *CRGreen Cargo
IR
LDZ
Japan
BRC
US Class I
GFR
EVR
LG
SNCF
SZ
DBAG
ÖBB
SBB/CFF/FFSVR
MAV Cargo
CP Carga
Unifertrans
RENFE
PKP
Bulmarket
BDZ
SNCB/NMBS
Servtrans
CD
FS
HZ
FEVE
FGC
CIE
CFR MARFAOSE
CFL Cargo
Euskotren

TonneKm/Wagon
8 424
5 429
3 983
3 429
3 276
2 702
2 328
2 207
2 005
1 848
1 677
1 634
1 144
1 141
1 049
958
925
907
727
651
635
613
571
542
514
500
485
444
405
402
340
239
209
167
158
51
3

TU/Locomotive+ adjusted
Mus*IR
178 950CR
172 449Japan
159 473
Canada Frt
134 780
SJ
104 038
US Class I
102 161DSB
83 231LDZ
82 347
Green Cargo
76 190
MAV Start
75 489EVR
69 907LG
58 294RENFE
56 566
NS
55 942
CP Carga
46 909NSB
40 146FGC
29 326
ATOC
28 975SNCF
28 931DBAG
27 558VR
26 741BRC
25 808
SNCB/NMBS
25 438Floyd
24 300SZ
23 962BLS Cargo
22 080CP
21 887Gysev
21 429GFR
21 167
ÖBB
20 711FS
18 742CIE
18 220SBB/CFF/FFS
17 791PKP
16 133HZ
15 812
Unifertrans12 067FNM
11 640FEVE
10 774BDZ
10 666CD
10 451ZSSK Cargo
10 353
ZSSK
9 923
OSE
9 262
VIA
9 229
CFL
9 184
Euskotren
9 152
Bulmarket
8 786
CFR MARFA
7 671
BLS
7 588
CFR Calatori
5 762
CFL Cargo
3 448
Railway* Canada's apparent high productivity may be due to exclusion of non-railway owned wagons.
Source: See Appendix A

Louis S. Thompson and Heiner Bente — Discussion Paper 2014-23 — © OECD/ITF 201431

WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

Table 7
Indicators of Output per Employee (2011 data)
EU15

EU10

TU/
Employee(000)
US Class I
15 927
Canada Frt
11 245
Green Cargo
7 500
Floyd
3 857
CP Carga
3 104
EVR
2 919
NS
2 850
BRC
2 652
SJ
2 101
Japan
2 079
RENFE
2 075
GFR
1 846
CR
1 647
Bulmarket
1 538
VR
1 481
LG
1 473
DSB
1 472
LDZ
1 426
DBAG **
1 378
Unifertrans
1 341
IR
1 208
CP
1 197
ATOC
1 164
Servtrans
986
SBB/CFF/FFS
868
ZSSK Cargo
838
NSB
837
SNCF *784
CFR MARFA
728
Gysev
720
FGC
670
FS
666
ÖBB
600
CD
589
OSE
552
PKP
524
Amtrak
515
FNM
500
ZSSK
496
SZ
490
VIA
472
SNCB/NMBS
448
BDZ
429
CIE
415
NIR
354
CFR Calatori
337
Euskotren
323
BLS
318
HZ
315
FEVE
292
CFR SA
26
Railway

CH/NO

All Other

GT-Km/
Employee(000)
US Class I
28 339Canada Frt
20 179
Green Cargo
7 813
EVR
7 606
SJ
6 915
CP Carga
6 027
BRC
4 593
RENFE
4 541
NS
4 336
Floyd
3 857
VR
3 272
GFR
3 069
DBAG **
2 857
LG
2 753
SBB/CFF/FFS
2 589
Unifertrans
2 574
LDZ
2 478
CR
2 326
Japan
2 180
CP
2 075
NSB
2 007
Servtrans
1 948
Amtrak
1 932
ZSSK Cargo
1 682
CFR MARFA
1 607
Bulmarket
1 538
VIA
1 494
SNCF *
1 480
ÖBB
1 463
Gysev
1 428
CD
1 423
ZSSK
1 337
NIR
1 213
IR
1 182
BLS
1 102
FGC
1 101
SNCB/NMBS
1 070
PKP
1 033
JBV
980
SZ
911
CFR Calatori
893
Euskotren
820
OSE
797
FNM
773
BDZ
755
FEVE
671
CIE
643
HZ
626
ATOC
425
FS
327
Railway

Train-Km/
EmployeeNS
14 846SJ
13 303RENFE
13 078ATOC
10 408CP Carga
9 335
CP
9 217
NSB
8 840
NIR
7 931
FGC
7 906
DSB
7 327
OSE
6 376
ZSSK
6 319
DBAG **
6 292
Floyd
6 222
Euskotren
6 119
Japan
5 880
SBB/CFF/FFS
5 868
BLS
5 856
VR
5 695
FEVE
5 037
US Class I
5 007
CD
4 638
CFR Calatori
4 260
CIE
4 137
FNM
4 097
Gysev
3 948
BRC
3 806
EVR
3 711
VIA
3 652
FS
3 606
SNCF *
3 326
Bulmarket
3 225
Amtrak
3 007
ÖBB
3 002
BDZ
2 847
GFR
2 471
SNCB/NMBS
2 398
SZ
2 237
Servtrans
2 091
HZ
1 987
Unifertrans
1 922
PKP
1 689
LG
1 459
CFR MARFA
1 370
ZSSK Cargo
1 297
CR
992
LDZ
846
IR
710
Railway* SNCF adjusted for non-rail employees (1.079)** DB AG adjusted for non-rail employees (2.053)

Source: See Appendix A

32

Louis S. Thompson and Heiner Bente — Discussion Paper 2014-23— © OECD/ITF 2014

WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

Table 8Operating Ratios (%)
EU10

EU15
CH/NO

All Other

Railway

Operating Ratio*

RHK/FTA

900.0

OSE

553.6

FEVE

442.5

BV/Trafik.

250.0

VIA

185.5

FGC

171.3

Amtrak150.2

CP Carga

143.5

REFER

143.4

CP

136.0

CFR SA

131.4

SNCB/NMBS

120.0

Servtrans

114.0

NRIC

112.9

BDZ Cargo

109.5

MAV Cargo

108.0

MAV

105.6

CFR MARFA

105.1

ZSR

105.0

HZ

104.1

ADIF

103.9

CIE

103.0

Green Cargo

103.0

JBV

103.0

DSB

101.3

ZSSK

100.3

PKP

100.2

NSB

99.7

SZ

99.6

SJ

99.2

CFR Calatori

98.8

BLS

98.3

VR

98.1

CD

97.4

ZSSK Cargo

95.4

DBAG

95.0

Canada Frt

94.8

SBB/CFF/FFS

93.4

Pro Rail

93.0

LDZ

92.8

FS

92.7

NS

92.5

GKB

91.8

SZDC

91.2

ÖBB

90.5

RENFE

90.3

Unifertrans

90.0

SNCF

89.3

LG

88.5

DBAG **

86.9

Japan

83.1

RFF

78.7

CFL

76.4

US Class I

73.2

Gysev

69.9

EVR

69.0

Network Rail ***64.5* Operating Ratio is defined as Operating Expenses/
Operating Revenues (%). Operating Expenses include
Depreciation and Amortization, but exclude
costs of capital (principal and interest on debt
and equity.
** Estimated from DB Annual Reports. See, e.g.
2010 Annual Report at pg 60*** Taken from Network Rail Annual Report. See pg 1 of 14
of 2010/2011 Annual Report.

Source: See Appendix A

Louis S. Thompson and Heiner Bente — Discussion Paper 2014-23 — © OECD/ITF 201433

WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

Table 9Average Revenues Expressed as Constant 2011 US PPP $ per
Passenger-Km or per Tonne-Km
EU10
CH/NO
EU15
All Other

Railway

Average
Passenger
Revenue/
Passenger-Km

CFL
LDZ
CFR Calatori
Amtrak
DBAG
Gysev
NS
SNCB/NMBS
ÖBB
CIE
SNCF
ATOC
FS
VIA
BLS
NIR
Japan
SBB/CFF/FFS
LG
VR
HZ
SZ
NSB
MAV Start
RENFE
SJ
FGC
PKP
FEVE
Euskotren
CD
CP
BDZ
DSB
ZSSK
CR **
IR

0.75200.39790.29500.28990.25600.24530.22400.20630.20410.19970.19310.18780.16820.16470.15520.15250.15020.14560.13960.13750.13380.13290.11550.10840.10760.10440.10190.09550.08310.08180.08100.07200.06040.05900.04830.04690.0201

Railway

Unifertrans
ÖBB
Gysev
BLS Cargo
CIE
CFR MARFA
FS
FGC
GFR
Servtrans
BDZ
CD
SBB/CFF/FFS
DBAG *BRC
PKP
IR
SNCB/NMBS
SNCF
LG
Japan
SZ
ZSSK Cargo
FEVE
VR
LDZ
CP Carga
RENFE
US Class I
Canada Frt
CR
EVR
HZ

Average Freight
Revenue/ TonneKm

0.15930.15010.13570.1224
0.10870.10770.10560.10350.10290.10200.09750.08420.08300.08250.08170.08130.07600.06820.06260.06090.05730.0566
0.05580.04580.04350.0417
0.03620.03470.02570.02360.02320.01420.0100* The UIC data for DB AG freight Revenues are probably contaminatedby trucking revenues generated by Schenker The average revenue shown
here is taken from data for the DB AG rail freight business group as shownin the DB AG Annual Report for 2011.
** Estimated from 2008
Source: See Appendix A

34

Louis S. Thompson and Heiner Bente — Discussion Paper 2014-23— © OECD/ITF 2014

WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

Table 10
Rail Market Shares for Passengers and Freight *Country
Austria

Rail Passenger
Share (% PassKm) of Rail, Bus
and Auto Traffic

Belgium
Denmark
Finland

Country
Austria

7.4 Belgium
9.2 Denmark

Rail Share (%Tonne-Km) of
Truck Barge andPipeline Traffic

Country
Austria34.9
13.7 Belgium

Rail Share (%Tonne-Km) of Railand Truck Traffic
Only
41.6
16.8

14.6 Denmark
25.8 Finland

17.9
16.1

France5.0 Finland
9.3 France

Germany(DBAG)

Germany
8.1 (DBAG)

14.4 France
Germany
22.3 (DBAG)

Greece3.8 Greece
Ireland

1.7 Greece
1.0 Ireland

1.7

5.6 Italy
Luxembourg

7.8 Italy
2.9 Luxembourg

8.3

10.7 Netherlands
Portugal

6.8 Netherlands
15.0 Portugal

15.1

5.5 Spain
8.8 Sweden

3.6 Spain
40.6 Sweden

7.4 UK
7.0 EU 15

11.3 UK
15.4 EU 15

12.0

17.5 Bulgaria
8.2 Czech
Republic
7.2 Slovak
Republic
9.9 Estonia

12.5 Bulgaria
19.9 Czech
Republic
21.0 Slovak
Republic
48.8 Estonia

13.4

10.2 Hungary
27.2 Latvia

17.9 Hungary
59.5 Latvia

20.9

1.2 Lithuania
5.2 Poland

40.6 Lithuania
18.1 Poland

41.2

30.1 Romania
2.7 Slovenia

27.6 Romania
63.3 Slovenia

35.8

7.3 EU 10
32.1 Croatia

23.8 EU 10
18.0 Croatia

25.9

4.6 Norway
17.5 Switzerland

15.0 Norway
39.4 Switzerland

17.2

0.2 US
0.3 Canada

32.3 US44.4 Canada

39.0

26.8 China
7.9 Japan

36.4

Japan

36.4 China
84.2 JapanIndia

14.1 India

33.2 India

35.6

Ireland
Italy
Luxembourg
Netherlands
Portugal
Spain
SwedenUK
EU 15
Bulgaria
Czech Rep.
Slovakia
Estonia
Hungary
LatviaLithuania
PolandRomania
Slovenia
EU 10
Croatia
NorwaySwitzerland
US
Canada
China

25.9

25.9
1.0
3.0
15.3
3.7
40.6
17.5
20.7
21.5
48.8
63.8
19.7
63.3
21.5
39.7
64.6
7.9

* Note: This is taken from OECD website data

Source: See Appendix A

Louis S. Thompson and Heiner Bente — Discussion Paper 2014-23 — © OECD/ITF 201435

WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

Table 11Development of Railway Traffic Over Time
CAGR
1980 to2011 (%)

CAGR
1995 to2011 (%)

Total Passenger-Km
France
SNCF

1970

1975

1980

1985

1990

1995

2000

2005

2006

2007

2008

2009

2010

2011

40 97950 69654 66062 07063 76155 31169 57176 55979 48381 487

86 66485 69784 86086 0942.2

4.1

GermanyDBAG*

62 36266 17763 63765 15761 02470 33474 01572 49774 73874 67776 92975 57977 22177 567

0.9

0.9

UK

BR/ATOC/Frt

EU 15

Czech Rep

CD

Poland

PKP

EU 10

US

Amtrak

Japan

Japan

Switzerland

SBB/CFF/FFS

30 40930 25631 70430 25633 19130 00038 20043 10046 10048 80050 80051 50054 60057 500

2.9

6.1

219 183

244 950250 263

258 071

269 593273 724

298 945299 741313 374

315 847

334 435

344 443344 800

349 668

1.6

2.3

8 023

7 266

6 631

6 887

6 855

6 759

6 462

6 553

6 635

na

-1.7

36 89142 81946 32451 97850 37320 96019 70616 74216 971

17 081

17 95816 45415 71515 740-5.0-2.6

101 034

109 558

119 213133 724

131 326

68 52054 29047 10547 67446 33946 16540 26438 87138 920

-5.2

-5.0

6 031

7 637

8 042

9 769

8 924

8 970

8 660

8 706

9 309

9 943

9 476

9 518

10 331

1.4

1.3

189 726

215 289

193 143

197 463237 551

248 993

240 657

245 957

249 029

255 201

253 555244 235

244 591

245 612

1.2

-0.1

8 168

7 984

9 167

9 381

11 04911 71212 83513 83014 26715 13216 14216 18216 86817 156

3.0

3.5

1990

1995

2000

2005

2006

2007

2008

2009

2010

2011

67 58663 47368 81555 12150 66748 13655 35240 70140 92440 63435 93226 48222 84023 241-5.0-6.4

Germany

DBAG *

109 963

103 114

118 988

120 493

101 166

69 44276 81581 72288 40792 07791 17872 25780 378111 980

-0.3

4.4

UK

BR/ATOC/Frt

20 0000.6

4.3

Czech Rep
Poland
EU 10

CD
PKP

US
Japan
Switzerland

Class IJapan
SBB/CFF/FFS

1980

1985

CAGR
1995 to2011 (%)

1970

EU 15

1975

CAGR
1980 to2011 (%)

Freight Tonne-Km (000,000)
France
SNCF

24 55020 96017 640

16 04715 986

12 53718 09021 70021 88021 18020 63019 06019 230387 140361 684

404 831393 535

354 582219 743249 703237 664

253 120251 712246 595

178 880

183 365

240 223-2.5

0.8

17 22054 015144 489

14 38545 438140 046

16 36442 651
138 913

16 97243 548140 534

15 95139 200131 839

12 61629 941
96 287

11 92134 327
98 57212 12337 189122 353

na
-5.9
-4.9

-5.5
-5.4
-2.9

2 141 768
21 80010 6582 478 477
22 6328 571

2 588 741
23 0148 439

2 586 767
23 166
13 3682 596 542
22 10012 531

2 256 650
20 4324 181

2 470 556
20 255
7 778

2 526 444
20 256
7 656

3.1
-2.8
0.2

2.6
-1.8
-0.6

98 233267 495

127 505
330 140

132 576
350 849

118 863
340 652

81 776253 261

22 63468 206
168 657

1 117 386
61 4826 592

1 101 962
46 030
5 139

1 342 598
36 9617 385

1 281 274
21 3837 049

1 510 629
26 8038 303

1 907 610
24 7478 156* Before 1993, this is the sum of DB and DR.

Table 12Evolution of Operating Ratio and TU/Employee Over TimeOperating Ratio %France

1970

1975

1980

1985

1990

1995

2000

2005

2006

2007

2008

2009

2010

2011

SNCF

100

105

104

113

107

107

98

96

96

96

96

100

93

89

-

-

-

-

-

95

95

101

104

78

77

RFF

-

Germany

DBAG *

109

122

114

111

117

99

UK

BR

88

97

103

100

102

92

-

-

-

-

-

-

-

Czech Rep

CD

-

-

-

-

-

110

109

102

101

100

111

101

102

97

Poland

PKP

113

131

103

102

116

112

105

101

110

111

106

100

United States

Class I

91

98

85

95

93

92

93

94

95
-

97

93

91

87

86

82

79

78

77

73

73

-

210

238

198

154

180

156

147

146

142

153

150

Japan

114

151

134

157

91

80

85

82

61

81

82

86

85

83

SBB/CFF/FFS

100

127

122

107

100

99

95

101

95

97

94

93

94

93

TU/Employee

1970

1975

1980

1985

1990

1995

2000

2005

2006

2007

2008

2009

2010

CAGR
1980 to2011 2011 (%)

FranceSNCF **

358

405

485

484

566

571

713

704

739

758

774

717

707

727

1.9

Germany

DBAG **

261

269

323

348

339

474

832

700

712

721

700

616

658

671

3.5

3.2

UK

BR/ATOC

200

202

204

260

363

333

1 037

1 099

1 164

8.6

12.1

Czech Rep

CD

297

284

322

395

420

467

490

505

589

na

6.4

Poland

PKP

375

475

492

452

393

371

403

487

474

491

470

410

470

524

0.3

3.2

US

Class I

1 973

2 259

2 929

4 244

6 980

10 13512 72115 25815 44815 47015 79014 85616 26815 927

8.4

4.2

US

Amtrak

685

357

364

407

374

350

450

467

490

518

493

480

515

1.8

2.9

Japan

Japan

546

608

556

791

1 364

1 422

1 654

1 981

2 065

2 142

2 130

2 055

2 070

2 079

6.5

3.5

Switzerland

SBB/CFF/FFS

363

321

431

443

513

593

831

863

891

1 125

1 126

798

876

868

3.4

3.5

-

78

79

95

Amtrak
Japan

96

91

-

-

CAGR
1995 to2011 (%)
2.2* Prior to 1995, DB AG is the older DB** Both SNCF and DB AG are affected by the presence of a large number of non-rail employees, which cannot be corrected for 1980 and 1995. If later years include a higher percentage of non-rail
than earlier years, then TU/Employee will look too low, and productivity growth will also look too low.

36

Louis S. Thompson and Heiner Bente — Discussion Paper 2014-23— © OECD/ITF 2014

WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

Table 13
Evolution of Railway Average Tariffs Expressed in Constant 2011 PPP$
Average Passenger Revenue/Passenger-Km Expressed in 2011 PPP International Dollars
1970
1975
1980
1985
1990
1995
FranceSNCF
0.04780.06110.08770.12570.12490.1090

2000

2005

2006

2007

2008

2009

2010

2011

0.12340.17670.17610.17640.17930.19050.19080.1931

Germany

DBAG **

0.10790.16730.20150.19930.19060.18080.18520.21670.20800.20430.20450.21930.22660.2560UK

BR/ATOC

0.03320.04830.09470.12380.14790.16610.16090.15910.16150.16350.17150.18420.18320.1878Czech Rep

CD

0.04190.07490.07680.07500.07540.07220.08270.08080.0810PolandPKP

0.00410.05580.06870.10040.10320.08550.08820.1051

0.0997

0.0955

US

AmtrakJapan

All

Switzerland

SBB/CFF/FFS

0.11740.13890.14510.16020.15100.17050.2171

0.23400.25050.29350.27910.27900.28990.1265-0.2164--0.17390.16820.15800.15530.15180.15220.15730.15020.15020.11070.13550.14280.22440.13040.13560.11580.15690.12470.2016

0.19690.15890.14490.1456

Average Freight Revenue/Tonne-Km Expressed in 2011 PPP International Dollars
1970
1975
1980
1985
1990
FranceSNCF
0.04580.05840.07580.1116
0.0942Germany
DBAG**
0.13720.17550.16100.15130.1161UK
BR/Frt0.0356
0.05380.10750.10940.1161
Czech Rep
CD (2003)
PolandPKP
0.0232
United States Class I
0.03420.04160.04580.04130.0306Japan
All
0.11930.12290.1718
Switzerland SBB/CFF/FFS
0.21210.28230.22350.21110.1574

1995
0.07920.0900na
0.09880.07240.02430.08000.12792000
0.05280.0601na
0.13360.08250.01850.06740.09252005
0.05692006
0.05460.0471na
0.09100.08390.02000.05650.09492007
0.05440.0475na
0.08450.08030.02070.05570.0753

2008
0.05840.0536na
0.08190.08460.0232
0.05640.07802009
0.0646
0.0535na
0.07510.08540.02130.0600-2010
0.06420.0544na
0.09460.08100.02320.05730.08832011
0.0626
0.0564na
0.08420.08130.02570.0830na
0.10620.08350.01900.05750.09542012
0.05870.0263** Before 1995, this uses the old DB data (DR not included). Freight rates are recalculated from DB Annual Reports to remove apparent Schenker distortion.

Table 14
Evolution of Railway Market Shares
Rail Market Share (% Passenger-Km) of Rail, Auto and Bus Passenger Traffic
1970
1975
1980
1985
1990
1995
France
11.0
11.2
10.0
10.5
8.8
7.0

2000

2005

2006

2007

2008

2009

2010

2011

8.1

8.3

8.6

8.7

9.3

9.2

9.1

9.3

Germany

8.8

7.7

7.1

7.4

6.3

7.4

7.7

7.6

7.7

7.7

8.0

7.9

8.0

8.1

UK

8.1

7.5

6.7

6.0

5.1

4.3

5.4

5.7

5.9

6.3

6.6

6.7

7.1

7.4

EU 15

10.4

9.5

8.5

8.1

7.0

6.6

6.9

7.0

7.2

7.3

7.6

7.9

7.8

7.0

10.9

9.1

7.9

8.0

7.8

7.7

7.4

8.1

8.2

Poland

55.9

48.3

48.5

36.1

30.6

12.7

9.8

7.3

6.9

6.8

6.3

5.7

5.3

5.2

EU 10

50.1

40.1

35.8

32.6

29.1

16.2

12.3

9.0

8.6

8.3

7.8

7.3

7.0

7.3

US

0.4

0.1

0.1

0.1

0.3

0.2

0.2

0.2

0.2

0.2

0.2

0.2

0.2

0.2

Japan

50.4

47.3

42.2

40.3

31.2

30.4

28.8

29.5

30.1

30.6

30.9

30.4

Switzerland

16.9

14.2

12.9

12.3

14.8

14.4

13.6

16.1

16.4

16.9

17.0

17.3

17.5

17.5

Rail Market Share (% Net Tonne-Km) of Rail Plus Truck Traffic
1970
1975
1980
1985
France
50.5
42.1
39.8
39.1
Germany
47.5
36.1
33.9
32.3
UK
22.4
18.6
16.2
13.7
EU 15
32.2
23.6
21.5
20.5

1990
30.2
37.8
10.7
20.3

1995
22.9
22.9
8.3
15.4

2000
23.1
21.6
10.5
15.6

2005
17.0
23.5
11.4
14.3

2006
17.2
24.5
11.6
15.2

2007
17.1
25.0
10.9
15.2

2008
17.1
25.3
11.5
15.4

2009
16.2
23.8
12.0
14.3

2010
14.7
25.5
10.8
14.8

2011
16.1
25.9
12.0
15.4

Czech Republic

Czech
Republic
Poland
EU 10

86.3
78.4

79.9
74.4

75.2
69.3

76.7
69.4

67.5
63.8

44.9
57.1
48.0

30.9
41.9
40.0

25.5
29.4
29.0

23.9
28.2
27.5

25.3
25.4
26.0

23.3
23.0
24.8

22.2
18.5
22.1

21.0
18.5
22.4

20.7
19.7
23.8

United States*
Japan
Switzerland

65.1
31.7
59.0

62.5
26.6
52.7

62.7
17.3
53.2

59.5
9.6
47.8

59.7
9.0
44.0

59.9
7.9
42.2

56.4
6.6
44.9

57.5
6.4
42.6

59.0
6.3
43.3

58.0
6.2
41.3

54.8
6.0
41.5

54.5
5.8
38.4

7.7
39.4

7.9
39.7

* US calculated on different basis using AAR statistics for rail versus intercity truck only. OECD does not provide similar data for other countries.

Louis S. Thompson and Heiner Bente — Discussion Paper 2014-23 — © OECD/ITF 201437

WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

Table 15

Rail Liberalization Index for EU Railways>800
600 to 800
300 to 600<300

Country
UK
DE
SE
NL
AT
DK
CH
PL
CZ
RO
PT
SK
NO
EE
LT
IT
SI
BG
LV
BE
HU
FI
ES
LU
FR
GR
IE
Sample
EU 15
EU 10
EU 25

Advanced
On Schedule
DelayedPending Departure
No data

LEX, ACCESS and COM Details

Overall Liberalization
2002 2004 2007 2011
805 781 827 865
760 728 826 842
760 729 825 872
720 695 809 817
430 579 788 806
720 693 788 825
650 677 757 741
549 739 737
549 738 738
722 726
380 668 707 737
458 700 738
390 589 698 729
257 691 729
222 684 592
560 688 676 737
326 665 672
652 718516 650 587
395 461 649 753
366 637 658
410 542 636 672
195 148 630 583
280 467 581 585
340 305 574 612
210 162 559 592
295 149 333 467
17
25
27
27

2007
Frt. Pass.
848 798
844 809908 742887 732852 727
811 757
848 662786 692
798 679797 650797 619756 643836 574727 667744 624734 617743 585
761 557
733 576780 518740 533
732 540785 486
688 474
727 431690 429458 206
27
27

2011
Frt. Pass.
862 852875 814896 855884 779873 761851 808
850 680
826 699783 705
834 650847 676793 702861 652781 701
703 530
809 706
799 590806 668
747 500
881 663780 592
753 661
770 485742 508
772 521698 559
603 399
27
27

484
-

769
759
765

808
785
799

520
405
480

681
688
683

718
690
706

592
621
604

670
634
655

2002
960
840
800
760
680
860
600

700
580

660

380
620
300
520
340
260
520
17
613
-

LEX
2004 2007 2011
940 969 980
750 905 935
680 857 960
670 865 887
530 819 895
790 821 925
605 670 678
600 783 803
530 839 786
822 783
820 829 884
535 853 857
570 777 769
380 728 840
260 820 730
740 819 795
550 622 655
722 839
580 683 780
425 740 820
485 731 822
640 732 729
250 711 701
530 551 669
360 595 650
305 619 859
180 332 414
25
27
27

ACCESS
2002 2004 2007 2011
740 715 791 837
840 720 807 819
760 760 817 850
820 710 795 799
410 600 781 784
770 650 780 800
770 710 778 756
530 728 720
560 713 726
697 711290 605 676 701
430 662 708
410 595 679 719
205 680 702
210 650 558
680 670 640 722
230 675 676
635 688
485 642 539
500 475 626 737
320 613 616
440 505 612 657
180 105 610 554
220 440 588 564
430 280 568 602
240 100 544 525
280 130 338 481
17
25
27
27

COM
2002 2004 2007 2011
780 580 793 866
520 505 555 615
720 510 633 577
460 455 509 680
240 232 349 575
480 390 498 655
440 495 459 509
175 490 518
215 279 422
440 487
220 190 200 434
260 381 381
140 135 274 482
245 704 629
165 184 120
240 225 293 470
120 153 337
241 421225 313 411
180 180 201 424
125 275 522
160 140 145 156
140 110 151 333
152 120 115 104
152 130 178 334
100 100 133 136
100 100 115 120
17
25
27
27

574
490
545

507
-

310
-

744
760
751

807
790
800

498
371
454

665
670
667

695
664
683

2011 pg
12
66
67
52
59
2007 pg.
32
57
71
78
59
64
2004 pg27
29
2002 pg579Note: 2002 Indices were visually estimated from graphs. Numbers shown were then calculated by multiplying the original numbers by 4, 2 and 4 respectively.

264
191
239

325
346
333

432
425
429
63

68
3
11

Source: Rail Liberalization Index report of indicated year

38

Louis S. Thompson and Heiner Bente — Discussion Paper 2014-23— © OECD/ITF 2014

WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

Appendix A

A Note on the Sources of Data for This Paper
The good news with railway data -- as opposed to trucking, air and water transport data -- is that
railways probably report more information in more detail than other modes. Depending on the country
and the railway (and the year) it is possible to collect all the data used in this paper along with evenmore detailed data on types of service, commodities, etc. The bad news is that data taken fromdifferent sources purporting to represent the same thing (passenger-km in a particular year) are notalways (or even often) consistent. In addition, not all railways report all data in any given year andsome railways do not bother to report at all. In some cases, restructuring has meant that mostinformation is lost on those parts of the railway that are established separately (Green Cargo and UK
freight operators). The net result is that most of the apparently precise information in rail data sets has
to be taken with a grain of salt and that there is a real need for action by governments and the EU totake action to improve the quality and amount of rail data reported to the public. Thompson 2007
discusses this issue in more detail, and it should be an issue for this conference.
The basic source of EU railway information is the International Union of Railways (UIC). This
includes “Railway Time-Series Data 1970-2000,” “Railway Time-Series Data 2008” (the electronic
form was used) and various issues of the “International Railway Statistics” for 2002 through 2011.
Some of these data were manually transcribed, which may have introduced errors attributable only tothe authors and not the UIC.
The source of U.S. data for Class I freight railways is “Analysis of Class I Railroads” as published by
the Surface Transportation Board (STB). This report has existed essentially in its current form in an
unbroken series since the beginning of the 20th century. We have also used the “Public Use Carload
Waybill Sample” with added calculations of variable costs at the two-digit Standard Transportation
Commodity Code (STCC) level as furnished by the STB and processed by the Association ofAmerican Railroads (AAR). In some cases we have used data from “Railroad Facts,” a statisticalcompendium of Class I freight railroad activity published by the AAR. Amtrak data were taken fromvarious Amtrak statistical reports, notably the “Monthly Performance Report” for September ofvarious years that contain annual fiscal year data along with various Amtrak Annual Reports.
Canadian data were taken from various issues of “Railway Trends” published by the Railway
Association of Canada (RAC) and data taken from Statistics Canada as processed by the RAC.
UK data are taken from UIC reports and from various editions of “National Rail Trends Yearbook”
published by the Office of the Rail Regulator.
Chinese data are taken from “China Railways Facts 2008 edition” published by the Statistics Center ofthe Ministry of Railways along with updated figures provided to us by the Ministry.

Louis S. Thompson and Heiner Bente — Discussion Paper 2014-23 — © OECD/ITF 201439

WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

Data on Tonne-Kms and Passenger-Kms used for calculation of market shares were taken from theOECD website.
Data on inflation indices, currency values and PPP conversion factors are taken from the WorldBank’s “World Development Indicators” that generally cover all countries over the period 1960 topresent.
For reasons of space and brevity, we have not included the full set of 33 Excel spreadsheets covering
81 railway entities (26 existing or former countries) over 41 years. These are available on requestfrom the authors (lou.thompson@gmail.com). The Tables presented are extracted from these
supporting spreadsheets.

40

Louis S. Thompson and Heiner Bente — Discussion Paper 2014-23— © OECD/ITF 2014

WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?

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