Market Report, "Germany Freight Transport Report 2010", published

PR Log (Press Release) – Jan 30, 2010 – In November 2008, broadcaster Deutsche Welle reported that plans to part-privatise the national rail service had been postponed for a second time. Government officials said they were delaying the proposed sale of a stake in an operating subsidiary for an undisclosed period of time due to the turbulence created by the global financial crisis that broke out in October. Some sources suggested privatisation might be put off until after the next German elections, due in September 2009. The government had been due to sell just under 25% of the shares in  Deutsche Bahn Mobility Logistics, a subsidiary company charged with both passenger and freight rail transport. Thomas de Maiziere, chief of staff for Chancellor Angela Merkel, said a sale was still possible before the elections and that it had been postponed, not abandoned. However, observers noted that the finance ministry was not calculating to receive any privatisation revenue from the sale during the course of 2009. Other officials also stressed that the government would not want to sell the stake at a price that undercut its value and would bide their time until 'a reasonable return can be expected'.  BMI's newly-released  Germany Freight Transport Report 2009 concludes that rail freight traffic (measured in million tonnes/kilometre, mntkm) will grow at an annual average of 1.1% during 2009-2013. This is a shade slower than the economy as a whole, which we expect to expand by 1.3% per annum over the same period. Reforms and structural change will be important issues facing the industry. The pace of change will be relatively measured, however. Under approved plans, rail freight is expected to take some of the strain off the roads, through a variety of mechanisms and initiatives including increased reliance on road pricing, encouragement of inter-modal transport hubs, and development of intelligent traffic systems (ITS).  BMI predicts, however, that road haulage will grow by 1.2% per annum and actually increase its share of total freight traffic to 69%. Rail freight will grow by 1.1% per annum and maintain its share of the total at 16%. Among the other modes, sea cargo will grow by 1.4%, supported by Germany's international trade, while airfreight will expand by 1.3% per annum, thanks to a steady performance in a tough market by  Deutsche Lufthansa. The operating environment for transportation companies will be favourable although constrained by slow macroeconomic growth. We score the overall freight industry operating environment at 57.6 (out of a theoretical total of 100). That said, Germany's regulatory and competitive environments, important components of the overall rating, still present scope for improvement, given the plethora of taxes and regulations that add to operating costs. Despite this, the German freight industry can continue to count on world class companies with a deserved reputation for quality and attention to detail. Across all modes the scene is set for moderate growth and development. With Germany acting as a key European manufacturing and trading hub,  BMI forecasts that its transport and communications sector will grow to a value of US$217.4bn by 2013, equivalent to 7.4% of GDP.

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