Open Access Open Access  Restricted Access Subscription Access
Cover Image

Increasing competitiveness in a liberalised rail freight market – the Hungarian Case

BALINT FARKAS

Abstract


The rail freight market in Europe has been stagnating for years calling for an investigation into the factors able to improve competitiveness of this sector. The aim of this study is therefore to single out a critical factor that has the potential of increasing the competitiveness of the entire rail freight market across the board. Methods: First,  the European scene is described by analysing the European rail freight market country-by-country between 2008-2015. Subsequently, companies competing in the Hungarian rail freight market are compared based on their operating incomes. Conclusions are drawn about the structure of that market based on the Herfindal-Hirschmann index (HHI). Gained information on market concentration points to the fact that the biggest Hungarian rail freight company’s market share is decreasing while its operating income exhibits significant fluctuation. No general similarity or tendency is observed among the companies thus, for further study, the pyramid model of Gardiner, Martin and Tyler (2004) is applied to the rail freight market. At the bottom of the pyramid model lies the level of infrastructure. By developing further this base factor the whole market dynamic can be changed. This development, however, needs to look at rail passenger transport, as yet state-owned in Hungary, and the already privatised rail freight transport as one system. Our results show that infrastructural change can modify the level playing field of railway markets globally so that competition and market players are not harmed. As a result railway infrastructure stands out from a competitiveness point of view as a factor to be developed in a way to ensure unbiased distribution of its benefits. Conclusion: Methods described in this study can be applied to the entire railway market including markets before liberalisation. Multiple beneficial effects of rail infrastructure development are demonstrated thus supporting EU policies aiming at railway infrastructure development, among others, continuing investment into the designated Rail Freight Corridors.


Full Text:

PDF

Refbacks

  • There are currently no refbacks.