Rail Cargo Hungaria Zrt. discussed with its forwarding partners the actual domestic and international market situation of rail freight transport as well as the reasons and consequences of the correction of charges enforced by the market.
Price adjustment is necessary to keep up the efficiency
Dr. Imre Kovács, chairman of the board, CEO told during his analysis of the rail freight transport market that the share of rail freight transport in Hungary has gone back from 24% to 17,5% since the turn of the millennium. The number of registered railway logistic companies however has tripled at the same time. The companies therefore were forced to rationalise: the adopted their transport equipment to the decreasing demand, cut down development, and drew less attention to the education of specialists and labour supply. All this have led to lack of capacities and downgraded efficiency.
The situation was made even worse by the track obstructions due to constructions. These obstructions are planned to be maintained at several important lines for months in the following year as well. The bypass routes will require significant additional human-and tractive resources.
Revenue-producing capabilities to be increased
Dr. Imre Kovács pointed out that in the past 5 years the gap between transport charges and own costs grew year on year causing the expenditures to exceed the revenues by 15%, while efficiency went back by 20%. "This tendency has to be stopped" – he stated. The sustainment of such company of this size can only be realised by investments in new assets and this requires the increase of revenue-producing capabilities of Rail Cargo Hungaria. The implementation of a sustainable tariff structures will be enforced by the market's expanding capacities and enhanced demands for quality assurance investments. Therefore – mainly in the block train traffic – prices need to be adjusted.
We are interested in maintaining long-term customer relationships – Mr. Kovács told in his conclusion. As for the single wagon load traffics the services will be improved to secure country-wide coverage of RCH being the only provider of such services in Hungary.
New terms and conditions of transportation
The colleagues of Rail Cargo Hungaria's commercial department will negotiate the terms and conditions of transportation for the year 2018 individually with the customers for each business separately. In general the planned tariff foresees a rise of 6%.