Combined transport’s performance has been a tale of “a concurrent series of crises,” says industry association UIRR. The sector experienced losses for a fifth consecutive business quarter. Performance during Q4 2023 shrank by 11,1 per cent compared to the same period in 2022. At the same time, the business sentiment among professionals remained ‘slightly negative’, with expectations for 2024 not being high.
Not much explanation is needed as to what has prolonged the poor performance of combined transport operators. UIRR’s remarks capture the situation quite comprehensively: “2023 has produced a concurrent series of events with a negative outcome for Combined Transport through natural disasters, a major derailment, extensive works throughout the network, which coincided with extreme weather phenomena and strikes,” said the association.
It added that “the grim situation was exacerbated by the Ukraine war, the disruption to container shipping in the Red Sea and the weak European economic output and consumer confidence. The upward trend in railway traction costs, fuelled by persistently high traction electricity prices, wage and track access charge increases, worsened the situation.”
An expected result
The results confirm what Akos Ersek, chief policy advisor at UIRR, had stated in an exclusive interview with RailFreight.com in the summer of 2023. “For 2023, UIRR members see that quantities lost in the first half of the year will not be recovered in the second half despite the relative growth in demand. Most likely, 2023 will be a negative year overall”, he said in late June.
The business sentiment of combined transport professionals could indicate what to expect in 2024. For instance, the fourth quarter of 2021 was the last time UIRR’s sentiment index stood positive. Since then, quarter by quarter, it decreased, and by the last quarter of 2022, it went negative. This trend continued in the first quarter of 2023. In simple words, it meant that combined transport operators did not expect the market to develop positively.
In general, a “negative outlook indicates a definitive market decline in demand”, according to Ersek’s indication. As a result, combined transport operators do not seem confident of a business rebound, at least for the first half of 2024.
