Railway Wagon Market Analysis and New Multi-Purpose Wagon Solution for Freight Transports - Finnish Manufacturing Perspective

Abstract

Railway freight wagons are getting old very fast; this concerns Russian, Finnish and Swedish fleet, as well as Europe in general. It is not untypical to find wagons in use in Europe or in Russia, which have reached their maximum age. Still they are needed to be used, since there does not exist enough new wagons to replace them all. Forecasts have predicted that the shortage in freight wagons will grow at least until the year 2010. Currently newest wagons are acquired by new railway entrants or leasing firms - the latter has been very popular alternative e.g. in Russia. Demand growth will continue much longer period of time, if freight traffic flows start to favor rail instead of other transportation modes. Problems with a rather old wagon fleet in Europe and Russia have affected wagon manufacturers serving them - generally speaking European manufacturers are hardly profitable, and have sluggish sales development, Russian and Ukrainian manufacturers have been able to show a bit better performance, but only in very recent years. As we compare wagon manufacturing performance into US companies, we find that performance in terms of sales, profits and shareholder value is in much better shape in US - surprisingly, US manufacturers have been able to share dividends for their owners. \nThe purpose of this research work was to develop new freight wagon concept to be used in Finnish, Russian, and in some parts in Chinese railway freight traffic. This new type should be able to operate as multi-purpose wagon, being able to carry raw materials as well as containers - with this solution we could be able to balance biased transportation weight caused by the usage of different transportation modes. As a basis of our development work, we analyzed through database of above 1000 Russian freight wagon types with Data Envelopment Analysis (DEA) approach, and were able to find most suitable wagons for container transports (analyzed in more details 40 alternatives), with varying container cargo - optimization is based mostly on the length of the train as well as on its total weight (carrying capacity is rarely an issue). Thereafter, by discrete event simulation we evaluated one multipurpose wagon in real-life transportation network (e.g. importing raw wood to Finland or China, and exporting containers back to Russia), and noticed that shorter length of a train gives cost advantage, especially in raw material transports, and also in situation, where border-crossing points are fewer. Shorter wagon is also more flexible with regard of container transports (as forty feet equivalent units are more common nowadays). In the end of our research work, we propose as suitable new wagon production approach networked philosophy, where parts of the wagon are being produced in Finland, and other parts in Russia and/or in Ukraine. This new type of wagon should be registered to Russia, since in that case it is able to serve Finnish-Russian traffic, but also with modifications Russian-Chinese traffic.

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