DP 201423

What is Rail Efficiency
and How Can it Be Changed?
23
Discussion Paper 2014 • 23
Louis S. Thompson
Thompson Galenson & Associates,
Saratoga, CA, USA
Heiner Bente
Civity Management Consultants,
Hamburg, Germany
What is Rail Efficiency and
How Can It Be Changed?
Discussion Paper 2014-23
Prepared for the Roundtable:

Efficiency in Railway Operations and
Infrastructure Management
18-19 November 2014,

International Energy Agency, Paris, France
Louis S. Thompson
Thompson Galenson & Associates
Saratoga, CA
USA
Heiner Bente
Civity Management Consultants
Hamburg
Germany
December 2014
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WHAT IS RAIL EFFICIENCY AND HOW CAN IT BE CHANGED?
Table of Contents
Abstract .................................................................................................................. 4
1. Defining Efficiency in a General Sense .......................................................... 4
2. Indicators Available From Published Data ..................................................... 5
3. Initial Rankings Based on Cross-Sectional Comparisons and Initial

Discussion of Time-Series Data ...................................................................... 7
4. How Can Efficiency Be Changed? ................................................................ 12
5. Did Any of These Changes Work?................................................................ 13
6. Conclusions ................................................................................................... 20
Annex 1 ................................................................................................................ 25
Appendix A .......................................................................................................... 39
Bibliography ........................................................................................................ 41
Louis S. Thompson and Heiner Bente — Discussion Paper 2014-23 — © OECD/ITF 2014 3
Abstract
Assessing railway efficiency is complex for a number of reasons. Railways produce a wide range of
outputs including passenger service, freight service and, in some cases, separated infrastructure access
services. Railways that differ in scale or in the mix of these services inherently differ in their apparent
“efficiency.” Railway data sets, though probably more detailed than in other modes, are fraught with
issues of quality, consistency and cost and asset allocation. Assessing “efficiency” necessarily
requires both cross-sectional indices to put each railway into proper context and time series data to
show changes in performance over time in response to changes in the railway’s economic and policy
environment.
This paper assembles a wide database of railway data relating to operating scale and various indices of
performance over the period of 1970 to 2011. We show, as expected, that railways differ widely in
scale and mix of services, which may partly explain differences in ranking by performance indices.
We show also that railway performance has changed greatly over time and that, in some cases,
changes in performance can at least partly be attributed to reforms in structure, ownership and
management incentives.
1. Defining Efficiency in a General Sense
In the abstract, what we mean by “efficiency” or productivity (we will use these terms essentially
interchangeably) is maximizing the outputs from a set of inputs or maximizing the ratio of
outputs/outputs. Efficiency is not a standalone concept, however; efficiency is always dependent on a
comparative context. We need to know how a given performance compares with others.
Defining and measuring efficiency or productivity in the railway context is a complex problem
because:
 Size and scale matter. Large railways and highly dense railways have a potential advantage in
efficiency because some parts of railway operations are subject to returns to scale, at least over the
range below the very largest systems.
 The mix of services matters. Most measures of productivity appear to show that passenger service
is less “productive” than freight. That is, a passenger-km tends to require more resources to
produce than a tonne-km: after all, many countries operate 10 000 tonnes (or greater) unit freight
trains while passenger trains carrying more than 1 000 passengers are rare (see Mumbai commuter
trains, however). Moreover, freight is generally considered to be “commercial” and market-driven
and managers have an opportunity to set reasonably clear management objectives: passenger
4 Louis S. Thompson and Heiner Bente — Discussion Paper 2014-23— © OECD/ITF 2014
services are typically justified by social as well as financial performance, leading to political
involvement and mixed, even contradictory management objectives.
 Evaluating railway efficiency therefore requires a number of different types of indices relating to
scale, asset productivity (including labor), financial indices (revenue-cost) and economic measures
that include social costs and social benefits. No single index can ever be dispositive. Instead, we
will need to look at a collection of indices to see which railways tend to fall at the bottom of the
pack and which tend to rise to the top.
 The complexity of measures makes it important to have two types of indices, cross-section
(comparing railway systems at a single point in time) and time series (change over time). There
can well be reasons for a lower ranking on various cross-sectional indices, especially when some
railways are forced by government to provide large quantities of politically driven regional or
commuter services (whether or not compensated by PSO payments), or where regulation
suppresses tariffs and harms financial performance. Even where a plausible case can be made for
lower comparative performance, though, adverse changes over time are harder to explain.
2. Indicators Available From Published Data1
Indicators of efficiency or productivity can be developed at many different levels. The objective of
this paper is to identify indicators that can be developed from publicly available data. We recognize
that some measures would require much more detailed information, such as a comparison of the costs
of DB versus Network Rail in maintaining a Km of electrified line with comparable traffic levels.
Unfortunately, information at these detailed levels is either not collected or not reported publicly.2
Appendix A contains a detailed discussion of the sources of data used in this paper. The dataset
developed covers the period 1970 to 2011 (in some cases later) for time series purposes and furnishes
a complete cross-sectional set for 2011. The data set includes all EU railways (separated between the
EU15 and EU10) along with Switzerland and Norway. In addition, for comparison we include China,
the U.S. (Class I freight railways and Amtrak), Canada (freight railways and VIA), Japan and, in some
cases, Indian Railways (IR).
 The basic indices of size and scale are (see Table 1 for a key to the countries, railways and
groupings employed in this analysis and Table 2 for summary data):
1
Unless otherwise specifically indicated, all data are expressed in metric terms – Tonnes and Kilometres.
Unless otherwise specified, Tonnes means net Tonnes.
2
The International Union of Railways (UIC) sponsored a series of studies of relative efficiency of track
maintenance among a number of railways. Unfortunately, the identity of railways in the dataset was concealed,
depriving outside analysts of the ability to put the relative performance of each railway into context. This also
deprived governments of the ability to assess the performance of their own railways and to decide whether the
public was getting value for money. Beck et al., 2012 suffers from the same “confidentiality” restrictions. An
explicit objective of this study is to rely only on data sets that are publicly available.
o Passenger data: Passengers carried3, Passenger-Kms, Gross Tonne-Kms for passenger

trains, Passenger Train-Kms, Coaches, DMUs and EMUs;
o Freight data: Tonnes carried, Tonne-Kms moved, Gross Tonne-Kms of freight moved,
Freight Train-Kms and Freight Wagons4;
o Common or joint assets: Locomotives, Labor, Kms of Line;
o Financial and economic performance: Total Operating Cost, Total Operating Revenue,
Passenger Revenue, Freight Revenue.
 Ratios of efficiency and productivity developed from the measures above:
o Average trip length for passengers (Passenger-Kms/Passengers), and average length of

haul for freight (Tonne-Kms/Tonnes). Table 3.
o Passenger share of Traffic Units (TU): Passenger-Kms/(Passenger-Kms + Tonne-Kms).

Table 4.
o Passenger share of Gross Tonne-Kms: (Passenger GT-Km/(Passenger GT-Kms+Freight

GT-Kms). Table 4.
o Passenger share of Train-Kms: Passenger Train-Kms/(Pass. Train-Kms+Frt Train-Kms).

Table 4.
o Traffic density: TU/Line Kms, Gross Tonne-Kms/Line Kms and Train-Kms/Line Kms.
Table 5.
o Coach Productivity: Passenger-Kms/(Coaches+ DMUs+EMUs). Table 6.
o Wagon Productivity: Tonne-Kms/Wagon. Table 6
o Locomotive Usage: TU/(Locomotives + MU factor)5 Table 6.
o Labor productivity: TU/Employees, Gross Tonne-Kms/Employees and Train-

Kms/Employees. Table 7.
o Operating Ratio: Operating Cost/Operating Revenue. This is a commonly used measure

of financial performance and an indication of the railway’s ability to cover its financial
obligations.6 Table 8.
3
We highlight the fact that there can well be double counting on passengers carried and freight tonnes carried
since the same passenger (or tonne) can cross a railway border and be counted each time. Passenger-km and
Tonne-km are not subject to double counting. Given that the average trip length of most EU railways is quite
short, this issue may not be as significant for passengers as for freight.
4
Numbers of freight wagons are also affected in countries where there are significant numbers of lessor or
shipper owned wagons that do not appear as railway-owned assets. For example, only one-third of U.S. freight
wagons are owned by railways.
5
Measuring locomotive productivity is complicated by the presence of DMUs and EMUs that have their own
tractive effort. We attempt to correct for this by calculating effective locomotives by dividing DMU or EMU
numbers by a factor that represents the average length of a DMU or EMU train. We acknowledge that this is at
best an approximation. Of course, on freight-only railways or railways without MUs it is not a problem.
o Average Revenue per Passenger-Km and per Tonne-Km. These are measures of the
railway’s average tariffs and give an indication of the railways cost levels combined with
government subsidy policy. These measures show performance from the customer’s point
of view – how much do I have to pay? In addition, they give a good indication of the
railway’s charges compared with competing modes. These measures are presented in
constant 2011 Purchasing Power Parity Adjusted (PPP) international dollars. This
involves several revenue conversions: 1) into constant local currency (which requires
conversion from local to Euros in those countries joining the Euro); 2) into USD at 2011
conversion rates; and, 3) into PPP $. Although this chain of conversions clearly
introduces potential errors at every stage, we believe it is interesting because it furnishes a
general comparison of amounts that users actually pay in various countries and especially
because it shows the impact (if any) on railway users of the various reform programs.
Table 9.
o Market shares for passenger and freight from OECD data of freight and passenger traffic
for all modes since 1970. This is the best available measure of how the railway has
performed in competition with highway, water and air traffic and is a measure of the
impact of reforms on the railway’s competitive position. Table 10.
3. Initial Rankings Based on Cross-Sectional Comparisons and

Initial Discussion of Time-Series Data
The data available are far too extensive for a detailed review of every railway. Instead, we can briefly
summarize the highlights of the basic performance indices illustrated in Tables 1-10.
 Table 1 provides a listing of all railway entities on which at least partial data have been collected
and show how the Tables distinguish among EU 15, EU 10 (and Croatia), Norway and
Switzerland, and all other railways. It also provides the railway abbreviations that are used
throughout this paper.
 Table 2 shows Employees (Labor Force), Line Kms, Passenger-Kms and Tonne-Kms. There are
some railways, notably China, U.S. Class I freight, Indian Railways and Japanese railways that are
immense industrial undertakings by any measure. SNCF, DB AG, PKP, FS and the UK rail
system appear at the upper end of the ranges as well. By comparison, many of the EU’s smaller
railways are one-one thousandth (or less) of the size of the largest railways. Although there have
been studies arguing that returns to scale in railways taper off beyond a certain size (and some of
the largest appear to be at or beyond this point), there is little question that many of the smaller
railways will inherently be on the less efficient end of the scale. This has to be considered when
assessing their performance.
6
The Operating Ratio includes depreciation and amortization but excludes payments to acquire and compensate
sources of capital.
 Table 3 shows the average trip distance for passengers and the average length of haul for freight.
Railways with a longer average trip are in a different market segment than those with mostly short
trips. CR, Amtrak and VIA, for example, operate numerous long-haul trains with sleepers and
diners and, for Amtrak and VIA, are partly in the cruise business and partly compete with air
travel. A critical characteristic of most of the EU railways is their very short average length of
passenger trips, which means that they operate mostly short intercity trips or commuter services.
At these trip lengths, auto and bus are the main alternatives. Somewhat the same phenomenon
shows up even more strongly in freight where U.S. Class I, CR, Canada and IR operate with
lengths of haul long enough to fully capture the economic advantages of long haul, heavy loading
freight traffic. By comparison, most of the EU railways are constrained to operate at lengths of
haul where trucking becomes more competitive. We highlight here that there is a real possibility
that the EU lengths of rail freight haulage (and passengers to a lesser extent) may be distorted to
appear lower than actual by double counting of the tonnes handled when traffic crosses national
borders.7 This also highlights the need for better Origin to Destination rail traffic data in addition
to that reported by the individual railways.8
 Table 4 shows the role of passenger traffic in the total traffic of each railway, first as a percent of
Traffic Units (the sum of Passenger-Kms plus Tonne-Kms), then as a percent of Gross Tonne-
Kms and then as a percent of Train-Kms – three different aspects of rail service. Traffic Units
give a basic picture of the relative markets the railway serves, Gross Tonne-Kms gives at least an
indication of the relative maintenance burden imposed by each type of service, and Train-Kms
gives a rough picture of the relative usage of line capacity, which is the basic limitation on the
ability of the railway to provide service. By these measures, the EU 15 railways tend to be
passenger dominant, the EU 10 railways less so, Japan is highly passenger dominant, and the U.S.,
Canada and CR are freight dominant. It is also significant to note that the passenger share of
Train-Km tends to be higher than TU or Gross Tonne-Km, indicating that measures of efficiency
of system use should look at all three measures in order to account for services, wear and tear in
the system and usage of capacity.
 Table 5 then looks at measures of line traffic density according to TU/Km, Gross Tonne-Kms/Km
and Train-Kms/Km. It is interesting that CR and U.S. Class I tend to rank higher by the first two
measures whereas the EU railways rank higher by the third. We could say that the U.S. Class I
railways, for example, are more efficient at using their tracks to move volumes of freight, but the
EU railways are more efficient at moving trains carrying passengers. From another viewpoint, we
could argue that the focus in the EU on using line capacity to emphasize Train-Kms may well
limit the ability of the systems to move freight that requires fewer Train-Kms but can interfere
with passenger trains because of the speed difference between freight and passenger trains.
 Table 6 provides a series of measures of the productivity of rolling stock. The measure for
Coaches is Passenger-Km/coaches including MU Coaches. Wagon productivity is shown as
Tonne-Km/Wagon fleet. Locomotive productivity is TU/Locomotives plus an adjusted number of
MUs to reflect the fact that MUs provide tractive effort. The adjustment factor used divides the
number of MUs by 6: we recognize this as at best an approximation. In fact, while the Coach
measure pertains only to passenger service and the wagon measure pertains only to freight, and are
7
This could be corrected if railways distinguished between tonnes originated as opposed to total tonnes handled
and tonnes originated off line and terminated off line.
8
A similar problem appeared in the US Carload Waybill Statistics in the early years of waybill reporting because
each railway in a multiple railway shipment could report the same tonnage. This has since been corrected. See
McCullough 2012 for a detailed discussion of the issue.
thus reasonably separable, the locomotive measure necessarily includes both services (except for
railways that provide only freight or only passenger service) since locomotives are often used
interchangeably. Once again, in terms of locomotive usage intensity, the major freight railways
tend to predominate. IR, CR, SBB and Japan stand well above the rest in Coach productivity.
 Table 7 shows output per employee as measured by TU/Employee, Gross Tonne-Kms/Employee

and Train-Kms/Employee. The U.S. Class I and Canadian freight railways stand far above the
pack in TU and Gross Tonne-Kms per employee, but are in the middle of the pack for Train-
Kms/Employee. This reflects the same difference in focus where, in order to reduce labor costs,
the U.S. and Canada run fewer, but long and heavy trains whereas the EU systems run higher
frequencies of shorter trains primarily because passengers place a higher value on service
frequency than do freight shippers.
 Table 8 shows the Operating Ratio, which is the ratio of total Operating Costs (excluding costs of
debt and equity) to total Operating Revenues and is a basic measure of financial performance.
Railways running an Operating Ratio above approximately 85% are much less likely to cover their
total cost and will require increasing outside support as the ratio becomes higher – they are
financially “inefficient” (though they may be economically efficient if they are rendering a social
service at low cost and with adequate compensation). By definition, an Operating Ratio above
100% means that the railway cannot survive without outside assistance. The critical observation is
how few railways even approach being self-sufficient financially. This may be well within the
fiscal boundaries established by governments, but it does ensure that railways are enmeshed in the
annual politics of public finance: note, for example, that the U.S. Class I railways are profitable
(Operating Ratio of 73.2%) whereas Amtrak (Operating Ratio of 150.2%) is dependent on public
finance. It is also interesting to see that the Operating Ratios of RHK (900%) and
BV/Trafikverket (250%) reflect the stated policies of the Finnish and Swedish governments to
collect only marginal costs of infrastructure provision from users. By comparison, an estimate of
the Operating Ratio for DB Netz is 86.9%, reflecting the stated goal of the government to collect
the full cost of operations from users. The reported Operating Ratio of RFF (78.7%) is also
surprisingly low, and perhaps explains the complaints of SNCF that access charges were too high.
It will be interesting to see what happens to this ratio when RFF is re-merged with the SNCF
parent company. The Annual Reports of Network Rail stated an Operating Ratio of 64.5%, which
would again reflect a policy of collecting full cost from users. We emphasize, though, that these
measures are particularly sensitive to accounting issues and to the transparent accounting (or lack
thereof) for public support.
 Table 9 shows the most important index of efficiency from the point of the view of the customer –
prices charged. In Table 9, we have converted average revenues per Passenger-Km and per
Tonne-Km into 2011 USD at Purchasing Power Parity (PPP). Because this involves conversion of
currencies first into constant terms, then into a common currency, and then into PPP terms, it is
clearly subject to a range of error. With this acknowledged, it is interesting to see that the average
passenger tariffs of many EU railways are well into the range of low-cost airlines as well as costs
of auto operation, which does not bode well for competition except in congested urban
environments. Similarly, many of the EU railways charge average freight tariffs that are roughly
comparable to trucking costs and thus subject to intense competition. Extremely low passenger
tariffs on some railways (IR) reflect a desire to use freight income to pay for passenger losses
caused by politically suppressed passenger fares.
 Table 10 shows the market share (percent of Passenger-Km) of rail transport in the passenger
sector in competition with autos and buses. It also shows the rail market share (percent of Tonne-
Km) vis-a-vis the entire surface transport market (trucks, water and pipeline) and then rail market
share vis-a-vis trucks only. In a direct sense, this is not so much a measure of rail efficiency as it
is a measure of the result of rail efficiency (or lack thereof) in the overall market. An inefficient
railway will perform poorly, an efficient railway has a chance to perform well. We argue that the
competition of rail versus trucks is probably the best measure of rail’s performance in the transport
markets. As this Table shows, rail plays a very different role in some countries than in others.
For example, rail plays practically no role in U.S. and Canadian intercity passenger transport but is
predominant in Japan.
Because the amount of information to be presented would be too large, we selected a few indicators
and a few countries to display a sample of the time-series information that is available. We show only
the years 1970, 1975, 1980, 1985, 1990, 1995, 2000, and 2005-2011 (interim years are available in the
underlying database). We select France (SNCF), Germany (DB through 1995 and DB AG for 1995-
2011), and the UK (old BR before 1995, ATOC, UK freight and Network Rail afterward): these
railways together account for about 60 percent of all EU 15 railway traffic. We show the Czech
Republic (CD) and Poland (PKP) as these represent about 60 percent of traffic in the EU 10 and
because the data available are not complicated by changes in corporate structure . We also show the
U.S., Japan and Switzerland (SBB) to represent railway activity outside the EU We use 1980 and
1995 as base years: 1980 is a point in the development of the EU when railways began to be affected
by the overall economic changes, and is also the year before deregulation in the US; 1995 is close to
the beginning of the Commission’s attempts to restructure the EU railways.
 Table 11 gives an overall picture of how railway traffic has developed over time. Notable from
this Table is the fact that rail passenger traffic grew faster in the UK than in SNCF and DB,
especially after 1995. UK freight traffic also grew faster. Rail traffic has been shrinking in the
EU 10 and had, at best, stabilized by 2011. Swiss traffic trends essentially mirrored those of the
EU 15, while Japanese passenger and freight traffic were stagnant or slowly shrinking. U.S.
passenger traffic grew slowly while freight traffic grew strongly, especially from the base in 1980.
 Table 12 shows the evolution in Operating Ratios and Labor Productivity (using TU/Employee).
There is a mild improvement in Operating Ratio in most countries, with a marked improvement in
U.S. Class I freight railways and in Japan. With this said, it is interesting to note the difference
between the U.S. Class I railways (73%) and Amtrak (150%). Labor productivity improved in all
countries, with the greatest growth rate in the U.S. Class I freight railroads, UK and Japan.
 Table 13 shows the side of the railways that the consumer sees – average tariffs. There was an
apparent trend upward in average passenger tariffs in every country from 1980 and in all but one
(Japan) from 1995. Average freight rates were stable or trending downward in most countries;
but, only in the U.S. Class I railroads do they appear to be well below competitive trucking rates.
We stress again here that the calculation of average rail tariffs is inherently an approximation
because of all of the conversions involved. We do believe that they are usefully indicative both as
to levels and changes over time, but they do need to be viewed with some caution.
 Table 14 shows the evolution in market shares in passenger and freight markets. The rail
passenger share of the EU 15 railways (~7%) has changed little since 1980 and 1995 whereas the
rail passenger share in the EU 10 countries has rapidly fallen to EU 15 levels. Rail passenger
traffic has an insignificant share in the U.S. and that has not changed.9 Japanese rail passenger
shares have been stable at a level much higher than the EU, while Swiss rail passenger shares have
9
This is to some extent the result of exclusion of the traffic of U.S. commuter railways (which is included in the
EU, Swiss and Japanese results). U.S. commuter railways carry slightly more Passenger-Km than Amtrak, so
the U.S. share would double, but still remain below 1% if auto traffic is included.
grown slightly and are about twice the EU levels. The picture for rail freight is quite different:
EU 15 rail freight shares have fallen since 1980 but have remained stable since 1995. EU 10 rail
freight shares have fallen dramatically since 1980 and 1995, though they may now be stabilizing at
a level slightly above that of the EU 15. Interestingly, the Swiss rail freight market share is much
higher than in the EU, though it has fallen somewhat since 1980 and 1995. The U.S. rail freight
market share has stabilized since 1980, though it was falling rapidly before then (it was 78% in
1950 and 67% in 1960).
At this point we can answer the first issue posed in this paper. Yes, there are measures of efficiency or
productivity that can be developed from publicly available data. The measures we have developed do
give an overall picture of the performance of the selected railways both in cross-section (2011) and
over time (1970 to 2011). It is possible from these measures to identify the more efficient railways:
China in both freight and passengers, U.S. and Canadian Class I railways in freight, and Japan for
passenger service. Within Europe, SBB seems to measure up quite well while the EU 15 and EU 10
railways present a mixed picture. It would also be possible to use the data developed to assess the
efficiency of a specified railway and track its progression over time if that were desired.
With this said, these measures could be greatly improved in the EU by having a regulatory body that
could specify the data to be reported by every railway, verify its accuracy and require its production
annually.10 It is possible that many of the gaps identified in the database could be filled by reference
to Annual Reports or other national documents, but there is no single point of reference for complete
and consistent reports.
In fact, the EU data gaps and consistency problems underline an important challenge in measuring and
comparing railway efficiency – most railways either do not see the need for detailed information for
internal management purposes or do not think it is in their interest to release such information to
permit public comparisons to be made. For example, as mentioned earlier the data in “Railway
Efficiency,” (Beck 2012) conceals the identity of the railways in the comparison, significantly
vitiating the use of the results. This has long been the practice of the UIC in making comparisons of
relative performance of its members. Under what circumstances should public entities, supported by
public funding, be allowed to conceal information that would facilitate public analysis and evaluation
of their performance? This will be a point to consider in the analysis of the interaction among
ownership, structure and performance measurement discussed below. It is also a critical point in
assessing whether the Commission’s railway objectives – transparent accounting for infrastructure to
ensure fair access and financial stability of the infrastructure agency accompanied by separated
accounts for passenger and rail services – can ever be met.
We argue that the information that the Commission would need to ensure implementation of its
Directives with respect to financial transparency of infrastructure, passenger and freight operations
simply does not yet exist, and should be added to the task of a designated authority. In addition, one
important piece of information – where do passengers and freight shipments actually originate and
terminate – is not yet available in the EU and awaits collection of passenger ticket and waybill
information. The same issues were described in more detail in “Railway Accounts for Effective
Regulation,” (Thompson 2007).11 The data collected and reported by the U.S. STB, including
10
For railways, this requirement might also be met by encouraging all railway service providers, including
infrastructure entities, to complete the existing data requirements of the UIC.
11
See also “Workshop Report - Measuring Investment in Transport Infrastructure,” ITF, Paris, France, February
9 and 10, 2012, where exactly the same data issues arise.
“Analysis of Class I Railroads” and “Public Use Carload Waybill Statistics” would be a useful model
for EU agencies to consider.
4. How Can Efficiency Be Changed?
It is all very well and good to define and measure efficiency (however approximately), but the effort
expended in defining, collecting and reporting data will have no payoff if there is nothing that can be
done to change the railways’ performance.12 Fortunately, if railways are willing, and the political will
exists, efficiency can be changed.
One way to change efficiency, much favored by traditional, engineering-dominated railway

managements, is increased investment (increasing capital intensity). One of the arguments in favor of
added investment – making up for deferred maintenance – can well have some justification, although
it sometimes simply reflects neglect of a facility that lost its economic role long ago and should be
taken out of service. Where legitimate deferred maintenance needs exist, good management (and good
public policy) will deal with it. Another argument – replacing old with new without regard to payoff –
tends to appear when the railway does not face any commercial objectives. In either case, this paper
does not look at increased investment alone, although we acknowledge its role in improving efficiency
when a good financial or economic case can be made, especially when the success of a new structure
depends on a fresh start from years of past investment neglect.
We instead look at various structural or organizational innovations that aimed at changing the
underlying objectives or incentives faced by railway management and use the time series data in
outlining those changes that seemed to have “worked” and those that have not been as successful.
In general terms, we can identify changes in structure, ownership and incentives, though these can
be combined and can work together:
 Structural change means movement along the spectrum that begins with monolithic form (all
assets owned by the railway and all services provided by the railway). The Ministry of Railways
in China has long been an example of a monolith. China recently separated China Railways (CR)
from a newly created Ministry of Railways, so Indian Railways (IR) is the only remaining major
railway that is still fully monolithic. There are railway structures where the dominant operator is
in control of infrastructure while other operators are tenants on the infrastructure and pay for
access (either marginal costs or a negotiated fee). This can include either competing operations in
12
Indeed, the experience of the authors suggests that railway management often resists collecting information,
and especially reporting it, on the grounds that they can’t do anything with the results anyway. Of course, it
could also be because they are concerned that better information might support efforts to change the rules of the
game they face (or in fact change them). As a rule of thumb, public ownership and management under political
control seem to be antithetical to collection of transparent information, even where the information is for public
use. To be fair, private corporations also try to restrict public reporting but, as the STB example demonstrates
(ORR in the U.K. is a demonstration of passenger information) these objections can be overcome. Moreover,
private corporations are not usually spending public money and, when they are, they are required to report in
greater detail.
the same market (freight trackage rights on a freight operator’s lines, which covers 27% of U.S.
freight lines) or non-competing operators (passenger) on freight lines (Amtrak and VIA) or,
indeed, freight operators on passenger lines (JR Freight). The U.S, Canada and Japan are
examples where the dominant operator controls the infrastructure and tenants pay for access. The
complete form of structural change is full vertical separation, with an infrastructure provider
offering neutral access to all operators in accord with published access charges. The EU
Commission’s Directives have been aimed at creating vertical separation of infrastructure but the
process has been fragmented, inconsistent across member countries and, in many cases, remain
incomplete.
 Ownership change means movement along the range from fully public to fully private. U.S. and
Canadian freight railways are now fully private, though the Canadian National (CN) was only
privatized in 1995 and Conrail was privatized in 1987. Amtrak is a publicly owned corporation.
The old Japanese National Railway was broken up (structural change) and the three largest
passenger operators privatized in 1987. Most EU railways remain fully public, but the private
sector is increasingly being allowed to provide some operating services, both in the passenger and
freight markets. The UK was at one time an extreme case of virtually full privatization, but that
has evolved back into a public/private balance.
 Changes in incentives (“rules of the game”) include situations in which the management of the
railway is given more freedom to operate commercially and is given objectives that include at
least some degree of risk for cost control or net revenue maximization or both. Management
contracting is a starting point, but the process can extend through gross cost or even net cost
franchising.13 In the U.S. context, deregulation completely changed the ability of freight railways
to work directly with shippers to set rates and services that met shipper needs without interference
from the regulator.
5. Did Any of These Changes Work?
The reform process in the US actually had three parts: formation of Amtrak in 1972 order to free the
private freight railroads of the burden of passenger deficits (and, in the minds of some, to free
passenger service from the indifference of freight company management); combining the bankrupt
freight railroads in the mid-west and northeast part of the country into one entity, refinancing and
rebuilding it, and subsequently re-privatizing it in 1987; and deregulation in 1980 (the Staggers Act).
As Tables 11 and 12, and Figure 1 show, these reforms were highly successful in stabilizing market
share, lowering rates, increasing traffic and improving essentially all indices of efficiency.14 The
comparison with changes in Amtrak is interesting. Amtrak rates went up (Table 13), service grew
slowly (Table 11), and productivity was stagnant (Table 12). Operating Ratios improved for freight
and were stagnant (and high for Amtrak). With this said, the essential purpose of Amtrak – to save the
freight railways that were staggering under the burden of passenger deficits– was achieved.
13
See ECMT 2007 for a discussion of gross cost and net cost franchising.
14
See McCullough 2012 for a detailed discussion of the impact of the Staggers Act on U.S. rail freight tariffs
and on the profitability of the Class I Railroads. Basically, rates went down and profits went up because
productivity increased even more rapidly, especially as a result of contract tariffs.
Figure 1. US Class I Railroads Operating Ratio (%) and All Commodity Average Revenue/
Ton-Mile (U.S. cents/ton-mile
)
Avg. Revenue Operating Ratio (%)
Source: Analysis of Class I Railroads and U.S. Bureau of Economic Analysis (GDP Deflator).
In Canada, privatization of CN produced a change in relative productivity of CN with CP (always

private), though the shift was not dramatic. In sum, though, Canadian rail freight rates declined
steadily both before and after CN privatization while labor productivity improved rapidly. Operating
Ratios also improved after 1995. Comparing Figure 2 with Figure 1, it is also apparent that the
Canadian experience was at least partly driven by deregulation of the U.S. freight railways, with which
the Canadian railways both compete and cooperate.15 VIA offers the same comparison with the
Canadian freight railways as Amtrak does with the Class I U.S. freight railroads: VIA’s labor
productivity is low (Table 7) and is little changed since establishment in 1980. VIA’s Operating Ratio
(185.5 – see Table 8) is high although its average tariffs are well below Amtrak and are about at the
EU average, but for a very different traffic mix (see Table 3, where VIA has the third longest average
length of trip, reflecting the importance of long-haul trains).
15
A recent OECD report (ITF 2014) showed that changes in the structure and ownership of the Mexican
railways had a similar effect.
Figure 2. Canadian Freight Railways

(Tariff index and Labor Productivity Index 1995=100)
Tariff and Labor Index Operating Ratio
Source: Railway Association of Canada.
In brief, the Japanese reforms involved breaking up the old monolithic Japanese National Railways
(JNR) into 6 new passenger companies and a freight company that operates much like a “freight
Amtrak” – it pays access charges and uses the narrow gauge lines of the passenger companies (the
high-speed lines – Shinkansen – are standard gauge and are not used for freight). The three large
passenger companies (JR East, JR West and JR Central) were subsequently privatized by sale of their
stock. An explicit goal of the reform was to break the control of the unions over the politically
oriented management. As Figure 3 shows, the reforms were highly successful in improving labor
productivity and the Operating Ratio for the system.16 This was accomplished while tariffs were held
stable (Table 13) and total traffic actually remained almost the same over the last 20 years.
Performance of JR Freight is harder to pinpoint. What is clear is that traffic has declined while tariffs
have been held stable, roughly at EU levels. In perspective though, JR Freight has faced a problem
similar to that of Amtrak: as the traffic of the dominant operator has grown there is less room for the
tenant. This has caused Amtrak’s on-time performance to plummet and has restricted JR Freight’s
ability to handle its traffic. It is probably a risk inherent to dominant/tenant schemes (or, arguably,
where some operators have closer linkage to infrastructure management than other operators).
16
The Operating Ratios shown are actually for the entire system, and are lowered by the performance of the
three smaller railways and the freight company (JR Freight). The Operating Ratio for the three larger companies
by themselves would be more favorable.
Figure 3. Changes at JNR at Privatization

[Operating Ratio (%) and Labor Productivity`]
Output/Employee Operating Ratio

2500 180
Breakup and
Labor (000
Privatization 160
TU/Empl)
2000 (1987)
140
120
1500
100
80
1000
60
500 40
20
0 0
1960 1970 1980 1990 2000 2010
Source: Author's analysis and UIC Railway Time Series, 1970-2000.
Experience in the EU is much more complex to assess. In overall terms the Rail Liberalization studies
by Kirchner17 suggest that the Commission’s structural reforms have gradually been implemented,
though the degree differs among members as Table 15 shows. Although the indices are arguable on a
number of grounds and are, in any case, only partly objective, Kirchner argued that the market is now
more liberal and that the degree of competition has increased.
Table 15 does indicate that the Liberalization Index as computed by Kirchner had improved over the
time period (2002, 2004, 2007 and 2011) studies. This appears to have been much more applicable to
freight service than passengers, probably because the interaction between public support and passenger
service is stronger than in freight. Governments find it hard to allow competition for their supported
services, though this has changed in some countries.
It is also significant that Kirchner divided his index into three parts: LEX (legal change); ACCESS
(whether the infrastructure agency actually allowed access to take place in accord with the new laws);
and COM (a measure of the actual degree of competition that had emerged. Looking at the COM
index on Table 15, even by 2011 there was only one country (UK) that had an “advanced” COM
index, and only four (Germany, Netherlands, Denmark and Estonia) that were considered “on
schedule.” It is also interesting that DB AG owns the major freight carrier in Germany, NL and DK
(and in the UK), so the apparent degree of freight competition in these countries may be less than
17
Kirchner 2011, but also 2002, 2004 and 2007.
indicated. Estonia essentially exchanges traffic only with Russia (Its Baltic connections are either
“delayed” of “pending departure”), so competition would be of limited value.
The relatively slow development of intra-rail competition combined with the slower pace of
liberalization in the passenger sector should alert us to have lower expectations for the impacts of the
EU reforms, especially in countries slower to adopt the reforms. This effect can be multiplied by the
fact that a country might well be aggressive in its reforms only to see the impact muted by slow
change in countries to which it connects.
This overall picture of a slow pace of reform in the EU railways developed by Kirchner is supported
by the results in Tables 11 and 14. The EU 15 railways do not demonstrate a particularly dynamic
performance either measured by freight or passenger traffic growth or by market share. We
acknowledge that the outcome could have (we argue would have) been worse without reform, but it is
not possible to argue that the reforms have had (to date, at least) anything like the positive impact of
the reforms in the U.S., Canada and Japan. It is also possible to argue (as the Kirchner indices
suggest) that the restructuring reforms have not actually been implemented yet to the degree necessary
to have an impact on efficiency.
The picture for the EU 10 railways (and Croatia) is even harder to assess, partly because they are more
recent members and, more important, because they were subjected to the wrenching transition from
central planning to market structure, which would have had a devastating impact on both passenger
and freight traffic no matter what changes in structure had occurred. With this said, it is at least
interesting to point out that new, private freight operating companies are already carrying nearly 25
percent of freight traffic in Bulgaria and are carrying about 50 percent of the freight traffic in
Romania. Clearly this would not have happened without vertical separation. It will be interesting to
see if these companies eventually operate at higher levels of productivity and efficiency.
It is difficult to use the efficiency indices to draw any dispositive conclusions about the performance
of DB AG and SNCF. They are both in the upper middle of the pack in size and outputs. Despite the
emphasis on developing HSR services, SNCF has an average passenger trip of only 79 Km, while DB
AG is even shorter at 40 Km, suggesting that the efficiency of both is heavily influenced by the
economics of short haul passenger service. Well over 70 percent of SNCF’s traffic output is passenger
service while DB AG’s passenger service ratio is in the high 40 percent range. In operations, though,
89 percent of SNCF’s train-km are passengers and as are 75 percent of DB’s operations: both railways
are clearly using most of their capacity for passenger service, and (as with the U.S. and Japanese
cases) when one service dominates, the others suffer for lack of priority access to capacity. Both are
in the middle of the pack as to line traffic density, with DB AG slightly above SNCF. SNCF appears
to make somewhat better use of its rolling stock fleet, though neither is at the top of the productivity
rankings. However measured, the labor productivity of SNCF is lower than DB AG, although the
productivity measures for both SNCF and DB AG (especially) are probably reduced by the inclusion
of non-rail employees in the totals.18 SNCF reports a better Operating Ratio than DB AG in 2011, but
this would not have been true in most of the earlier years reported. DB’s average passenger fare is
about 30 percent higher than SNCF, but its average freight tariff is about 10 percent lower than SNCF.
SNCF’s market share is higher than DB AG for passengers but lower for freight. SNCF’s passenger
traffic has grown slightly faster than DB AG’s, but SNCF’s performance in the freight market has
been very poor, worse than DB AG and actually worse than the EU 10 countries. DB AG’s
improvement in labor productivity has been significantly better than SNCF, but neither did as well in
18
SNCF would be raised by about 25 percent and DB nearly doubled if non-rail employees are excluded from
the productivity measures. Unfortunately, though the data exist to do this separation in later years, the
information is not available for earlier years.
this index as any of the other railways listed in Table 12 (except Amtrak). Passenger tariffs on both
SNCF and DB AG are higher than in 1990, by 50 percent for SNCF and 34 percent for DB AG. By
comparison, both saw a significant reduction in freight tariffs since 1990.
It has been shown that vertical separation adds some costs of coordination and reporting as well as
internal accounting and negotiation, although the exact degree of the added costs is around 5 percent
or so.19 The counter question -- have these costs produced offsetting benefits, for example through
added competition that reduces tariffs (as it did in the U.S.) certainly has an apparent answer: no for
passengers and mixed for freight. Essentially every EU 15 and EU 10 railway has the same or higher
passenger tariffs as in 2000 or 1995. There is no discernable pattern in average freight tariffs, with
some higher and some lower in 2011 than in 1995 or 2000.
The UK presents a significantly different picture. Although we defer to the paper by Nash and Smith
to survey the UK case in more detail, Figures 4 and 5 give a useful picture in comparison with other
EU experience. As shown in Figure 4, both passenger service and freight service reacted strongly to
the restructuring, with passenger service reaching levels not seen since the end of World War II. In
fact, as Table 11 shows, passenger service in the UK grew faster since the restructuring in 1995 than
either SNCF or DB AG, and far faster than the EU 15 average. The same is true for freight in the UK
The UK’s rail market shares for both passenger and freight increased faster than the EU 15 average
while the average passenger tariff has been nearly stable in constant terms.
There has been spirited debate in the economics academic community as to whether the positive UK
rail results have been due to privatization or to restructuring or were primarily driven by strong GDP
growth. This is an argument that cannot be resolved, but Figure 5 clearly shows that something
positive happened upon reform: it would be very difficult to attribute all of the change to growth in the
economy.
19
See, e.g., Nash (2013), at pp. 6 and 7.
Figure 4. Rail Traffic in the UK

(000,000 passenger-km and ton-km)
60000
50000
40000
30000
20000 UK BR Passenger
UK TOCs
10000 UK BR Freight
UK Freight Operators
0
1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Source: SRA 2002c and SRA, 2003a, WDI, UIC, ORR.
Figure 5. UK Passenger-Km, Ton-Km and GDP

(Index, 1994=100, GDP index constant £1994-1995)
200
Passenger-Km
180 Ton-Km
160 GDP (1994/1995)
140
120
100
80
60
40
1963 1973 1983 1993 2003
Source: SRA and UK Treasury website.
6. Conclusions
No simple attempt to measure railway system efficiency can be expected to provide meaningful
answers, both because the ambiguity and inherent challenge in defining what is meant by the term
"efficiency" and because the structural complexity of rail organizations and the heterogeneity of
railway services and offerings limits the value of any single index. Differing perceptions and purposes
for attempts to measure "efficiency" will therefore require appropriate, tailored approaches
Among the various purposes for measuring "efficiency," the following need to be distinguished in
particular:
 A government's interest to determine or monitor the overall performance of its railway system,
e.g. with respect to value-for-money, modal competitiveness, operational cost-efficiency or
financial viability;
 A government's policy analysis to define and review the success of railway restructuring or
market organization initiatives;
 An audit of railway management performance (be it in a domestic or an international context);
 An inter-governmental policy evaluation and benchmarking effort
There are fundamental practical issues about "efficiency" measurement that need to be resolved before
more high-level conceptual questions can effectively be addressed, including:
 Robust, internationally comparable reporting standards do not exist (note, while mandatory
standards apply in the U.S. and Canada, Europe has nothing close to a homogeneous format.
On a global scale, the UIC has the "best available" database, which could nevertheless be
improved. In fact, though, the UIC’s data may be at risk of losing quality and coverage;
 Transparency - Railways frequently resist reporting data to "their" governments, even when
(and this appears to be the "default option" in Europe) substantial amounts of taxpayers'
money is deployed to fund infrastructure and "public-service obligations"
 Off-Balance Sheet Items - Subsidies paid to railway systems are in many cases very
substantial, but are not clearly reported. They typically come through one, or a combination
of, infrastructure investment grants, passenger tariff surrogates and operations support and
also special purpose vehicles for "legacy staff" obligations. Such items are often not included
in railway balance-sheets and official reports, and these off-balance sheet items can have a
strongly distorting effect on financial "efficiency" measurements
 Last but not least, definitions of parameters, be they rather of technical/operational, service
performance or financial nature, often lack clarity and uniformity, which is a prerequisite for
valid international comparisons
As a consequence, and to the frustration of many industry observers, cross-sectional measurements of

railway "efficiency" are often more subject to distortion and misunderstandings than meets the eye in
the first place. This fact imposes a significant caveat on any interpretation of face-value comparative
measurements. With this is mind, time-series evaluations can strongly buttress comparisons of how
individual railways have developed over time and provide far greater reliability for interpretation.
Even so, discontinuities in reporting or the organizational set-up of railways over time can also be a
source of ambiguity (albeit less critical than in the case of cross-sectional comparisons)
From a "good public corporate governance" perspective, full reporting including "shadow assets" and
financial flows to special purpose vehicles should be the norm. This is essential to give full
accountability to the public on the deployment of funds and to inform policy makers responsibly.
Acknowledgment of the above mentioned limitations in data availability, quality and meaning leads to
a cautious note on the use of econometric models to describe railway efficiency, for a number of
reasons:
 Inconsistency of input data, including unclear definitions;
 Structural scarcity of data ("no big data") due to small and unstable samples of observed /
observable railways systems, with inevitably inadequate sample sizes for statistical
evaluations;
 An inability of econometric models to discriminate between "good" or "poor" corporate

governance and management, which in practice can have an overriding impact on actual
railway "efficiency";
 Most railway systems in the world show signs of protracted under-investment, especially in
infrastructure, because "pro-forma" statements of steady-state investment requirements (i.e.
future cash flows to be set aside) are rarely reported accurately. As a result, such backlogs go
often undetected, leading to a real risk of a mis-assessment of the condition of infrastructure or
other long-lived assets.
Qualified and informed judgment is always required in conjunction with even the best available and
most sophisticated supporting "efficiency" measurement analyses. As a high level common
denominator (an entry point) to measuring railway "efficiency," a balanced scorecard approach should
be used that allows for some standardization and is broad enough to cover different aspects and
measuring purposes in a 360 degree manner. A "Balanced Railway Efficiency Scorecard" (BRESC)
should at least contain the following elements on a first-tier level (each and all open for greater in-
depth analysis):
 Scope of the railway system;

 Asset utilization of infrastructure and fleet;
 Human resource deployment;
 Operational Performance;
 Financials;
 Customer Centric Performance (i.e. performance in the market).
Railways are very asset intensive systems and economic analysis shows that under real-life conditions,
asset utilization, which is highly disparate for different systems around the world has an major impact
on overall system profitability or "efficiency". To a very large extent, asset utilization is a result of
historically developed networks with vastly different traffic density coupled with above-rail operations
that are more or less focused on sufficiently high demand services (where “demand” can have both a
political as well as a market dimension). It is immediately and demonstrably clear that such disparate
"operating conditions" affect railways' economics by orders of magnitude, asset utilization is therefore
a structural determinant for a system's (in)ability to make profits or losses.
No other single factor is more important for economic railway "efficiency" than asset utilization.
Hence, from an "efficiency" measurement purpose standpoint it is vitally important to separate the
impact of those parameters that are primarily imposed by governments and other political stakeholders
from those that are a good "proxy" for the performance of railway management.
A good and highly aggregate "efficiency" measurement from an overall perspective is railway market
share ("modal share"); however, in cases where public subsidies are applied to provide services (the
norm in Europe), subsidies can literally "buy” market share: thus, market share and system funding
provisions need to be understood in close connection. As a direct result, "efficiency" measurements of
a railway system may not suffice to describe the performance of railway management due to the
overriding impact of economic "legacy factors" -- parameters, such as politics, which are exogenous to
railway management.
Good proxies for direct management performance are the normalized full cost per train-kilometer in
above-rail operations and the normalized full cost of maintaining and operating a unit piece of network
infrastructure (e.g. a kilometer of line or a kilometer of track) in infrastructure management
organizations. Various other dedicated or sometimes more global analyses exist to measure
management performance in infrastructure and above rail operations, many of them in confidential or
anonymous form, but it is not always clear that proper distinctions between what management can
influence and what is given by "system legacy" are made. More work is needed if the effort to
measure railway "efficiency" is to be promoted further.
Last but not least, almost all of the global railway "efficiency" measuring work is devoted to
technical/operational and financial aspects and the customer perspective (which one could arguably
consider the ultimate measure of "efficiency") appears to be a neglected area. Market-level questions
to be analyzed are for instance, "how efficient is the travel or shipment solution offered by a railway in
the eyes of the passenger or the shipper?" or "how competitive is the price of using a railway service
as compared to other modes?" From a government perspective this also means to address aspects of
public welfare.
There is reason to assume that the customer perspective has been neglected so far, because it poses a
challenge to describe and measure; however this should not be an excuse, not to attempt it (note that
emerging "big-data" applications may represent breakthrough opportunities to capture customer-
centric information)
Looking at the data and indices, per se, it is clear that the policy and structural changes in U.S.,
Canada and Japan worked in almost all dimensions and one can strongly argue that the changes would
not have occurred absent the reforms.
It is far beyond the scope of this paper to review all of the EU railways individually. The experience in
the EU is much more complex because most services at base are social rather than commercial,
legitimately increasing the role of government, and there is no good annual reporting on the value of
social benefits and costs generated by the railways.20 The result was a much less clear definition of
objectives and incentives along with unstable, often inadequate financial support reflecting the
vicissitudes of annual public budgeting. Attempts to change the situation were impeded by political
resistance from unions and other interest groups and, in many cases, a complete lack of transparency
of the actual performance (“efficiency”) of the railway that made scrutiny by the public, including the
academic sector, impossible. We also have to deal with the null hypothesis – what would have
happened without reform -- though SNCF performance may give an indication. It is also possible to
argue that DB AG has resisted the actual implementation of most of the significant aspects of the EU’s
reform objectives, at least with respect to railway structure in Germany.
It seems clear that the UK government overshot its target by smashing the old BR and privatizing it
completely at the outset: but, gradual reform since 1995 has produced a system that certainly seems
better than the old BR. In France, the attempts to reform (without actually doing so) have clearly not
been very productive. RFF never fully emerged from SNCF control, and recombining them into a new
agency will mostly have the effect of turning back the clockl. The DBAG holding company approach
produced a conflict of interest between DB Netz and the operators vis a vis potential entrants, a
conflict that will remain until DB Netz is truly separated.
20
This information could be added to other reporting requirements, at least in a prescribed, approximate form.
Annex 1
TABLES
Table 1. Sample Key
Railway name and Railway name and

Country Country
date of inception date of inception
EU 15 EU 10 + Croatia
GKB BDZ
Austria
ÖBB BDZP
Belgium SNCB/NMBS BDZ Cargo
Bulgaria
DSB NRIC (2003)
Denmark
BDK (1997) BRC
VR Bulmarket
Finland
RHK/FTA (1995) CD (2003)
Czech Republic
SNCF SZDC (2003)
France RFF (1997) ZSSK
Veolia Slovakia ZSSK Cargo
DB Germany Prior to reunification ZSR (2002)
DR Germany Prior to reunification Former Czech. CSD (End 1992)
Germany DBAG (1994) Estonia EVR
Greece OSE Floyd
Ireland CIE Gysev
FNM Hungary MAV
Italy
FS MAV Cargo (2006)
CFL MAV Start (2007)
Luxembourg
CFL Cargo (2007) Latvia LDZ
NS Lithuania LG
Netherlands
Pro Rail (1998) Poland PKP
CP CFR
Portugal CP Carga CFR Calatori (2006)
REFER (1997) CFR MARFA (2006)
RENFE CFR SA (2006)
Romania
ADIF (2005) GFR
Spain Euskotren Servtrans
FEVE TFG
FGC Unifertrans
SJ Slovenia SZ
Sweden Green Cargo (2002)) Croatia HZ
BV/Trafikverket (1988) Other Railways
BR Class I
United States
ATOC (1995) Amtrak (1972)
United
Freight (1995) Freight
Kingdom Canada
Railtrack/NR (1995) VIA (1980)
NIR China CR
Japan All
India IR
Norway and Switzerland
NSB
Norway Cargonet (2002)
JBV (1996)
BLS
Switzerland BLS Cargo
SBB/CFF/FFS
Table 3. Average Length of Haul (Km) (2011 data)

EU15 EU10 CH/NO All Other
Railway Passenger Railway Freight
CR 529 US Class I 1 477
Amtrak 355 Canada Frt 1 199
VIA 331 CR 805
LDZ 250 IR 679
SJ 205 Japan 654
IR 128 CFR SA 483
CFR Calatori 90 RENFE 437
OSE 87 GFR 392
PKP 85 SNCF 371
LG 84 Green Cargo 353
SNCF 79 BRC 324
FS 75 DBAG 318
BDZ 71 LG 288
VR 57 LDZ 279
NS 54 FS 276
ZSSK 53 VR 270
NSB 52 PKP 265
EVR 51 Bulmarket 259
MAV Start 50 DSB 240
ÖBB 49 BLS Cargo 237
SZ 49 Unifertrans 237
SBB/CFF/FFS 49 CP Carga 226
SNCB/NMBS 47 Freight 222
DSB 46 SZ 220
RENFE 46 BDZ 215
CIE 44 Servtrans 207
Gysev 41 HZ 207
DBAG 40 EVR 200
CD 40 MAV Cargo 200
ATOC 39 ÖBB 199
HZ 30 ZSSK Cargo 194
CP 30 Floyd 190
Japan 28 CD 182
FEVE 21 CFR MARFA 181
CFL 19 CIE 172
BLS 17 SBB/CFF/FFS 163
Euskotren 11 OSE 147
FGC 10 FEVE 142
Source: See Appendix A. Gysev 141
SNCB/NMBS 138
FGC 63
CFL Cargo 32
Table 4
Passenger Shares (%) Measured by
% of
Gross
Tonne- % of
% of TU Km Train-Km
ZSSK 100 CIE 100 DSB 100
MAV Start 100 FNM 100 NS 100
Amtrak 100 NS 100 ZSSK 100
VIA 100 NIR 100 MAV Start 100
NSB 100 ZSSK 100 Amtrak 100
Euskotren 100 MAV Start 100 VIA 100
FGC 94 VIA 100 Euskotren 100
CIE 94 NSB 100 FGC 98
Japan 92 Euskotren 98 CIE 98
DSB 85 FGC 93 Japan 92
SNCF 79 Japan 81 SNCB/NMBS 89
FS 77 SNCF 73 CFL 89
NS 77 RENFE 70 SNCF 89
ATOC 74 SNCB/NMBS 67 RENFE 88
RENFE 74 CP 62 FEVE 88
OSE 72 SBB/CFF/FFS 61 FS 88
SBB/CFF/FFS 69 CFL 59 OSE 87
SNCB/NMBS 66 FEVE 49 SBB/CFF/FFS 83
CP 64 BDZ 46 CP 82
CFL 64 SJ 46 CD 82
IR 61 CD 43 BDZ 75
BLS 44 Gysev 42 HZ 75
DBAG 41 DBAG 42 DBAG 75
BDZ 39 HZ 35 CFR Calatori 74
ÖBB 38 IR 35 Gysev 74
HZ 38 VR 35 BLS 73
CD 35 CFR Calatori 34 VR 70
FEVE 32 ATOC 33 PKP 69
PKP 30 ÖBB 32 ÖBB 69
VR 29 BLS 31 IR 64
CFR Calatori 28 PKP 24 SZ 60
CR 24 SZ 19 CR 44
SJ 21 CR 17 EVR 38
Gysev 21 LG 4 LG 36
SZ 18 EVR 4 Servtrans 15
EVR 5 LDZ 1 US Class I 7
LG 3 Canada Frt 1 LDZ 6
LDZ 1
US Class I 1
Source: See Appendix A
Table 5
Measures of Line Traffic Density (2011 data)
Gross T-
TU/Km Km/Km Train-
(000) (000) Km/Km
CR 51 155 CR 72 238 SBB/CFF/FFS 45 663
IR 24 887 US Class I 29 585 NS 39 369
US Class I 16 553 IR 24 356 FGC 38 007
Japan 13 207 SBB/CFF/FFS 24 342 Japan 37 355
LDZ 8 924 EVR 17 249 BLS 37 072
LG 8 759 LG 16 365 CFL 32 724
SBB/CFF/FFS 8 162 LDZ 15 510 UK 32 631
NS 7 556 Japan 13 853 CR 30 817
Canada Frt 7 185 ÖBB 13 749 FNM 28 346
EVR 6 620 Canada Frt 12 930 ÖBB 28 212
DBAG 5 646 DBAG 11 703 DSB 27 809
ÖBB 5 634 NS 11 499 DBAG 25 772
DSB 5 588 SNCB/NMBS 10 900 SNCB/NMBS 24 427
UK 4 918 CFL 8 844 Euskotren 23 367
SNCB/NMBS 4 569 BLS 6 977 Gysev 18 824
SNCF 3 692 SNCF 6 970 FS 16 474
SZ 3 604 Gysev 6 810 SZ 16 443
FNM 3 459 SZ 6 699 SNCF 15 659
Gysev 3 433 ZSSK 5 832 CD 15 598
FGC 3 222 FNM 5 346 IR 14 629
FS 3 044 FGC 5 293 RENFE 13 087
PKP 2 683 PKP 5 289 MAV 12 574
ZSSK 2 677 VR 4 937 CP 12 554
VR 2 234 CD 4 784 ZSSK 11 591
CP 2 081 RENFE 4 545 HZ 9 102
RENFE 2 077 UK 3 996 CIE 9 051
BLS 2 012 CP 3 761 LG 8 671
CFL 1 996 CFR 3 495 PKP 8 645
CD 1 981 MAV 3 374 VR 8 592
MAV 1 836 Euskotren 3 133 EVR 8 415
CFR 1 616 HZ 2 868 FEVE 8 270
HZ 1 442 BDZ 2 289 OSE 8 208
BDZ 1 316 FS 1 495 BDZ 7 737
Euskotren 1 235 CIE 1 407 CFR 7 578
CIE 908 FEVE 1 102 LDZ 5 293
OSE 710 Amtrak 1 047 US Class I 4 491
FEVE 479 OSE 1 026 Amtrak 1 629
Amtrak 279 JBV 849 VIA 785
VIA 101 VIA 321 Canada Frt 204
Table 6
Measures of Productivity of Rolling Stock (2011 data)
Passenger- TU/Locomotive
Railway Km/Coach + Railway Tonne- Railway + adjusted
MUs Km/Wagon Mus*
IR 223 404 Gysev 8 424 IR 178 950
CR 60 049 Canada Frt * 5 429 CR 172 449
SBB/CFF/FFS 47 132 CR 3 983 Japan 159 473
Japan 44 820 Green Cargo 3 429 Canada Frt 134 780
SJ 35 450 IR 3 276 SJ 104 038
CFR Calatori 20 227 LDZ 2 702 US Class I 102 161
DSB 18 434 Japan 2 328 DSB 83 231
BDZ 14 563 BRC 2 207 LDZ 82 347
FS 14 399 US Class I 2 005 Green Cargo 76 190
SNCF 14 170 GFR 1 848 MAV Start 75 489
HZ 13 759 EVR 1 677 EVR 69 907
VR 11 155 LG 1 634 LG 58 294
Gysev 11 111 SNCF 1 144 RENFE 56 566
Amtrak 8 777 SZ 1 141 NS 55 942
CP 8 601 DBAG 1 049 CP Carga 46 909
ÖBB 7 768 ÖBB 958 NSB 40 146
PKP 7 301 SBB/CFF/FFS 925 FGC 29 326
SNCB/NMBS 7 251 VR 907 ATOC 28 975
LG 6 707 MAV Cargo 727 SNCF 28 931
ZSSK 6 557 CP Carga 651 DBAG 27 558
MAV Start 6 277 Unifertrans 635 VR 26 741
OSE 5 078 RENFE 613 BRC 25 808
CFL 4 847 PKP 571 SNCB/NMBS 25 438
CD 4 570 Bulmarket 542 Floyd 24 300
EVR 4 500 BDZ 514 SZ 23 962
FGC 3 873 SNCB/NMBS 500 BLS Cargo 22 080
BLS 3 794 Servtrans 485 CP 21 887
DBAG 3 778 CD 444 Gysev 21 429
NS 3 560 FS 405 GFR 21 167
ATOC 2 677 HZ 402 ÖBB 20 711
CIE 2 452 FEVE 340 FS 18 742
FNM 2 444 FGC 239 CIE 18 220
NSB 2 245 CIE 209 SBB/CFF/FFS 17 791
VIA 1 720 CFR MARFA 167 PKP 16 133
SZ 1 528 OSE 158 HZ 15 812
Euskotren 1 125 CFL Cargo 51 Unifertrans 12 067
LDZ 420 Euskotren 3 FNM 11 640
FEVE 10 774
BDZ 10 666
CD 10 451
ZSSK Cargo 10 353
ZSSK 9 923
OSE 9 262
VIA 9 229
CFL 9 184
Euskotren 9 152
Bulmarket 8 786
CFR MARFA 7 671
BLS 7 588
CFR Calatori 5 762
CFL Cargo 3 448
* Canada's apparent high productivity may be due to exclusion of non-railway owned wagons.
Table 7
Indicators of Output per Employee (2011 data)
TU/ GT-Km/
Railway Employee Railway Employee Railway Train-Km/
(000) (000) Employee
US Class I 15 927 US Class I 28 339 NS 14 846
Canada Frt 11 245 Canada Frt 20 179 SJ 13 303
Green Cargo 7 500 Green Cargo 7 813 RENFE 13 078
Floyd 3 857 EVR 7 606 ATOC 10 408
CP Carga 3 104 SJ 6 915 CP Carga 9 335
EVR 2 919 CP Carga 6 027 CP 9 217
NS 2 850 BRC 4 593 NSB 8 840
BRC 2 652 RENFE 4 541 NIR 7 931
SJ 2 101 NS 4 336 FGC 7 906
Japan 2 079 Floyd 3 857 DSB 7 327
RENFE 2 075 VR 3 272 OSE 6 376
GFR 1 846 GFR 3 069 ZSSK 6 319
CR 1 647 DBAG ** 2 857 DBAG ** 6 292
Bulmarket 1 538 LG 2 753 Floyd 6 222
VR 1 481 SBB/CFF/FFS 2 589 Euskotren 6 119
LG 1 473 Unifertrans 2 574 Japan 5 880
DSB 1 472 LDZ 2 478 SBB/CFF/FFS 5 868
LDZ 1 426 CR 2 326 BLS 5 856
DBAG ** 1 378 Japan 2 180 VR 5 695
Unifertrans 1 341 CP 2 075 FEVE 5 037
IR 1 208 NSB 2 007 US Class I 5 007
CP 1 197 Servtrans 1 948 CD 4 638
ATOC 1 164 Amtrak 1 932 CFR Calatori 4 260
Servtrans 986 ZSSK Cargo 1 682 CIE 4 137
SBB/CFF/FFS 868 CFR MARFA 1 607 FNM 4 097
ZSSK Cargo 838 Bulmarket 1 538 Gysev 3 948
NSB 837 VIA 1 494 BRC 3 806
SNCF * 784 SNCF * 1 480 EVR 3 711
CFR MARFA 728 ÖBB 1 463 VIA 3 652
Gysev 720 Gysev 1 428 FS 3 606
FGC 670 CD 1 423 SNCF * 3 326
FS 666 ZSSK 1 337 Bulmarket 3 225
ÖBB 600 NIR 1 213 Amtrak 3 007
CD 589 IR 1 182 ÖBB 3 002
OSE 552 BLS 1 102 BDZ 2 847
PKP 524 FGC 1 101 GFR 2 471
Amtrak 515 SNCB/NMBS 1 070 SNCB/NMBS 2 398
FNM 500 PKP 1 033 SZ 2 237
ZSSK 496 JBV 980 Servtrans 2 091
SZ 490 SZ 911 HZ 1 987
VIA 472 CFR Calatori 893 Unifertrans 1 922
SNCB/NMBS 448 Euskotren 820 PKP 1 689
BDZ 429 OSE 797 LG 1 459
CIE 415 FNM 773 CFR MARFA 1 370
NIR 354 BDZ 755 ZSSK Cargo 1 297
CFR Calatori 337 FEVE 671 CR 992
Euskotren 323 CIE 643 LDZ 846
BLS 318 HZ 626 IR 710
HZ 315 ATOC 425
FEVE 292 FS 327
CFR SA 26
* SNCF adjusted for non-rail employees (1.079)

** DB AG adjusted for non-rail employees (2.053)
Table 8
Operating Ratios (%)
EU15 EU10
CH/NO All Other
Railway Operating Ratio*

RHK/FTA 900.0
OSE 553.6
FEVE 442.5
BV/Trafik. 250.0
VIA 185.5
FGC 171.3
Amtrak 150.2
CP Carga 143.5
REFER 143.4
CP 136.0
CFR SA 131.4
SNCB/NMBS 120.0
Servtrans 114.0
NRIC 112.9
BDZ Cargo 109.5
MAV Cargo 108.0
MAV 105.6
CFR MARFA 105.1
ZSR 105.0
HZ 104.1
ADIF 103.9
CIE 103.0
Green Cargo 103.0
JBV 103.0
DSB 101.3
ZSSK 100.3
PKP 100.2
NSB 99.7
SZ 99.6
SJ 99.2
CFR Calatori 98.8
BLS 98.3
VR 98.1
CD 97.4
ZSSK Cargo 95.4
DBAG 95.0
Canada Frt 94.8
SBB/CFF/FFS 93.4
Pro Rail 93.0
LDZ 92.8
FS 92.7
NS 92.5
GKB 91.8
SZDC 91.2
ÖBB 90.5
RENFE 90.3
Unifertrans 90.0
SNCF 89.3
LG 88.5
DBAG ** 86.9
Japan 83.1
RFF 78.7
CFL 76.4
US Class I 73.2
Gysev 69.9
EVR 69.0
Network Rail *** 64.5
* Operating Ratio is defined as Operating Expenses/

Operating Revenues (%). Operating Expenses include
Depreciation and Amortization, but exclude
costs of capital (principal and interest on debt
and equity.
** Estimated from DB Annual Reports. See, e.g.

2010 Annual Report at pg 60
*** Taken from Network Rail Annual Report. See pg 1 of 14

of 2010/2011 Annual Report.
Table 9
Average Revenues Expressed as Constant 2011 US PPP $ per
Passenger-Km or per Tonne-Km
Average
Passenger Average Freight
Railway Railway
Revenue/ Revenue/ Tonne-
Passenger-Km Km
CFL 0.7520 Unifertrans 0.1593
LDZ 0.3979 ÖBB 0.1501
CFR Calatori 0.2950 Gysev 0.1357
Amtrak 0.2899 BLS Cargo 0.1224
DBAG 0.2560 CIE 0.1087
Gysev 0.2453 CFR MARFA 0.1077
NS 0.2240 FS 0.1056
SNCB/NMBS 0.2063 FGC 0.1035
ÖBB 0.2041 GFR 0.1029
CIE 0.1997 Servtrans 0.1020
SNCF 0.1931 BDZ 0.0975
ATOC 0.1878 CD 0.0842
FS 0.1682 SBB/CFF/FFS 0.0830
VIA 0.1647 DBAG * 0.0825
BLS 0.1552 BRC 0.0817
NIR 0.1525 PKP 0.0813
Japan 0.1502 IR 0.0760
SBB/CFF/FFS 0.1456 SNCB/NMBS 0.0682
LG 0.1396 SNCF 0.0626
VR 0.1375 LG 0.0609
HZ 0.1338 Japan 0.0573
SZ 0.1329 SZ 0.0566
NSB 0.1155 ZSSK Cargo 0.0558
MAV Start 0.1084 FEVE 0.0458
RENFE 0.1076 VR 0.0435
SJ 0.1044 LDZ 0.0417
FGC 0.1019 CP Carga 0.0362
PKP 0.0955 RENFE 0.0347
FEVE 0.0831 US Class I 0.0257
Euskotren 0.0818 Canada Frt 0.0236
CD 0.0810 CR 0.0232
CP 0.0720 EVR 0.0142
BDZ 0.0604 HZ 0.0100
DSB 0.0590
ZSSK 0.0483
CR ** 0.0469
IR 0.0201
* The UIC data for DB AG freight Revenues are probably contaminated

by trucking revenues generated by Schenker The average revenue shown
here is taken from data for the DB AG rail freight business group as shown
in the DB AG Annual Report for 2011.
** Estimated from 2008
Table 10
Rail Market Shares for Passengers and Freight *
Rail Passenger Rail Share (% Rail Share (%

Share (% Pass- Tonne-Km) of Tonne-Km) of Rail
Km) of Rail, Bus Truck Barge and and Truck Traffic
Country and Auto Traffic Country Pipeline Traffic Country Only
Austria Austria 34.9 Austria 41.6
Belgium 7.4 Belgium 13.7 Belgium 16.8
Denmark 9.2 Denmark 14.6 Denmark 17.9
Finland 5.0 Finland 25.8 Finland 25.9
France 9.3 France 14.4 France 16.1
Germany Germany Germany
(DBAG) 8.1 (DBAG) 22.3 (DBAG) 25.9
Greece 3.8 Greece 1.7 Greece 1.7
Ireland Ireland 1.0 Ireland 1.0
Italy 5.6 Italy 7.8 Italy 8.3
Luxembourg Luxembourg 2.9 Luxembourg 3.0
Netherlands 10.7 Netherlands 6.8 Netherlands 15.1
Portugal Portugal 15.0 Portugal 15.3
Spain 5.5 Spain 3.6 Spain 3.7
Sweden 8.8 Sweden 40.6 Sweden 40.6
UK 7.4 UK 11.3 UK 12.0
EU 15 7.0 EU 15 15.4 EU 15 17.5
Bulgaria 17.5 Bulgaria 12.5 Bulgaria 13.4
Czech Rep. 8.2 Czech 19.9 Czech 20.7
Slovakia Republic Republic
7.2 Slovak 21.0 Slovak 21.5
Estonia Republic Republic
9.9 Estonia 48.8 Estonia 48.8
Hungary 10.2 Hungary 17.9 Hungary 20.9
Latvia 27.2 Latvia 59.5 Latvia 63.8
Lithuania 1.2 Lithuania 40.6 Lithuania 41.2
Poland 5.2 Poland 18.1 Poland 19.7
Romania 30.1 Romania 27.6 Romania 35.8
Slovenia 2.7 Slovenia 63.3 Slovenia 63.3
EU 10 7.3 EU 10 23.8 EU 10 25.9
Croatia 32.1 Croatia 18.0 Croatia 21.5
Norway 4.6 Norway 15.0 Norway 17.2
Switzerland 17.5 Switzerland 39.4 Switzerland 39.7
US 0.2 US 32.3 US 39.0
Canada 0.3 Canada 44.4 Canada 64.6
China 36.4 China 26.8 China 36.4
Japan 84.2 Japan 7.9 Japan 7.9
India 14.1 India 33.2 India 35.6
* Note: This is taken from OECD website data
Table 11
Development of Railway Traffic Over Time
CAGR CAGR
1980 to 1995 to
Total Passenger-Km 1970 1975 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2011 (%) 2011 (%)
France SNCF 40 979 50 696 54 660 62 070 63 761 55 311 69 571 76 559 79 483 81 487 86 664 85 697 84 860 86 094 2.2 4.1
Germany DBAG* 62 362 66 177 63 637 65 157 61 024 70 334 74 015 72 497 74 738 74 677 76 929 75 579 77 221 77 567 0.9 0.9
UK BR/ATOC/Frt 30 409 30 256 31 704 30 256 33 191 30 000 38 200 43 100 46 100 48 800 50 800 51 500 54 600 57 500 2.9 6.1
EU 15 219 183 244 950 250 263 258 071 269 593 273 724 298 945 299 741 313 374 315 847 334 435 344 443 344 800 349 668 1.6 2.3
Czech Rep CD 8 023 7 266 6 631 6 887 6 855 6 759 6 462 6 553 6 635 na -1.7
Poland PKP 36 891 42 819 46 324 51 978 50 373 20 960 19 706 16 742 16 971 17 081 17 958 16 454 15 715 15 740 -5.0 -2.6
EU 10 101 034 109 558 119 213 133 724 131 326 68 520 54 290 47 105 47 674 46 339 46 165 40 264 38 871 38 920 -5.2 -5.0
US Amtrak 6 031 7 637 8 042 9 769 8 924 8 970 8 660 8 706 9 309 9 943 9 476 9 518 10 331 1.4 1.3
Japan Japan 189 726 215 289 193 143 197 463 237 551 248 993 240 657 245 957 249 029 255 201 253 555 244 235 244 591 245 612 1.2 -0.1
Switzerland SBB/CFF/FFS 8 168 7 984 9 167 9 381 11 049 11 712 12 835 13 830 14 267 15 132 16 142 16 182 16 868 17 156 3.0 3.5
CAGR CAGR
1980 to 1995 to
Freight Tonne-Km (000,000) 1970 1975 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2011 (%) 2011 (%)
France SNCF 67 586 63 473 68 815 55 121 50 667 48 136 55 352 40 701 40 924 40 634 35 932 26 482 22 840 23 241 -5.0 -6.4
Germany DBAG * 109 963 103 114 118 988 120 493 101 166 69 442 76 815 81 722 88 407 92 077 91 178 72 257 80 378 111 980 -0.3 4.4
UK BR/ATOC/Frt 24 550 20 960 17 640 16 047 15 986 12 537 18 090 21 700 21 880 21 180 20 630 19 060 19 230 20 000 0.6 4.3
EU 15 387 140 361 684 404 831 393 535 354 582 219 743 249 703 237 664 253 120 251 712 246 595 178 880 183 365 240 223 -2.5 0.8
Czech Rep CD 22 634 17 220 14 385 16 364 16 972 15 951 12 616 11 921 12 123 na -5.5
Poland PKP 98 233 127 505 132 576 118 863 81 776 68 206 54 015 45 438 42 651 43 548 39 200 29 941 34 327 37 189 -5.9 -5.4
EU 10 267 495 330 140 350 849 340 652 253 261 168 657 144 489 140 046 138 913 140 534 131 839 96 287 98 572 122 353 -4.9 -2.9
US Class I 1 117 386 1 101 962 1 342 598 1 281 274 1 510 629 1 907 610 2 141 768 2 478 477 2 588 741 2 586 767 2 596 542 2 256 650 2 470 556 2 526 444 3.1 2.6
Japan Japan 61 482 46 030 36 961 21 383 26 803 24 747 21 800 22 632 23 014 23 166 22 100 20 432 20 255 20 256 -2.8 -1.8
Switzerland SBB/CFF/FFS 6 592 5 139 7 385 7 049 8 303 8 156 10 658 8 571 8 439 13 368 12 531 4 181 7 778 7 656 0.2 -0.6
* Before 1993, this is the sum of DB and DR.
Table 12
Evolution of Operating Ratio and TU/Employee Over Time
Operating Ratio % 1970 1975 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011
France SNCF 100 105 104 113 107 107 98 96 96 96 96 100 93 89
RFF - - - - - - - 95 95 101 104 78 77 79
Germany DBAG * 109 122 114 111 117 99 98 95 93 92 93 94 95 95
UK BR 88 97 103 100 102 92 - - - - - - - -
Czech Rep CD - - - - - 110 109 102 101 100 111 101 102 97
Poland PKP 113 131 103 91 91 102 116 112 105 101 110 111 106 100
United States Class I 96 97 93 91 87 86 85 82 79 78 77 78 73 73
Amtrak - 210 238 198 154 180 - 156 147 146 142 - 153 150
Japan Japan 114 151 134 157 91 80 85 82 61 81 82 86 85 83
SBB/CFF/FFS 100 127 122 107 100 99 95 101 95 97 94 93 94 93
CAGR CAGR
1980 to 1995 to
TU/Employee 1970 1975 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2011 (%) 2011 (%)
France SNCF ** 358 405 485 484 566 571 713 704 739 758 774 717 707 727 1.9 2.2
Germany DBAG ** 261 269 323 348 339 474 832 700 712 721 700 616 658 671 3.5 3.2
UK BR/ATOC 200 202 204 260 363 333 1 037 1 099 1 164 8.6 12.1
Czech Rep CD 297 284 322 395 420 467 490 505 589 na 6.4
Poland PKP 375 475 492 452 393 371 403 487 474 491 470 410 470 524 0.3 3.2
US Class I 1 973 2 259 2 929 4 244 6 980 10 135 12 721 15 258 15 448 15 470 15 790 14 856 16 268 15 927 8.4 4.2
US Amtrak 685 357 364 407 374 350 450 467 490 518 493 480 515 1.8 2.9
Japan Japan 546 608 556 791 1 364 1 422 1 654 1 981 2 065 2 142 2 130 2 055 2 070 2 079 6.5 3.5
Switzerland SBB/CFF/FFS 363 321 431 443 513 593 831 863 891 1 125 1 126 798 876 868 3.4 3.5
* Prior to 1995, DB AG is the older DB

** Both SNCF and DB AG are affected by the presence of a large number of non-rail employees, which cannot be corrected for 1980 and 1995. If later years include a higher percentage of non-rail
than earlier years, then TU/Employee will look too low, and productivity growth will also look too low.
Table 13
Evolution of Railway Average Tariffs Expressed in Constant 2011 PPP$
Average Passenger Revenue/Passenger-Km Expressed in 2011 PPP International Dollars

1970 1975 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011
France SNCF 0.0478 0.0611 0.0877 0.1257 0.1249 0.1090 0.1234 0.1767 0.1761 0.1764 0.1793 0.1905 0.1908 0.1931
Germany DBAG ** 0.1079 0.1673 0.2015 0.1993 0.1906 0.1808 0.1852 0.2167 0.2080 0.2043 0.2045 0.2193 0.2266 0.2560
UK BR/ATOC 0.0332 0.0483 0.0947 0.1238 0.1479 0.1661 0.1609 0.1591 0.1615 0.1635 0.1715 0.1842 0.1832 0.1878
Czech Rep CD 0.0419 0.0749 0.0768 0.0750 0.0754 0.0722 0.0827 0.0808 0.0810
Poland PKP 0.0041 0.0558 0.0687 0.1004 0.1032 0.0855 0.0882 0.1051 0.0997 0.0955
US Amtrak 0.1174 0.1389 0.1451 0.1602 0.1510 0.1705 0.2171 0.2340 0.2505 0.2935 0.2791 0.2790 0.2899
Japan All 0.1265 - 0.2164 - - 0.1739 0.1682 0.1580 0.1553 0.1518 0.1522 0.1573 0.1502 0.1502
Switzerland SBB/CFF/FFS 0.1107 0.1355 0.1428 0.2244 0.1304 0.1356 0.1158 0.1569 0.1247 0.2016 0.1969 0.1589 0.1449 0.1456
Average Freight Revenue/Tonne-Km Expressed in 2011 PPP International Dollars

1970 1975 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2012
France SNCF 0.0458 0.0584 0.0758 0.1116 0.0942 0.0792 0.0528 0.0569 0.0546 0.0544 0.0584 0.0646 0.0642 0.0626
Germany DBAG** 0.1372 0.1755 0.1610 0.1513 0.1161 0.0900 0.0601 0.0471 0.0475 0.0536 0.0535 0.0544 0.0564 0.0587
UK BR/Frt 0.0356 0.0538 0.1075 0.1094 0.1161 na na na na na na na na na
Czech Rep CD (2003) 0.0988 0.1336 0.1062 0.0910 0.0845 0.0819 0.0751 0.0946 0.0842
Poland PKP 0.0232 0.0724 0.0825 0.0835 0.0839 0.0803 0.0846 0.0854 0.0810 0.0813
United States Class I 0.0342 0.0416 0.0458 0.0413 0.0306 0.0243 0.0185 0.0190 0.0200 0.0207 0.0232 0.0213 0.0232 0.0257 0.0263
Japan All 0.1193 0.1229 0.1718 - - 0.0800 0.0674 0.0575 0.0565 0.0557 0.0564 0.0600 0.0573 -
Switzerland SBB/CFF/FFS 0.2121 0.2823 0.2235 0.2111 0.1574 0.1279 0.0925 0.0954 0.0949 0.0753 0.0780 - 0.0883 0.0830
** Before 1995, this uses the old DB data (DR not included). Freight rates are recalculated from DB Annual Reports to remove apparent Schenker distortion.
Table 14
Evolution of Railway Market Shares
Rail Market Share (% Passenger-Km) of Rail, Auto and Bus Passenger Traffic
1970 1975 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011
France 11.0 11.2 10.0 10.5 8.8 7.0 8.1 8.3 8.6 8.7 9.3 9.2 9.1 9.3
Germany 8.8 7.7 7.1 7.4 6.3 7.4 7.7 7.6 7.7 7.7 8.0 7.9 8.0 8.1
UK 8.1 7.5 6.7 6.0 5.1 4.3 5.4 5.7 5.9 6.3 6.6 6.7 7.1 7.4
EU 15 10.4 9.5 8.5 8.1 7.0 6.6 6.9 7.0 7.2 7.3 7.6 7.9 7.8 7.0
Czech Republic 10.9 9.1 7.9 8.0 7.8 7.7 7.4 8.1 8.2
Poland 55.9 48.3 48.5 36.1 30.6 12.7 9.8 7.3 6.9 6.8 6.3 5.7 5.3 5.2
EU 10 50.1 40.1 35.8 32.6 29.1 16.2 12.3 9.0 8.6 8.3 7.8 7.3 7.0 7.3
US 0.4 0.1 0.1 0.1 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Japan 50.4 47.3 42.2 40.3 31.2 30.4 28.8 29.5 30.1 30.6 30.9 30.4
Switzerland 16.9 14.2 12.9 12.3 14.8 14.4 13.6 16.1 16.4 16.9 17.0 17.3 17.5 17.5
Rail Market Share (% Net Tonne-Km) of Rail Plus Truck Traffic

1970 1975 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011
France 50.5 42.1 39.8 39.1 30.2 22.9 23.1 17.0 17.2 17.1 17.1 16.2 14.7 16.1
Germany 47.5 36.1 33.9 32.3 37.8 22.9 21.6 23.5 24.5 25.0 25.3 23.8 25.5 25.9
UK 22.4 18.6 16.2 13.7 10.7 8.3 10.5 11.4 11.6 10.9 11.5 12.0 10.8 12.0
EU 15 32.2 23.6 21.5 20.5 20.3 15.4 15.6 14.3 15.2 15.2 15.4 14.3 14.8 15.4
Czech
Republic 44.9 30.9 25.5 23.9 25.3 23.3 22.2 21.0 20.7
Poland 86.3 79.9 75.2 76.7 67.5 57.1 41.9 29.4 28.2 25.4 23.0 18.5 18.5 19.7
EU 10 78.4 74.4 69.3 69.4 63.8 48.0 40.0 29.0 27.5 26.0 24.8 22.1 22.4 23.8
United States* 65.1 62.5 62.7 59.5 59.7 59.9 56.4 57.5 59.0 58.0 54.8 54.5
Japan 31.7 26.6 17.3 9.6 9.0 7.9 6.6 6.4 6.3 6.2 6.0 5.8 7.7 7.9
Switzerland 59.0 52.7 53.2 47.8 44.0 42.2 44.9 42.6 43.3 41.3 41.5 38.4 39.4 39.7
* US calculated on different basis using AAR statistics for rail versus intercity truck only. OECD does not provide similar data for other countries.
Table 15
Rail Liberalization Index for EU Railways
>800 Advanced
600 to 800 On Schedule
300 to 600 Delayed
<300 Pending Departure
No data LEX, ACCESS and COM Details
Overall Liberalization 2007 2011 LEX ACCESS COM

Country 2002 2004 2007 2011 Frt. Pass. Frt. Pass. 2002 2004 2007 2011 2002 2004 2007 2011 2002 2004 2007 2011
UK 805 781 827 865 848 798 862 852 960 940 969 980 740 715 791 837 780 580 793 866
DE 760 728 826 842 844 809 875 814 840 750 905 935 840 720 807 819 520 505 555 615
SE 760 729 825 872 908 742 896 855 800 680 857 960 760 760 817 850 720 510 633 577
NL 720 695 809 817 887 732 884 779 760 670 865 887 820 710 795 799 460 455 509 680
AT 430 579 788 806 852 727 873 761 680 530 819 895 410 600 781 784 240 232 349 575
DK 720 693 788 825 811 757 851 808 860 790 821 925 770 650 780 800 480 390 498 655
CH 650 677 757 741 848 662 850 680 600 605 670 678 770 710 778 756 440 495 459 509
PL 549 739 737 786 692 826 699 600 783 803 530 728 720 175 490 518
CZ 549 738 738 798 679 783 705 530 839 786 560 713 726 215 279 422
RO 722 726 797 650 834 650 822 783 697 711 440 487
PT 380 668 707 737 797 619 847 676 700 820 829 884 290 605 676 701 220 190 200 434
SK 458 700 738 756 643 793 702 535 853 857 430 662 708 260 381 381
NO 390 589 698 729 836 574 861 652 580 570 777 769 410 595 679 719 140 135 274 482
EE 257 691 729 727 667 781 701 380 728 840 205 680 702 245 704 629
LT 222 684 592 744 624 703 530 260 820 730 210 650 558 165 184 120
IT 560 688 676 737 734 617 809 706 660 740 819 795 680 670 640 722 240 225 293 470
SI 326 665 672 743 585 799 590 550 622 655 230 675 676 120 153 337
BG 652 718 761 557 806 668 722 839 635 688 241 421
LV 516 650 587 733 576 747 500 580 683 780 485 642 539 225 313 411
BE 395 461 649 753 780 518 881 663 380 425 740 820 500 475 626 737 180 180 201 424
HU 366 637 658 740 533 780 592 485 731 822 320 613 616 125 275 522
FI 410 542 636 672 732 540 753 661 620 640 732 729 440 505 612 657 160 140 145 156
ES 195 148 630 583 785 486 770 485 300 250 711 701 180 105 610 554 140 110 151 333
LU 280 467 581 585 688 474 742 508 520 530 551 669 220 440 588 564 152 120 115 104
FR 340 305 574 612 727 431 772 521 340 360 595 650 430 280 568 602 152 130 178 334
GR 210 162 559 592 690 429 698 559 260 305 619 859 240 100 544 525 100 100 133 136
IE 295 149 333 467 458 206 603 399 520 180 332 414 280 130 338 481 100 100 115 120
Sample 17 25 27 27 27 27 27 27 17 25 27 27 17 25 27 27 17 25 27 27
EU 15 484 520 681 718 769 592 808 670 613 574 744 807 507 498 665 695 310 264 325 432
EU 10 - 405 688 690 759 621 785 634 - 490 760 790 - 371 670 664 - 191 346 425
EU 25 480 683 706 765 604 799 655 545 751 800 454 667 683 239 333 429
2011 pg 12 66 67 52 59 63
2007 pg. 32 57 71 78 59 64 68
2004 pg 27 29 3
2002 pg 5 7 9 11
Note: 2002 Indices were visually estimated from graphs. Numbers shown were then calculated by multiplying the original numbers by 4, 2 and 4 respectively.
Source: Rail Liberalization Index report of indicated year
Appendix A
A Note on the Sources of Data for This Paper
The good news with railway data -- as opposed to trucking, air and water transport data -- is that
railways probably report more information in more detail than other modes. Depending on the country
and the railway (and the year) it is possible to collect all the data used in this paper along with even
more detailed data on types of service, commodities, etc. The bad news is that data taken from
different sources purporting to represent the same thing (passenger-km in a particular year) are not
always (or even often) consistent. In addition, not all railways report all data in any given year and
some railways do not bother to report at all. In some cases, restructuring has meant that most
information is lost on those parts of the railway that are established separately (Green Cargo and UK
freight operators). The net result is that most of the apparently precise information in rail data sets has
to be taken with a grain of salt and that there is a real need for action by governments and the EU to
take action to improve the quality and amount of rail data reported to the public. Thompson 2007
discusses this issue in more detail, and it should be an issue for this conference.
The basic source of EU railway information is the International Union of Railways (UIC). This
includes “Railway Time-Series Data 1970-2000,” “Railway Time-Series Data 2008” (the electronic
form was used) and various issues of the “International Railway Statistics” for 2002 through 2011.
Some of these data were manually transcribed, which may have introduced errors attributable only to
the authors and not the UIC.
The source of U.S. data for Class I freight railways is “Analysis of Class I Railroads” as published by
the Surface Transportation Board (STB). This report has existed essentially in its current form in an
unbroken series since the beginning of the 20th century. We have also used the “Public Use Carload
Waybill Sample” with added calculations of variable costs at the two-digit Standard Transportation
Commodity Code (STCC) level as furnished by the STB and processed by the Association of
American Railroads (AAR). In some cases we have used data from “Railroad Facts,” a statistical
compendium of Class I freight railroad activity published by the AAR. Amtrak data were taken from
various Amtrak statistical reports, notably the “Monthly Performance Report” for September of
various years that contain annual fiscal year data along with various Amtrak Annual Reports.
Canadian data were taken from various issues of “Railway Trends” published by the Railway
Association of Canada (RAC) and data taken from Statistics Canada as processed by the RAC.
UK data are taken from UIC reports and from various editions of “National Rail Trends Yearbook”
published by the Office of the Rail Regulator.
Chinese data are taken from “China Railways Facts 2008 edition” published by the Statistics Center of
the Ministry of Railways along with updated figures provided to us by the Ministry.
Data on Tonne-Kms and Passenger-Kms used for calculation of market shares were taken from the
OECD website.
Data on inflation indices, currency values and PPP conversion factors are taken from the World
Bank’s “World Development Indicators” that generally cover all countries over the period 1960 to
present.
For reasons of space and brevity, we have not included the full set of 33 Excel spreadsheets covering
81 railway entities (26 existing or former countries) over 41 years. These are available on request
from the authors (lou.thompson@gmail.com). The Tables presented are extracted from these
supporting spreadsheets.
Bibliography
Beck, Arne, Heiner Bente and Martin Schilling, 2013, “Railway Efficiency,” OECD
Crew, M. A., & Kleindorfer, P. R. (Eds.). (2004). Competitive transformation of the postal and
delivery sector (Vol. 46). Springer.
ECMT, (2007), “Competitive Tendering of Rail Services,” ECMT. Paris.
Gassner, K.; Popov, A.; Pushak, N. (2009). Does Private Sector Participation Improve Performance in
Electricity and Water Distribution? Trends and Policy Options; no. 6. The World Bank.
International Transport Forum (2014), “Peer Review of Freight Railway Development in Mexico,”
February 2014.
Kirchner, Christian (2011), “Rail Liberalization Index 2011,” IBM Global Business Services. Earlier
issues are 2002, 2004 and 2007.
McCullough, Gerard J. and Louis S. Thompson (2012), “A Further Look at the Staggers Act: Mining
the Available Data”, Elsevier, research in Transportation Business and Management,
10.1016/j.rtbm.2012.11.009.
Nash CA, Smith A.S.J., van de Velde, D., Mizutani, F., Uranishi, S. (2013) Structural reforms in the
railways: Incentive misalignment and cost implications. Research in Transportation Economics,
48, 16-23.
Nash, C., Nilsson, J.E., & Link, H. (2013). Comparing three models for introduction of competition
into railways. Journal of Transport Economics and Policy (JTEP), 47(2), 191-206.
Parker, D. (2004). The UK’s Privatisation Experiment: The Passage of Time Permits a Sober
Assessment. CESIFO working paper no. 1126, category 9: industrial organization.
Thompson, Louis S. (2007), “Railway Accounts for Effective Regulation,” ECMT
Thompson, Louis S. (2013), “Recent Developments in Rail Transportation Services,” OECD
Van de Velde, D., C. Nash, Smith, A.; Mizutani, F., Uranishi, S.; Lijesen, M.; Zschoche, F. (2012),
EVES-Rail - Economic effects of Vertical Separation in the railway sector Amsterdam/Brussels.
Publisher: inno-V (Amsterdam) in cooperation with University of Leeds – ITS, Kobe
University, VU Amsterdam University and Civity Management Consultants.
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Freight Share in the United States than in Europe,” Harvard University Research Working Paper
Series WP05-15.
International Transport Forum
2 rue André Pascal
75775 Paris Cedex 16
itf.contact@oecd.org
www.internationaltransportforum.org

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What is Rail Efficiency

and How Can it Be Changed?

Discussion Paper 2014-23

Prepared for the Roundtable:

18-19 November 2014,

The International Transport Forum at the OECD is an intergovernmental organisation with

1. Defining Efficiency in a General Sense .......................................................... 4

2. Indicators Available From Published Data ..................................................... 5

3. Initial Rankings Based on Cross-Sectional Comparisons and Initial

1. Defining Efficiency in a General Sense

2. Indicators Available From Published Data1

o Passenger data: Passengers carried3, Passenger-Kms, Gross Tonne-Kms for passenger

o Common or joint assets: Locomotives, Labor, Kms of Line;

 Ratios of efficiency and productivity developed from the measures above:

o Average trip length for passengers (Passenger-Kms/Passengers), and average length of

o Passenger share of Traffic Units (TU): Passenger-Kms/(Passenger-Kms + Tonne-Kms).

o Passenger share of Gross Tonne-Kms: (Passenger GT-Km/(Passenger GT-Kms+Freight

o Passenger share of Train-Kms: Passenger Train-Kms/(Pass. Train-Kms+Frt Train-Kms).

o Coach Productivity: Passenger-Kms/(Coaches+ DMUs+EMUs). Table 6.

o Wagon Productivity: Tonne-Kms/Wagon. Table 6

o Locomotive Usage: TU/(Locomotives + MU factor)5 Table 6.

o Labor productivity: TU/Employees, Gross Tonne-Kms/Employees and Train-

o Operating Ratio: Operating Cost/Operating Revenue. This is a commonly used measure

3. Initial Rankings Based on Cross-Sectional Comparisons and

 Table 7 shows output per employee as measured by TU/Employee, Gross Tonne-Kms/Employee

4. How Can Efficiency Be Changed?

One way to change efficiency, much favored by traditional, engineering-dominated railway

5. Did Any of These Changes Work?

In Canada, privatization of CN produced a change in relative productivity of CN with CP (always

Figure 2. Canadian Freight Railways

Tariff and Labor Index Operating Ratio

Source: Railway Association of Canada.

Figure 3. Changes at JNR at Privatization

Output/Employee Operating Ratio

Source: Author's analysis and UIC Railway Time Series, 1970-2000.

Figure 4. Rail Traffic in the UK

Source: SRA 2002c and SRA, 2003a, WDI, UIC, ORR.

Figure 5. UK Passenger-Km, Ton-Km and GDP

Source: SRA and UK Treasury website.

 An audit of railway management performance (be it in a domestic or an international context);

 An inter-governmental policy evaluation and benchmarking effort

As a consequence, and to the frustration of many industry observers, cross-sectional measurements of

 Inconsistency of input data, including unclear definitions;

 An inability of econometric models to discriminate between "good" or "poor" corporate

 Scope of the railway system;

Table 1. Sample Key

Railway name and Railway name and

Table 3. Average Length of Haul (Km) (2011 data)

Source: See Appendix A

Source: See Appendix A

* SNCF adjusted for non-rail employees (1.079)

Railway Operating Ratio*

* Operating Ratio is defined as Operating Expenses/

** Estimated from DB Annual Reports. See, e.g.

*** Taken from Network Rail Annual Report. See pg 1 of 14

Source: See Appendix A

* The UIC data for DB AG freight Revenues are probably contaminated

** Estimated from 2008

Source: See Appendix A