Railway Companies

Who will be the leader?

Last week, VTG announced an intention of merger of VTG and Kuehne + Nagel in rail logistics which will cover whole Europe, Russia and Turkey. This means, within a year, there’ll be no more Kuehne + Nagel nor Transpetrol flags on rails, but the new company’s.

Beside the deep impacts of this merger in Europe, the question in Turkey will be what will be the market shares of operators in Europe-Turkey conventional traffic after this merger.

Kuehne + Nagel and Transpetrol, in total, has a considerable traffic in Turkey in 2012. Both renewed its partners in Turkey and applied aggressive marketing especially in the second half of the year. The critical point for them is if 1 + 1 will be more or less than 2.

Express Interfracht, having a very different marketing strategies compared with the other “foreign” railway groups and not dealing with the loads in “red ocean”, it will hardly be affected from this merge in short term.

Performance of Schenker, competing both with Kuehne + Nagel and Transpetrol directly in the same tenders, will play an important role in following days. Parquet, paper and pipes will be the field of market share wars.

Of course, each party will use its own strength in European part. However, during the second half of 2013, maybe the most important stress test will be in Turkish part. Halkalı is about to close for a few months.  Çerkezköy, the most likely alternative, means additional trucking cost and limited service compared with Halkalı. Derince may be another alternative depending on the success of ferry service, which also means additional ferry cost and reorganization of terminal services.

So the competiton between the operators will mostly be affected by the preferences, corporation and capability of managing the customers during this hard period.

It will surely be a hot summer for railway professionals in Turkey this year.



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