Germany Freight Transport Report 2007

The German government on November 9 started on its last big privatisation after the Christian Democrats and Social Democrats ended months of haggling and agreed to float state railway Deutsche Bahn (DB) by 2009. Lawmakers 'agreed to sell the railway without its track', Wolfgang Tiefensee, transport minister, said. 'We may go ahead with a sale of as much as 49% in 2008 or 2009.' Partial privatisation may attract new investment into rail freight. More widely, moderate growth appears to be the order of the day for Europe's largest economy as its 'grand coalition' government, pursues a policy of reforms by consensus, designed to bring the fiscal deficit under control and to inject greater dynamism into activity levels. BMI's newly released Germany Freight Transport Report concludes that freight traffic (measured in million tons/kilometre, mntkm) will grow at an annual average of 1.3% in 2007-2011. This is a shade slower than the economy as a whole, which we expect to expand by 1.4% per annum over the same period. This pattern, where freight growth is a little slower than GDP, is typical of developed economies. Reforms and structural change will be important issues facing the industry. The pace of change will be relatively measured, however. Under approved plans, rail freight is expected to take some of the strain off the roads, through a variety of mechanisms and initiatives including increased reliance on road pricing, encouragement of inter-modal transport hubs and development of intelligent traffic systems (ITS). BMI predicts, however, that road haulage will grow by 1.3% per annum and actually increase its share of total freight traffic to 72%. Rail freight will grow by 1.2% per annum and maintain its share of the total fairly constant at 16-17%. Among the other modes, sea cargo will grow by 1.6%, supported by Germany's strong international trade, while airfreight will expand by 1.7 per annum, thanks to a steady performance by Deutsche Lufthansa.

The operating environment for transportation companies will evolve favourably, and will set the scene for a fairly positive period going forward. We score the overall freight industry operating environment at 43 (out of a theoretical total of 70 and above the average for the G-7 economies which stands at 41). That said, Germany's regulatory and competitive environments, important components of the overall rating, still present scope for improvement, given the plethora of taxes and regulations that add to operating costs. Despite this, the German freight industry can continue to count on world class companies with a deserved reputation for quality and attention to detail.

Across all modes the scene is set for moderate growth and development. With Germany acting as a key European manufacturing and trading hub, BMI forecasts that its transport and communications sector will grow to a value of US$249.9bn by 2011, equivalent to 7.5% of GDP.