Official Journal of the European Union

C 221/13

Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council on compensation in cases of non-compliance with contractual quality requirements for rail freight services

(COM(2004) 144 final — 2004/0050 (COD))

(2005/C 221/03)

On 28 April 2004 the Council decided to consult the European Economic and Social Committee, under Article 71 of the Treaty establishing the European Community, on the abovementioned proposal.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 17 January 2005. The rapporteur was Mr Chagas.

At its 414th plenary session (meeting of 9 February 2005) the Committee adopted the following opinion by 130 votes with 2 abstentions:

1.   Introduction


The present proposal forms part of the third railway package, which was adopted by the European Commission on 3 March 2004. The other components are:

Amendment of Directive 91/440/EEC: liberalisation of international rail-passenger transport (COM(2004) 139 final).

Proposal for a Regulation of the European Parliament and of the Council on international rail passengers' rights and obligations (COM(2004) 143 final).

Proposal for a Regulation on compensation and quality requirements for rail-freight services (COM(2004) 144 final),


Commission Communication on further integration of the European rail system (COM(2004) 140 final).

Commission staff working paper on gradually opening up the market for international passenger services by rail (SEC(2004) 236).


The first railway package (also called the infrastructure package) came into force on 15 March 2001 and had to be transposed into national legislation by 15 March 2003. It comprises the following components:

Amendment of Directive 91/440/EEC, including free market access for international rail freight on the trans-European rail freight network by 15 March 2003 and liberalisation of all international rail freight by 15 March 2008 (1).

Extension of the scope of the Directive on a European licence for railway undertakings (amendment of Directive 95/18/EC) (2).

Harmonisation of the provisions governing the allocation of railway-infrastructure capacity and the levying of charges for the use of railway infrastructure and safety certification (replaces Directive 95/19/EC) (3).


In October 2003 the European Commission took nine Member States to the European Court of Justice for failing to notify the transposition of the first railway package into national law. By May 2004 five countries' notification had still not been received and two Member States had transposed only some of the provisions into national law.


The second railway package was published in the Official Journal of the European Community on 30 April 2004 and has to be transposed into national law by 30 April 2006. It comprises the following components:

Amendment of Directive 91/440/EC: bringing forward free market access for international rail freight to 1 January 2006 and liberalisation of national rail freight, including cabotage, from 1 January 2007 (4).

Directive on railway safety in the Community (5).

Regulation establishing a European Railway Agency (6).

Amendment of the Directives on the interoperability of the high-speed rail system (96/48/EC) and the conventional rail system (2001/16/EC) (7).


The first and second railway packages provided the legal basis for establishing a single rail-freight market. The measures encompass market access, the licensing and safety certification of railway undertakings, access to infrastructure and the calculation of charges for its use, the creation of a legal framework for rail safety, and measures for ensuring the technical interoperability of the rail system.


This proposal adds to the legal framework already in place to open up the market through measures to improve the quality of freight transport.

2.   The Commission proposal


The proposal for a regulation on quality in freight transport is intended to improve rail freight transport by means of a contractual agreement on compensation between railway undertakings and freight customers. The Commission considers that the main cause for the modest share of railways in the increase in freight transport levels and its declining market share compared with other modes is the lack of quality and reliability of rail freight transport.


The Commission expects that the application of the compensation scheme will provide an incentive to railway undertakings to enhance the efficiency of rail freight services. Its premise is that over time competition will exert a strong pressure to improve quality, but, in the Commission's view, a real opening-up of the European rail freight market is not happening quickly enough. New entrant railway undertakings account for only 3 to 4 % of the market, and, in several Member States, there are no competitors.


The proposed regulation obliges railway undertakings and customers to stipulate quality requirements in the transport contracts and, in the case of non-compliance, to make compensation payments. The contractual parties are obliged to agree on at least the following quality requirements:

times of hand-over of goods, wagons or trains,

arrival time and compensation for delays,

compensation in the event of losses or damage of goods,

compensation in the event of cancellation of a train by the railway undertaking or the freight customer,

a quality monitoring system.


The proposed regulation stipulates maximum and minimum compensation levels in the event of loss, damage, delay, lack of information about delays, and loss of or damage to goods due to delay. In the case of damage, for example, it stipulates an amount of maximum €75 per kilogramme of gross mass damaged. In the case of delays of block trains, compensation is fixed at no less than 5 % and no more than 25 % of the transport price. In the case of lack of information about delays, compensation is at least 5 % of the transport price.


The contractual parties are obliged to stipulate compensations for a train cancellation by the railway undertaking or the freight customer. They may agree compensation in the case of a declaration of value of the goods transported or in the case of a declaration of interest in delivery.


Liability is excluded in the case of fault of one of the contractual parties, fault or any other act of a third person, force majeure or circumstances that could not be avoided and whose consequences could not be prevented. If compensation claim arises due to the fault of the infrastructure manager, the railway undertaking pays and claims the payment back from the infrastructure manager.


If several railway undertakings are involved, all the undertakings are ‘joint and severally liable’ regardless of the undertaking under which the delay or damage occurred.

3.   Remarks on the Commission proposal


In order to promote a sustainable transport system and secure a balance between transport modes, as set out in the White Paper on European Transport Policy for 2010, the Community has set itself an objective of increasing the share of freight transport by rail. Improving the quality of service in rail freight transport is one of many approaches to achieving that objective and is in principle to be welcomed.


The Commission proposes a system of incentives under which the desire to avoid compensation payments is supposed to boost quality and, in particular, improve punctuality. Usually, operators' first reaction to increased financial risk from possible compensation payments is to raise prices.


The question arises as to whether the Commission's proposed approach is appropriate.


The scope covers both international and national transport. The Commission itself writes in its explanatory memorandum to the proposed regulation that quality contracts are already in existence mainly in national transport, and less so in international transport. Elsewhere the Commission notes that problems chiefly occur if several railway undertakings are involved, which is the case primarily in international transport.


The question is whether, given intrusion into the contractual arrangements of commercial partners (this is not a question of consumer protection) a more restricted scope would be more appropriate for international freight transport.


Consideration should also be given to what positive incentives are available instead of established compensation payments via an EU regulation which would be unique for the railway sector and additional to the already existing international Convention COTIF (CIM). For example, Article 11 of Directive 2001/14/EC provides for bonuses in infrastructure charges if an undertaking takes steps to help minimise disruption and improve the performance of the system.


In promoting rail freight transport, it is vital to avoid discriminatory treatment of the different competing transport modes.


This raises the question of what comparable Community provisions are in place for air freight transport and road freight transport. International agreements on compensation for damage or loss provide for substantially lower rates (the Montreal Convention on air transport for one third of the maximum amount provided for in the regulation, the Convention on the Contract for the International Carriage of Goods by Road [CMR] for one sixth of the maximum amount).


The relationship between the quality monitoring system to be agreed upon by the contractual parties and the technical specification for interoperability (TSI) for freight telematic applications remains unclear. Europe-wide real-time electronic monitoring of freight movements by rail is covered in the TSI for freight telematics applications. The harmonised technical specifications and communication conditions are defined in this provision. However, its application and implementation still require substantial investment and will take many years.


Under the proposal, a railway undertaking can claim a refund of compensation payments from the infrastructure manager if the latter has been the cause of delay.


Here again, attempts to circumvent this are likely by raising the route price (risk supplements) and incorporating margins for delay in scheduling. Given limited infrastructure capacities, this would not be a desirable response. It has already been seen in the air transport sector since the entry into force of the directive on passenger compensation. The calculation of risk will be considerably complicated for infrastructure managers as they do not know, and cannot influence, the value of the flow of goods and the resultant compensation.


It should be borne in mind that the infrastructure in the new Member States in central and eastern Europe is in a poorer condition, requiring substantial investment, and that the compensation obligations in the regulation could cause considerable difficulties.


The proposal involves considerable effort in determining who is responsible for what, and in compensation claims by the railway undertaking against the infrastructure manager. Allocating responsibility will also be onerous if several railway undertakings are involved.


The perspective of having to pay high compensations shall not, as a consequence, lead the railway undertakings to compromise safety in order to respect delivery terms. Also, it shall be excluded that railway undertakings put excessive pressure on their employees with the risk to neglect working, driving and rest time.


In its opinion on the second railway package, the EESC has already pointed out that the social conditions in road transport place rail freight transport at a competitive disadvantage. The consequence of that cannot be to bring working conditions in rail transport into line with those of the roads and to encourage railway undertakings to flout the rules and exert pressure on the workforce.

4.   Conclusions


The EESC welcomes in principle measures to improve the quality of rail freight transport.


Positive incentives would be preferable to strict compensation arrangements, leading to attempts to circumvent the rules and spawning a complicated refund system. This applies particularly to the role of the infrastructure manager.


Measures to improve the quality of rail freight transport must not discriminate against other transport modes.


The EESC asks the Commission to examine the impact of the measures on undertakings and infrastructure managers in the new Member States.


The EESC insists that measures to improve freight transport quality must not result in undertakings trying to circumvent the rules at the expense of safety and working conditions.

Brussels, 9 February 2005.

The President of the

European Economic and Social Committee

Anne-Marie SIGMUND

(1)  Directive 2001/12/EC – OJ L 75 of 15.3.2001, p. 1 – EESC opinion – OJ C 209 of 22.7.1999, p. 22

(2)  Directive 2001/13/EC – OJ L 75 of 15.3.2001, p. 26 – EESC opinion – OJ C 209 of 22.7.1999, p. 22

(3)  Directive 2001/14/EC – OJ L 75 of 15.3.2001, p. 29 – EESC opinion – OJ C 209 of 22.7.1999, p. 22

(4)  Directive 2004/51/EC – OJ L 164 of 30.4.2004, p. 164 – EESC opinion – OJ C 61 of 14.3.2003, p. 131

(5)  Directive 2004/49/EC – OJ L 164 of 30.4.2004, p. 44 – EESC opinion – OJ C 61 of 14.3.2003, p. 131

(6)  Regulation (EC) No 881/2004 – OJ L 164 of 30.4.2004, p. 1 – EESC opinion – OJ C 61 of 14.3.2003, p. 131

(7)  Directive 2004/50/EC – OJ L 164 of 30.4.2004, p. 114 – EESC opinion – OJ C 61 of 14.3.2003, p. 131