Norwegian open access freight carrier “closes shop”. Background. Search for reasons.

NORWEGIAN open-access rail freight operator Cargolink ceased operations on February 11, 2016 as the company’s board decided to file for insolvency.

I have confirmed this News report by checking multiple sources, including the IRJ.

Like IKEA, Cargolink was heavily focused on moving cargo as if a subsidiary of another industry.

First operating its trains in November of 2008, Cargolink operated selected cargo freight trains across Norway from the terminal at Alnabru in Oslo to Bergen, Trondheim, Stavanger and Åndalsnes. It sought to build upon the open access concept that supposedly favored new entrants as competition to the established national rail train operating divisions.

That European rail model isn’t working out as well as originally expected. There have been some successes. This is a noted failure.

What does the closing tell us as rail economists? ========

Cargolink AS as a Norwegian railway company was initially organized and owned by the automotive distribution company Autolink.

Autolink, was at the time the largest distributor of automobiles in Norway, and had previously bought train services from the national rail operation trade named as CargoNet.

Cargolink focused on moving both autorack and container trains since November 2008.

Cargolink has a fleet of ten diesel locomotives, five shunters, 100 autoracks and 60 container cars. Its combined autorack and container trains were typically operated up to five times per week along the Sørland-, Bergen-, Rauma-, Røros- and Nordland lines into parts of Sweden.

The company at one time transports as many as 55,000 automotive cars annually using about 600 trains. It had reported at one time rail revenue of NOK 65 million.

LACK OF CRITICAL MASS?

In 2015 it reported that its traffic formal of 2014 was 13 400 TEUs = 6700 trailers, 340 000 tons —amounting to just 30 equivalent trailer trucks per day. Many of its trains operated with fewer than 15 of 40 foot length trailers/containers per train.

In 2015, the company made a presentation citing among its problems: 1) short sidings and resulting short freight trains; 2) Low priority for freights in a passenger rail culture; 3) both snow and water on tracks periodicity recurring track maintenance schedule interruptions;

Its primary customer Autolink was at one time responsible for about three-quarters of all new-car distribution in the country. On the weekly return trips from Northern Norway, Cargolink had used the empty cars to transport aluminum from Elkem Mosjøen.

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In a statement, Cargolink said this week that “it has struggled financially in the face of challenging competitive conditions.” At it closes, the company employed 70 staff. That is down from 100 reported in 2014. ======

There is about 25 million to 27 million tons of annual rail cargo to compete for. Rail handles less than 15% of all of Norway’s annual cargo. //////



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