Who Survives Rail Competition? Inside Europe’s Most Uneven Freight Markets

Europe’s rail freight sector operates under a common EU regulatory framework, yet its national markets continue to deliver sharply different outcomes.

Across the EU, rail freight operators face similar pressures: weak industrial output, infrastructure congestion, extensive construction works, and strong competition from road haulage. However, as national regulators and industry bodies repeatedly note, market structure and the role of incumbents largely determine whether competition leads to efficiency or to financial erosion.

In Poland, competition has intensified to the point of fragmentation. In France, the market is formally open but still shaped by decades of state support for the incumbent. Meanwhile, Italy presents a more coordinated model where competition exists without destabilising the sector as a whole.

Proud to announce the publication of a paper, part of a long-term research on rail fares and liberalisation effects.
The paper, done in collaboration with Evgeniia Shtele and Samuel Tolentino, is now on the @Transport_ELS Journal of Rail Transport Planning & Management! pic.twitter.com/ZHddshRHsO

— Paolo Beria (@beriapaolo) October 16, 2024

Poland: Competition Without Margins

Poland is one of Europe’s most competitive rail freight markets by sheer number of operators. According to data from the Office of Rail Transport, rail freight volumes declined in 2024, showing weaker industrial demand and network constraints. Despite the downturn, the number of active carriers remains high, intensifying price competition across key corridors.

This fragmentation has had a direct impact on profitability. Market analyses show that operators increasingly compete on price rather than service differentiation, compressing margins even in core bulk and intermodal segments. The pressure is most visible at PKP Cargo, which has seen its financial position deteriorate amid falling traffic and rising operating costs.

PKP Cargo’s own reporting, drawing on regulator statistics, shows a steady erosion of its market position over recent years. While private operators have captured traffic, the overall market has struggled to generate sustainable returns. According to sector assessments, Poland has become a textbook example of high competition in a shrinking market, where efficiency gains are outweighed by destructive pricing dynamics.

France: Liberalised, but Structurally Constrained

France offers a very different case.  Until the end of 2024, France’s rail freight market was dominated by Fret SNCF, the historical state-owned operator. However, this structure was fundamentally altered following a decision by the European Commission, which ruled that long-term state support for Fret SNCF constituted incompatible state aid under EU competition law.

As a result, Fret SNCF ceased operations on 31 December 2024. From 1 January 2025, parts of its freight activities were transferred to newly created successor entities, most notably Hexafret, while certain technical and maintenance functions were separated into other structures. This process did not represent a conventional market exit, but rather a regulatory dismantling and reallocation of activity, carried out under EU supervision.

According to the Autorité de régulation des transports, the French freight market entered this transition phase with a high degree of concentration inherited from the former incumbent. While the restructuring formally resets competitive conditions, regulators and industry observers note that effective competition remains constrained by persistent issues, such as limited infrastructure availability, path allocation challenges, and network reliability.

Private operators have expanded their presence in recent years, but their growth has largely been confined to specific segments and corridors. Analysts caution that the disappearance of the historical incumbent does not automatically translate into a level playing field: the structural characteristics of the network, rather than ownership alone, continue to shape market outcomes.

France, therefore, represents neither a fully liberalised success story nor a case of unchecked incumbent dominance, but a post-incumbent market in transition, where competition is being rebuilt through regulatory intervention rather than organic market evolution.

Italy: Managed Competition with Intermodal Strength

Italy stands apart as a comparatively balanced freight rail market. According to assessments by Fermerci, rail freight has benefited from a strong intermodal focus and closer alignment between infrastructure planning and logistics demand.

The incumbent group, Mercitalia Rail, continues to play a central role, but without crowding out private competitors to the same extent seen elsewhere. Trade press reporting indicates that market shares have remained relatively stable, suggesting that competition has not triggered the same margin collapse observed in Poland.

Financial disclosures by FS Group show the importance of investment in terminals, corridors, and rolling stock, particularly for combined transport. Analysts note that Italy’s freight market benefits from clearer segmentation between bulk, intermodal, and high-value flows, allowing operators to compete on service quality rather than price alone. While challenges remain, Italy proves that competition does not inevitably lead to financial instability when supported by infrastructure capacity and policy coherence.

Why This Matters Beyond National Borders

As European policymakers continue to push for modal shift, these cases carry implications far beyond their borders. Markets that allow competition to erode margins risk long-term capacity loss. Those that delay structural reform face prolonged distortion. And those that align policy, infrastructure, and operations stand a better chance of preserving rail freight as a viable alternative to road transport.

For countries where private operators are gaining market share while overall profitability declines, the experiences of Poland, France, and Italy offer a clear warning: liberalisation is not a strategy in itself. Without reliable infrastructure, fair access, and realistic cost recovery, competition alone cannot secure rail freight’s future.