Why Do Open Rail Freight Markets Fail to Attract Competition? Analysis on Finnish Transport Policy

Abstract

Since the beginning of 2007, EU legislation has encouraged member states to deregulate their domestic rail freight markets. While many countries have benefited from the resultant liberalisation, in others, markets are changing fairly slowly. The incumbent railway undertaking has a total market share e.g. in Lithuania, Ireland, and Finland. This paper analyses Finnish transport policy as well as the question why deregulation has not brought competition to the rail freight transport market. The research material was collected by using the Delphi technique. This paper illustrates that competition is expected in Finland, and there is a need for structural changes. Market inequality is manifested in access to incumbent’s services, governmental inactivity on market entry as well as in competition in general, traffic control organisation, and personnel training. This paper suggests that governments and governmental authorities should have an active transport policy in order to create a level playing field which could be a basis for equal and stimulating competition.