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Market Entry and the Change in Rail Transport Market when Domestic Freight Transport Opens to Competition in Finland

Research output: Book/ReportDoctoral thesisMonograph

Details

Original languageEnglish
PublisherTampere University of Technology
Number of pages193
ISBN (Electronic)978-952-15-1907-9
ISBN (Print)978-952-15-1887-4
Publication statusPublished - 7 Dec 2007
Publication typeG4 Doctoral dissertation (monograph)

Publication series

NameTampere University of Technology. Publication
PublisherTampere University of Technology
Volume702
ISSN (Print)1459-2045

Abstract

Domestic rail freight transport was opened to competition as of the beginning of 2007. This means that all operators who meet the regulations can enter the rail freight transport market and operate rail transport. The purpose of this research was to study the market entry of new entrants, and the barriers related to it. The research also set out to evaluate the change in the rail transport market and the equal realisation of competition prerequisites.

The Finnish railway legislation, which is based on EC legislation, states that the conditions for operating rail traffic include a safety certificate, an operating licence, the allocated rail capacity, and a rail network access contract. The government has an important role in creating a non-discriminatory playing field, as the conditions of perfect competition cannot be achieved. The market entry barriers and the actions of a dominant company also have a big effect on the functionality of competition.

The research material consisted of answers gathered from an expert panel, comprising over 50 persons, using the Delphi method and two question rounds. The analysis of the research material was conducted using qualitative content analysis and a narrative approach, and scenario-based working methods typical for futures studies. The material was analysed to form expert profiles and their character descriptions, and scenarios that describe the market entry of different types of railway undertakings. This type of triangulation is new in this sector and helps to highlight new aspects of the examined phenomenon. The research results were evaluated by mirroring them on the results of the special evaluation inter-views.

Based on this research, railway stock acquisition and the difficulty of accessing the services create the greatest barriers to market entry. Other entry barriers include a long market entry phase, recruiting staff, inadequate rail capacity, and the possible actions of the market dominating company which complicate market entry and competition. The research results show that there will be more competition in rail freight transport than expected. The most significant scientific contribution of the study is the clustering of administrative factors into one entity that creates a substantial entry barrier in addition to financial and technical issues. The authorities are expected to be active, more customer-friendly and quick, instead of the passiveness they have shown so far.

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