GENERATION RAIL Y E ST E R D AY. TO D AY. TO M O R R O W.

1825 The world's first train line is opened between the English towns of Stockton and Darlington. British engineer George Stephenson oversees its construction. From the 1830s Screw couplings are introduced, initially on the London to Birmingham line. 1835 The first German train line is opened: a six-kilometer stretch from Nuremberg to Fürth. From 1868 Self­unloading fixtures replace manual labor and cranes for the transshipment of bulk goods. 1860 Prussia's private railway company commissions the first all­steel wagons. The first freight wagons were made almost entirely of wood. 1837 The first rail link in the Habsburg Empire runs between Florisdorf (now Vienna) and Deutsch­Wagram. 1951 VTG Vereinigte Tanklager und Transportmittel GmbH is set up with its headquarters in Hamburg. It became a joint stock corporation (AG) in 2004. 1955 Work begins on the development of central buffer couplings (CBCs) for use in Europe. 1960s The Unicupler AK69e, slated to become the standard European coupling, is developed but never deployed on a wide scale. WHAT’S NEXT? Ecology Shifting more and more goods from road to rail is essential if the transport transition is to succeed. Rail freight is thus a pivotal factor in containing climate change and will require massive government investment. Technology The future technological development of rail freight will be dominated by two trends: digitalization and modularization. In both cases, the focus is on issues such as more reliable transport planning and stepping up combined transport. Economy A key challenge for rail freight in the years ahead will be to develop it as a platform economy. To position rail as an attractive alternative to road haulage, all industry players will need to cooperate closely.

Dear reader, Without change there is no future. This is perhaps the lowest common denominator for how all life on Earth works. Since everything is connected to everything else, as Alexander von Humboldt discovered, changes to one element necessarily trigger a ripple of reactions. And in the turbulent times in which we live, where complex geopolitical developments have a lasting impact on all areas of life, this dictum remains as valid as ever. Today, mitigating climate change and upholding reliable supply lines are global, indeed existential issues that can be mastered only through innovative ideas and international partnerships. Like the generations before us and those yet to come, we too must rise to the challenge of change – thinking up new ways forward and then continually rethinking them. The climate itself has changed many times over the eons of Earth's history. Past warm periods and ice ages had natural causes, such as shifts in the planet’s solar orbit or its own axis of rotation. Since the dawn of the Industrial Age, however, the science is clear that temperatures have followed a steep upward curve attributable to anthropogenic amplification of the greenhouse effect. The transport sector – the third-largest source of greenhouse gas emissions – will play a key role in rapidly and drastically reducing CO2 emissions in the years ahead and, thereby, in mitigating climate change. This year, we are commemorating 150 years of private-sector wagon leasing in Europe – a story that began in Vienna in 1872, and that VTG, the Hamburg-based European market leader today, has been instrumental in shaping. Wagon leasing is a timeless business model that has played a large part in establishing rail freight as a force to be reckoned with. To this day, its cross-sector and international mindset and approach have done much to facilitate the peaceful convergence of Europe's economic space. Moreover, since the early days of railroads, rail has transformed itself into an environmentally friendly mode of transport, one that now enables large volumes of vital goods and commodities to be carried safely and sustainably over large distances – an achievement of supreme importance, not only during pandemics. Yet even as we look back, we are also looking forward, because sustainable, innovative and efficient rail freight transport is indispensable if we are to meet our climate targets. Drawing on the accumulated expertise of past generations of rail, we want today's ‘Generation Rail’ to move boldly ahead in partnership with policymakers, industry and society to help make the future livable for the generations to come. We wish you an enjoyable and enlightening read! Oksana Janssen, Mark Stevenson, Sven Wellbrock

SHAPING THE TRANSITION DRIVING THE FUTURE Storming down the track The early days of rail at once stoked the economy and fired the imagination. From mental shift to modal shift The modal shift begins in the mind: The transport transition needs more goods on the rails. Rail gets smart Digitalization and artificial intelligence are behind an unprecedented surge in innovation. Coupling – An affair of the heart Introducing the DAC could put Europe in the forefront of global innovation. 70 74 From iron horse to steely climate defender Small steps have ushered in a revolution since the first trains wheezed their way across Europe. 78 Already ‘fit for 55’ Combined transport is a beacon of hope in the fight against climate change. Mitigating climate change for lasting success On track: VTG is working hard to be climate neutral by 2040. 80 Rail becomes a platform industry Digital platforms will bring radical change to the transport and logistics industry. 92 100 104 106 Climate change – A driver of progress Rail must turn the momentum generated by the climate debate to its own advantage. What matters right now Rail freight’s huge potential to help mitigate climate change must now be tapped. The future is up and running Rail freight could in future travel autonomously and underground. 110 What now? Experts look ahead and highlight the issues that must be addressed as a matter of urgency. 116 82 87 Standards Editorial Publishing information 1 115 T O D A Y. 3 T O M O R R O W .

CHARTING OURSE “A journey of a Confucius Chinese philosopher ca. *551 BC, † 479 BC thousand miles begins with a single step.”

T he Grand Duchy of Oldenburg was a poor, mostly agrarian region. For 15 years, its railway company GOE therefore did not have the means to invest in new freight wagons, despite brisk demand for transportation in the early 1890s. Part of the solution came from Brus- sels, home of the Compagnie auxiliaire in- ternationale de Chemins de fer belge (CAIB), one of the first private-sector wagon leasing companies with an international focus. Its biggest customer was the Prinz Heinrich Railway Company in the Grand Duchy of Luxembourg, although it also leased plenty of wagons to Austro-Hungary and to other regional railway players in Germany. GOE hired 25 covered freight wagons from CAIB and ordered a further 100 from Ludewig & Lange, a wagon leasing firm in A unique success story The celebration of 150 years of private-sector wagon leasing in Europe coincides with the 150th anniversary of our Austrian subsidiary VTG Austria, whose roots go back to a company founded in Austria in 1872. The wagon leasing company EEL AG was set up – together with an adjacent wagon repair shop – at Deutsch-Wagram, Austria’s oldest railway station, on February 24, 1872. Around 20 years later, this company was transformed into OEVA AG. OEVA became part of the Brambles Group in 1986, and this group’s wagon leasing activities were acquired by VTG AG in 2002. Berlin. The latter wagons were likewise built in Belgium. Building and hiring out standard freight wagons was the business idea that launched private-sector wagon leasing operations in the 19th century. This business complemented the transport vol- umes carried by Europe’s state-owned rail- ways, though no distinctions were drawn between the two. Not until tariff regula- tions were altered in 1903 was a turning point reached: From now on, privately owned freight wagons were only allowed to transport goods that were not part of national railways’ bulk freight business – which, at this time, consisted solely of tank cars for petroleum and chemical products. The private-sector wagon leasing firms thus set out in search of new lines of business – and found them all over Europe. SPECIAL WAGONS FOR EUROPE West of the Ruhr region, the industrial heartland of the German Empire, lay the Netherlands with its prominent meat in- dustry. Rotterdam boasted the largest cold store in Europe. The Netherlands had meat but lacked the refrigerated wagons to trans- port it. The Austrian state railway company had run initial tests in its home country; and it was another Austrian company – OEVA – that became the first private-sector wagon leasing firm to run with this idea and offer refrigerated wagons to carry meat around Europe. OEVA’s Berlin-based subsidiary DWL T O D A Y. 7 T O M O R R O W .

EVA’s wagon factory in Wismar, a new gen- eration of refrigerated wagons was built to shuttle back and forth between the compa- ny’s cold stores in Leipzig, Berlin, Hamburg and the meat markets. Fresh meat was also imported from the newly created Balkan states. At peak times, EVA would run as many as a thousand refrigerated wagons across Europe. By the mid-1930s, the OEVA Group and its German subsidiary EVA had grown to become “by far the largest European wagon leasing company”, according to press reports at the time. With World War II approaching, the industry shifted from hiring out traditional standard wagons to providing the modern, special-purpose wagons that were becoming increasingly important to its European business. A ‘GENERAL CHARTER’ FOR EUROPE Shortly before the European Economic Community (EEC) was founded, the Inter- national Union of Private Wagon Owners (UIP) was established as a European um- brella organization. Alongside VAP and VPI, private-sector wagon leasing companies in Europe thus now had a third voice speaking for them. Together, UIP and UIC wanted to establish a ‘General Charter’ by revising the Regulations Concerning the International Carriage of Private Freight Wagons (RIP) that had been valid since 1938. In early 1958, when the EEC came into being, a new set of ‘Provisions Relating to Privately Owned Freight Wagons’ therefore took effect. Collaboration on tariffs, transport, logistics and now standardization as well became more intensive than ever. While tank car business continued to predomi- nate, wagon leasing firms also developed a constant stream of special-purpose wagons in the latter half of the 20th century. Exam- ples included large-scale sliding-wall wag- ons, special wagons for insulation and foam materials, a new generation of wagons for transports to and from the UK, car transport- ers, textile wagons and flat wagons for the steel industry. “Their innovative potential is effectively an engine for state railways,” said Gilles Peterhans, Secretary-General of UIP. For their part, national rail companies responded to a decline in bulk freight busi- ness since the 1960s by beefing up their fleets with special wagons such as the first generation of container wagons. At the end of the 1980s, UIP data shows that 159,000 of the roughly 800,000 freight wagons in circulation in Europe were already privately owned. When deregula- tion set in in the 1990s, private-sector wag- on leasing firms also entered the market for the bulk transport of coal, ore, gravel, timber etc. that had traditionally been the preserve of state-owned railways. To stand up to competition from road haulage, they were forced to constantly improve their special wagons and logistical expertise, optimizing both in line with customers’ requirements. The tradition of private-sector wagon leas- ing companies as niche providers proved highly successful in what was still a compar- atively small branch of industry. Bit by bit, their European fleet gradually increased to 220,000 private freight wagons, according to UIP’s 2019 Annual Report. Today, every second ton of European rail freight is car- ried on or in special wagons hired out by private-sector players. The expertise they need has been accumulated over 150 years of development in European business. T O D A Y. 9 T O M O R R O W .

W hen the historic Brockenbahn whistles its way to the summit in Germany’s Harz mountain range, it winds along a nar- row-gauge track. Since it only runs in this one place, that’s not a problem. The steam engine has no need to run on the standard gauge used in Germany, many other European countries and even China, nor to switch to the special gauge of 1,668 mm in order to access the Iberi- an peninsula, not to mention Russia’s fabled broad gauge. Things are different for cross-border rail traffic, however. As a result, hours are spent unloading and reloading freight or changing the axles on wagons at border crossings to cope with the change of gauge. And while the Brocken- bahn train would have no trouble negotiating any railway tunnel, trains loaded with containers could face a dilemma: Europe still has some lines where the clearance gauge fails to comply with the four-meter corner height that is often prescribed for tunnels. And that is far from all. Jakob Öhrstrom, Managing Director and Head of VTG Rail Europe's Intermodal Center of Competence in Switzerland, points to other obstacles that hinder the smooth flow of cross-border rail traffic: “Different power systems in Europe make it necessary to deploy multi-current locomotives that can switch between the various alternatives. But there are also different safe- ty systems that should in future be replaced by ERTMS, a harmonized European traffic management system. Nor has a common ‘rail language’ ever been defined.” There is also the issue of varying maximum train lengths and axle loads. Öhrstrom puts this down to the fact that, for many decades, rail freight had a very national focus – despite the fact that railways are ideally suited to the trans- portation of goods across long and, hence, often cross- border stretches. THE EXPENSE OF INCOMPATIBILITY The need for standardization across Europe’s rail vehicles and infrastructure was, of course, recognized early on. Har- monized pan-European rules saved time and money, al- lowed staff and materials to be deployed more efficiently, and facilitated the full use of available capacity in cross-bor- der freight traffic. Yet incompatibilities persist to this day. In day-to-day business operations, exactly the right engine and driver has to be found for each cross-border route. All the necessary technology has to be on board, complete with the appropriate permits. “That is a bottleneck,” Öhr- strom concedes, “because multi-current and multi-system locomotives are expensive, meaning that there is only lim- ited availability of any given constellation.” ALL KINDS OF CONTAINERS To make matters worse, suitable wagons were also needed for a plethora of different unit loads. “At sea, you mostly find 20 and 40-foot containers of standard width,” Öhrstrom continues. “But on land, you’ve got all shapes and sizes. Short swap bodies are 7.45 m long in Germany but 7.82 m long in Scandinavia, for example. Also, more and more 45-foot containers are now being used with double Euro- pean pallet widths and high cubes that are 35 centimeters taller. They have the same inside dimensions as a 13.6-me- ter trailer. The benefit? You can put two of them on a 90- foot container carrier and you can stack them at terminals. The drawback? They don’t have wheels.” As far as semitrailers are concerned – the units that do have wheels – Germany alone shows that the situation is no better. Only 15 percent are craneable and can therefore readily be lifted onto a wagon and carried by rail. All the rest need loading equipment that is not readily available at every terminal. Currently, VTG is opting for the roadrailLink (r2L) transport and transshipment technology developed in collaboration with its partner Vega International. This tech- nology allows 90 percent of non-craneable semitrailers in Europe to be loaded onto pocket wagons using a special ramp. Peter Westenberger, Managing Director of the Eu- ropean Railways Network NEE and a representative of the rail freight industry, has called on the business community and the policymakers to back the standardization of loading containers, the end-to-end craneability of semitrailers and greater horizontal loading capabilities in order to reinforce intermodal traffic. AN OBVIOUS SOLUTION VTG supports Westenberger’s demands, emphasizing that governments must do more to advance more consistent and less cluttered regulatory conditions throughout Europe. This holds true for issues such as vehicle registrations, traf- fic routing, a common language, electronic freight docu- ments, the dimensions and weight of swap bodies, and multimodal transport chains. Rail needs harmonized rules to be able to compete with road haulage. Only then can transportation be transformed and climate change be suc- cessfully mitigated. Westberger fully agrees: “The EU must vigorously take suitable steps in the intermodal and intramodal spaces to get freight off the roads and onto the rails. Conditions for intermodal traffic on the rails must be improved in terms of infrastructure, energy taxes and controls. Rail capacity must be ramped up. Routes, electrification, border crossings and the ETCS roll-out need the backing of a multi-year infra- structure fund. International standards for the digitalization and automation of rail freight traffic must be developed and rigorously implemented.” Öhrstrom believes that rules that are kept consistent for a protracted period will create the planning security that is needed for investment. That is important – especially in light of wagons’ roughly 40-year service life. T O D A Y. 11 T O M O R R O W .

Drogden Tunnel Along with the Öresund Bridge and the artificial island of Peberholm, the Drogden Tunnel is part of the Öresund link between Denmark and Sweden. The total length of the combined road and rail tunnel is 4,050 meters. The tunnel as a whole comprises two railway tunnels, two road tunnels and a service and evacuation tunnel. T O D A Y. 13 T O M O R R O W .

What conditions must be met to ensure that the end product is a genuinely successful European solution? It is already succeeding! The few problems at border crossings can be resolved with suitable operating reg- ulations. In the past, every vehicle needed a separate license for every country and every line. We should now have one system and one license for all lines and countries. Introducing the DAC will simplify data com- munication. And the planned 5G mobile communication standard along the routes will enable the high volumes of data expected from the various new analytical tools to be processed. What are the advantages of the ETCS? ETCS primarily facilitates an open European market, enables rail to compete with road for cross-border trans- ports thanks to interoperability, and shortens journey times. The infrastructure can be expected to have more capacity. But that won’t be 30 percent when level 3 has been implemented, as is so often reported. Ten percent is more realistic. Larger gains in capacity will depend more on expansion of the infrastructure. Transports are already safe, as the majority of lines are operated with control and safety systems, i.e. with signal boxes, block systems and, in the future, digital signal boxes. ETCS will take over from existing national train control systems. With ERTMS as the organization and scheduling system, it will be possible to further improve reliability and punc- tuality in rail traffic – on the basis of data from diagnos- tic systems, for example. And what will happen if we don’t quickly get a single version that is compatible on all sides? That will not happen. Thanks to its ETCS and GSM-R components, ERTMS has reached a stage where I can’t imagine why implementation should falter again. It has taken a while, but from now on it is mainly just about getting the job done. Essentially, there is no alternative to ETCS! I would not have said that a couple of years ago, but everything is on the right track toward a smooth and even safer rail system in Europe. ERTMS, ETCS and GSM-R The European Rail Traffic Management System (ERTMS) will replace more than 20 national train control systems and is essential to a harmonized European rail market. The ERTMS includes the European Train Control System (ETCS) and the Global System for Mobile Communications – Railway (GSM-R). Under the aegis of the Trans-European Transport Network (TEN-T), ERTMS is to be deployed everywhere, but above all across Europe's rail trans- port corridors. The plan is to have everything fitted for the TEN-T corridors by 2030. ETCS breaks down into several levels to accommo- date the demands of dif- ferent routes, use profiles and railway authorities. These levels describe how information is transmit- ted, how the lines are to be equipped and what functions the vehicles and tracks must assume. Each level is downward compatible. Besides certifying that a train is suitable for a given route and ensuring compliance with special operating regulations, the ETCS also regulates adherence to speed limits. In the event of danger, the system is even able to halt the train fully automatic- ally. Standardization raises safety to a consistently high level and significantly simplifies the signaling equipment in trains. That brings down the cost of rolling stock for cross- border transports and reduces the time taken to cross borders. T O D A Y. 15 T O M O R R O W .

H² – Key to the energy transition Hydrogen is seen as the energy source of the future. Policymakers, science and industry all see it as the key to the energy transition. But if the hydrogen economy is to succeed, safe and swift transport will be as essential as efficient production. Here, rail freight can play a pivotal role. T o get Germany’s hydrogen economy off to a flying start, the federal government ratified a National Hydrogen Strategy in June 2020. Developing tech- nologies that involve producing, transporting and using green hydrogen is a core tenet of this strategy. The research work began in 2021 with subsidies from both the Federal Ministry of Education and Research (BMBF) and the EU under the auspices of various lead projects. Work on ramping up the market for hydrogen tech- nologies is progressing in different countries for what ranks as an Important Project of Common European Interest (IPCEI) – an understandable decision, given that Europe al- ready imports more than half of the energy it needs. Demand for green hydrogen will exceed production capacity many times over, and not in Germany alone: Go- ing forward, many other European countries will likewise scarcely be able to meet their own needs for this raw ma- terial of the future. Without an extensive and versatile infra- structure, then, no hydrogen strategy can succeed. National infrastructures must be flanked by international transport routes, so two questions must be answered here: Which modes of transport are best suited to carrying hydrogen? And in what form should it be transported? A MIX OF FORMS “Hydrogen can be transported in different forms,” says Finn Torge Bremer, Business Development Manager New Ener- gies at VTG. “Examples include liquid hydrogen, compressed hydrogen, ammonia and even liquid organic hydrogen carriers (LHOCs), where a liquid carrier chemically binds the hydrogen. For storage and transport needs, we expect to see a mix of forms that will be complemented by other attractive technological innovations and industrial developments.” VTG is, for example, planning to supply compressed hydrogen to customers of varying sizes: from small custom- ers such as filling stations to medium-sized customers who cover municipal needs to large customers such as industrial plants and chemical parks. “Logistically and technological- ly,” Bremer says, “we are ready and our concepts can go into production.” ROLLING PIPELINE To make that vision reality, definite commitments from suit- able partners are needed: companies that will build their business model around hydrogen and that need a reliable distribution system. “We are talking here about both sides of long-term agreements for the transportation of substan- tial volumes of hydrogen,” says Heinz-Jürgen Hiller, Man- ager International at VTG. Hiller argues that to be perfectly prepared for the hydrogen market to go live in a couple of years, the means of transport – i.e. the wagons – must be commissioned now. “You have to do your sums properly for this kind of investment in rolling stock,” he adds. “The risks must be manageable for the producer and the consumer, but also for us, the carrier.” What that might look like in practice can be seen on the market for liquefied natural gas (LNG). Here too, VTG is the first (and to date only) company in the rail sector that T O D A Y. 17 T O M O R R O W .

“We need forward- looking policy” Sabine Nallinger is CEO of Stiftung KlimaWirtschaft (Alliance for Climate and Economy), formerly known as Foundation 2 Degrees, in which companies have come together from many industries to advance the cause of mitigating climate change. The alliance sees itself as an entrepreneurial voice for effective climate policy based on market principles. Is the business community doing more for climate neutrality than the political arena? In my conversations with business leaders and CEOs, I see very clearly that large swathes of the economy have long since set out on the road to climate neutral- ity. Admittedly, they have reached differing milestones along the road, but they are on the way. In my opinion, the political arena is often too hesitant. To some extent, it has not yet understood what companies really need at this time. Which is …? We need forward-looking policy with the courage and resolve today to get tomorrow’s technologies ready for market – policy that helps companies make climate neutrality their business model. When that happens, mitigating climate change will be an engine of innova- tion. In the international space, it will also become the hallmark of Germany as a business hub. Ms. Nallinger, all over Europe, transport and logis­ tics is the only industry in which emissions are growing and existing potential is not being exploit­ ed. What needs to be done in the rail segment? I believe that this sector is a central lever to improve climate policies in transportation. The first thing to do is boost rail traffic by resolutely expanding the rail infra- structure. Other aspects include eliminating bottlenecks in the rail network, getting the network in shape to han- dle longer trains, advancing the digitalization of rail with modern control and safety systems and signal boxes, and continuing to electrify the rail network. Only then will we sustainably shift traffic flows onto the rails. Hydrogen is playing an increasingly important part in the transition to solely using clean, renewable energy. Where does the Alliance for Climate and Economy stand on hydrogen? Hydrogen is a key element in the transformation toward climate neutrality. The proportion of green hydrogen from renewable energy should be as high as possible as quickly as possible. We want 70 percent of Germany’s electricity consumption to be met from renewable sources by 2030. And we want sufficient space to be kept avail- able to expand wind power and PV installations. That is crucial if companies are to be able to build their strategies around green hydrogen. Are companies welcoming this step toward climate neutrality? Yes, definitely. We are seeing that hydrogen plays an important role in the CO2 reduction strategies of compa- nies in almost all industries. The important thing now is to formulate a well-balanced overall strategy to ramp up hydrogen, and to clarify when demand for hydrogen will arise in the various sectors. How can these moves be dovetailed with the domestic, European and international build-up of the necessary infrastructure? Here in particular, it is important to think in international terms and commit to strategic cooperation with partner countries. A suc- cessful hydrogen economy can be built only if domestic production is flanked by a stable network of H2 importers. T O D A Y. 19 T O M O R R O W .

B eing confined to tracks and sub- ject to strict safety regulations and permanent controls makes rail the safest mode of transport. Modern signaling systems, computer-assist- ed traffic management and reliable digital and human monitoring of the rail network naturally benefit the regular context of pas- senger and freight transport. But this is all the more true when hazardous goods need to be moved around. To keep things that way, careful at- tention and full compliance are vital at all times, day in, day out. For two decades, VTG Rail Logistics has run its own hazardous goods management department to guaran- tee our ability to deliver on this promise. Stefan Kruse and Mischa Beyer, our Hazard- ous Goods Officers and Safety Consultants, are therefore constantly at the ready. PROFESSIONAL SOLUTIONS “We don’t do off-the-shelf solutions, be- cause every hazardous goods transport is different,” Mischa Beyer says. Hazardous goods themselves differ from each oth- er, but so too do their specifications, the transport units selected and the distances to be covered. It is equally important to know how well-equipped customers are. Do they have their own wagons? Their own sidings even? Or can part of the journey be completed by inland waterway? In many cases, trucks are also needed for the first and last miles. “We have a wide range of custom- er-specific solutions for all these transport chains,” Beyer says. “That is our strength: From the provisioning of different wagons through organization of the transport to delivering our own traction, we can meet every need in full compliance with haz- ardous goods legislation.” Some custom- ers need the intermodal transport of acids and alkaline solutions in tank containers, for example. Others require specially fit- ted wagons for highly sensitive chemical products. Our job – besides giving custom- ers the best and most attractively priced option – is above all to provide the safest solution. Digital tools such as VTG Connect enable individual wagons to be tracked, guaranteeing seamless monitoring of the hazardous goods they contain. IN THE SERVICE OF SAFETY When transporting hazardous goods, safety is paramount. “The RID and GGVSEB provi- sions are very precise about what you can and cannot do under hazardous substance law,” Kruse says, referring to the Regulation concerning the International Carriage of Dangerous Goods by Rail (RID) and to Ger- many’s Hazardous Goods Ordinance – Road, Railway and Inland Waterways (GGVSEB). “In a transport that we did not plan our- selves, if we identify deficiencies, these must first be remedied by the relevant ser- vice provider. Otherwise, we won’t accept the assignment.” In this business, dangers always arise when rules are not heeded. “That can be due to ignorance or other rea- sons, such as relying too heavily on routine procedures,” Kruse says. That is why VTG offers hazardous goods management training courses to customers and service providers. Beyond that, the company also performs external 21 T O M O R R O W . Labeling requirements Internationally harmonized hazardous goods labels provide information on hazardous prop- erties and on the substances being transported. T O D A Y.

“Hazardous goods law is a must” Until the end of 2018, Helmut Rein was Head of the Hazardous Goods Transport Department at Germany’s Federal Ministry of Transport and Digital Infrastructure (BMVI). Mr. Rein, in what ways is it safer to carry hazardous goods by rail than by other modes of transport? In terms of transport risks, the probability that incidents or accidents will occur is, for systemic reasons, lower on the rails than it is on the road or even on inland waterways. While very large quantities of goods can be transported in one go, the same is true of small or even minimal volumes of different hazardous goods, which can be carried safely and inexpensively on one and the same block train, especially in containers. Compared to inland waterway vessels, the rail network also bene- fits from the larger number of destinations that can be reached directly. What can be done to increase the role played by rail? The main thing is to expand the network, because rail freight traffic sometimes needs separate lines to uncouple it from passenger transport. But there is also a need for investment in the technology and the rolling stock. That includes things like the DAC for fully elec- tronic train composition at key hubs, but also suitable technical fittings on the wagons – with features such as derailment detection and telematics, for instance. I believe it is imperative to review rail policy in relation to European freight traffic. Existing rail policy does too little to stimulate innovation, and the future productivity of rail operations will suffer as a result. What were the two most important achievements in hazardous goods law during your 25 years as head of department? One was undoubtedly the reform of the regulations governing hazardous goods to create a clear and more user-friendly structure across all modes of transport. Another important advance was acceptance of the need to take account not only of the material requirements relating to enclosure and transportation, but also – especially in the case of accidents – to do the same for recognized weaknesses in substantive legal develop- ment. Looking ahead, I would like to say that hazardous goods law must remain as simple as possible. It must not become cluttered and encumbered by too many special provisions. T O D A Y. 23 T O M O R R O W .

“It won’t work unless we expand the network on a large scale” Jörg Roth, an engineer by trade, is responsible for areas such as transport safety at the German Chemical Industry Association (VCI). Mr. Roth, does the VCI have a preferred mode of transport to carry hazardous goods? No, because you could never do that. We use rail whenever possible, obviously. Especially for bulk goods, everyone is happy to use rail as the transport path of choice. But not every one of our members has their own railway sidings, so the first and last miles often have to be traveled by road. Does that mean we need to step up combined transports? Yes and no. Combined transports are a good way to get hazardous goods from A to B over long distances. And this option has gained ground in recent years due to fierce competition. The problem with regard to hazard- ous goods, however, is that there are risks every time you transship them. Moreover, it is also reasonable to ask: Once the goods are on the road, why not keep them there for the remainder of the journey? What do you suggest as an alternative? Above and beyond combined transports, we would like to see rail hubs that give all railway companies access to central marshaling yards and junction stations. That would enable our small and medium-sized members to make more use of wagonload freight, which in turn would make rail more competitive in the future. So the problem is the lack of infrastructure? It’s not just that. Rail traffic in Europe still has a strong national flavor. You notice that especially if, like me, you work on international bodies such as the RID Committee of Experts. There are some regulations that have not been adapted for decades, which really puts the brake on the Europeanization and harmonization of technical parameters. And that is before we even mention digitali- zation measures. Essentially, we lack a clear international and transnational concept. Speaking of digitalization: How is that going? Basically, we have a similar infrastructure problem here as in the case of rail network expansion. Obviously, you can always demand more rail traffic and more digital tools. But if you don’t have either a comprehensive rail or broadband network, you lack the infrastructure that crucially underpins everything. T O D A Y. 25 T O M O R R O W .

Yakutsk Yakutsk Krasnoyarsk Krasnoyarsk Novosibirsk Novosibirsk Nur­Sultan Nur­Sultan Dostyk · Alashankou Dostyk · Alashankou Ulaanbaatar Ulaanbaatar Harbin Harbin Hunchun ­ Hunchun ­ Kamyshovyi Kamyshovyi Zabaykalsk · Manzhouli Zabaykalsk · Manzhouli Altinkol ­ Khorgos Altinkol ­ Khorgos Urumqi Urumqi Tashkent Tashkent China Zamiin­Uud · Zamiin­Uud · Erenhot Erenhot Changchun Changchun Vladivostok Vladivostok Beijing Beijing Dalian Dalian Taiyuan Taiyuan Zhengzhou Zhengzhou Lanzhou Lanzhou Lianyungang Lianyungang Kobe Kobe Kitakyushu Kitakyushu Chengdu Chengdu Chongqing Chongqing Wuhan Wuhan Changsha Changsha Shanghai Shanghai Yiwu Yiwu Xiamen Xiamen Shenzhen Shenzhen Hanoi Hanoi Guangzhou Guangzhou VTG offices VTG offices and corridor hubs Corridor hubs Chemicals train Changes of gauge Malaszewicze 1,435 mm / Brest 1,520 mm Altinkol 1,520 mm / Khorgos 1,435 mm Dostyk 1,520 mm / Alashankou 1,435 mm Zamiin-Uud 1,520 mm / Erenhot 1,435 mm Zabaikalsk 1,520 mm / Manzhouli 1,435 mm EU countries: max. 44 x 40' FT Container max. 80 x 40' FT Container Russia: China: max. 50 x 40' FT Container T O D A Y. 27 T O M O R R O W .

dividends in the past.” Today, the newly emerging routes are further boosting de- mand for multimodal transports in box and tank containers. Carrying commercial goods from east to west is only one aspect: The infrastructure along the transport corridors is likewise of tremendous importance to VTG, as strategic investments at neuralgic nodes add value. In the long term, VTG’s diversifi- cation will enable new products to be gener- ated and all business lines to be interlinked. The emergence of niche markets for liquid goods within the trans-Eurasian corridor is playing a major role, as is the ability to combine VTG’s core wagon leasing business with logistical concepts, up to and including the implementation of its own chemicals trains. CONNECTED CAPABILITIES “To seize these opportunities, we need a clear strategy, an effective structure and a profound understanding of the market,” says Oksana Janssen. She oversees Eurasia & Far East, which was established in 2019 for two key reasons. One is to link up the experience gained in the different countries and regions of Eurasia. The other is to in- tegrate VTG’s various capabilities in wagon leasing, tank container business and project logistics. “All these operations bring togeth- er the Group’s global network, its in-depth logistical expertise, its cultural diversity and its wealth of market knowledge, all of which complements each other very well and enables us to benefit from growth in Eurasia,” Janssen notes. “It is vital to pool T O D A Y. 29 T O M O R R O W .

and share ideas, proposals and experience,” Wehlen adds. “Putting together connected and well-coordinated packages makes our services more attractive to customers and makes us more competitive.” Janssen sees the ability to coordinate different transport paths by rail, road, sea and air as a key area of competency: “There are times when a critical spare part simply has to be flown in, or when the destination can only be reached by riverboat.” As in the case of the gas plant assemblies from China that were bound for Svobodny. That said, the significance of transporting liquid products is likewise grow- ing on the Eurasian market. Recent market analyses indicate that, along the New Silk Road, this market will expand by 9.5 percent per year between now and 2030. For this reason, VTG’s Eurasia & Far East team deliberately reorganized its sup- ply chain for regular hydrogen peroxide transports in fall 2021, because contain- er carriers had repeatedly been a source of bottlecks along the original transport routes. Today, VTG Tanktainer transports 20- foot tank containers by ship from Sweden to the Lithuanian port of Klaip da. From here, Room for more Transporting liquid products is a crucial growth market for VTG Eurasia & Far East. Market analyses indicate that consignments along the New Silk Road will increase by an estimated 9.5 percent per year between now and 2030. VTG Rail Russia forwards them on its own 60-foot flat wagons to various recipients in Russia. Every activity – from the moment consignments enter the port of Klaip da to arrival at the sidings of the Russian recipi- ents – is handled by the VTG Project Logis- tics Baltics team, as is the unladen return journey. Once the initial test transports had been successfully completed, a long-term agreement was signed with the Swedish customer in December 2021. INNOVATION AND EXPERIENCE Going forward, experience alone will not be enough. The emergence of new trans- port routes will be flanked by the devel- opment of new technologies. “Customers want the continuous digital monitoring of hazardous and refrigerated goods,” Jans- sen explains. In response, VTG Tanktainer is focusing especially on cutting-edge GPS technology: In fall 2021, the thousandth tank container in its fleet was fitted with GPS sensors. At the same time, Eurasia & Far East is also driving technological innova- tion. Examples include a pocket wagon that enables semitrailers to be lifted easily onto other modes of transport. To do so, non-craneable semitrailers are placed on a rail-like ramp. Cranes then use handle-like mountings to load both ramp and trailer onto rail wagons or ships. The still wide- spread practice of unloading and reloading goods is thus eliminated. These new technologies are being complemented by new locations and new cooperative ventures. “To optimize the han- dling of transport orders, it is vital to es- tablish useful links between our units and offices,” Janssen says. Back in 2019, VTG had already opened new offices in Russia, Lithuania and China. “We will constantly be enriching this network with selected local partners,” Janssen says, looking ahead. “In so doing, we are also building cultural bridges that will help us get more local and international business on the rails.” T O D A Y. 31 T O M O R R O W .

VTG’s tank containers and wagons weigh heavily on the rails. Designed to carry all kinds of different goods, each one weighs BETWEEN FOUR AND 36 TONS – as much as an African bull elephant or a whole herd of pachyderms. At VTG’s own wagon factory, Waggonbau Graaff, gets through 7,000 TONS OF STEEL PER YEAR. To put that in perspective, some 10,000 tons of steel were used to build the Eiffel Tower in Paris. 193 EIFFEL TOWERS could be built from the MASS OF THE ENTIRE VTG FLEET. Every month, VTG freight wagons cross national borders in Europe an average of 1,200,000 times. In 1836, rail freight traffic in Germany began with the transport of two barrels of beer. At the time, rail travel was intended only for passenger transport, so a special exemption was needed and the brewer had to buy two third­class tickets for his barrels.2 4,200 KILOMETERS is the farthest apart two individual VTG freight wagons can ever be in Europe. The longest and heaviest freight train of all time set a world record in Australia on June 21, 2001. Comprising 682 wagons, the train was pulled by eight diesel-electric locomotives, all remotely controlled by a single engine driver. Loaded up with iron ore, the 7.353­KILOMETER train weighed 99,734 TONS and traveled 426 kilometers in ten hours.1 T O D A Y. 33 T O M O R R O W .

LEADING “It is very important for young people to keep their sense of wonder and keep asking why.” Stephen Hawking British physicist and astrophysicist *1942, † 2018

1970 Jumbo tank car Westwaggon, tank car No. 941 183, Kassel, four axles, Deutsche Reichsbahn, inscription: Wirtschaftliche Forschungsgesellschaft m.b.H. Berlin (Economic Research Company): Painted in camouflage colors, this jumbo tank car featured a new tank and underframe unit. This, together with the consistent use of welding instead of rivets, substantially reduced the tare weight to just under 19 tons for a payload of 44 tons. Two-axle and four-axle models were available. The tank was designed to transmit tensile and impact forces: It did not need a solid underframe. The tank car had both air brakes and a handbrake. The handwheel for the bottom valve was no longer in the dome, but was mounted on the tank itself. Four­axle tank car This four-axle VTG tank car had an 88 m3 capacity. The underframe was separate from the tank and was designed to take an auto matic coupling. Separating the tank from the underframe had the advantage that tensile forces no longer had to be factored into calculations for the tank. Since side buffers were no longer needed either, the external I-beam could also be dispensed with. For a transitional period, a robust central I-beam with built-in headpieces to saddle the tank continued to use side buffers. This new genera- tion of four-axle models could travel at speeds of up to 100 km/h on the German rail network. 2000 Eco Jumbo VTG’s current petroleum tank car model boasts a capacity of 98 m3 and features a number of changes compared to the 1970 model. A one-degree gradient toward the center ensures that the tank can be emptied with no residue. At unloading points, all work steps can be done from ground level. The bottom valve is floor-operated and linked to a ventilation valve, so there is no need to open the dome. The ventilation valve pre- vents a vacuum from forming in and ultimately threatening to destroy the tank. Since no ladder is now needed, this has been removed for safety reasons. The classic handbrake has likewise been replaced by a floor-operated version. The wagon weighs 22.6 tons. With a 22.5-ton axle load, it can carry a payload of 67.5 tons. 37 T O M O R R O W .

I t never ceases to amaze us how many people in Ger- many and Europe are familiar with the name VTG, even if they have nothing to do with the rail freight industry. Recognition tends to take place on a subcon- scious level and can be attributed not only to the three-let- ter abbreviation, but above all to the eye-catching historic drill-head logo that harks back to the days when VTG was part of Preussag AG. At times the logo stands out conspicuously on a tank car full of gas or petroleum, at others on a powder wagon designed to carry plastic granulate, or even on a bulk wag- on laden with agricultural produce and supplies. On pocket wagons and intermodal wagons, you have to look a little more closely to discover the logo on the underframe. Some wagons are made of regular steel with a coat of white, gray or blue paint. Others mirror the cloudy sky in the shiny stainless steel insulating cover of a chemical rail tank car. The appearance can vary greatly depending on the age of a given wagon. While some look like they have just rolled off the production line, others give the impression of having ‘been around the block’ a few times in much of Europe. Yearly mileage depends on the wagon type and how it is deployed. Tank cars average about 50,000 kilometers a year, while traditional freight wagons average 80,000 ki- lometers and intermodal wagons can occasionally top 200,000 kilometers a year. To make sure every wagon can stay the course with such intensive usage, regular inspec- tion of all prescribed safety and quality criteria is of para- mount importance. Thanks to a pan-European network of partner workshops, VTG can offer repair and maintenance facilities literally anywhere, both for highly sensitive haz- ardous goods wagons and for the conventional fleet. Four company-owned wagon workshops in Germany, France and Slovakia and a centrally located spare parts warehouse guarantee very fast service turnarounds. TIME IS MONEY VTG’s mobile repair and maintenance service MoRe provides an efficient way to perform regular inspections and minor re- pairs without the customer having to bring the wagon to the workshop. Instead, VTG’s team of mobile technicians come to wherever the wagon in question is currently stationed. That considerably shortens downtime for the customer, raises availability and delivers cost-efficient maintenance. Telematic systems add yet another benefit for main- tenance work. Now that the company’s fleet of freight wagons has been digitalized with VTG Connect, the data generated can, for example, be used to determine a wag- on’s actual annual mileage. The ability to track and trace VTG wagons also permits more accurate assessments of the real intensity of loads and usage. To take an example: An intermodal wagon that is constantly running to and fro across the Alps will experience completely different wear patterns to a wagon that only ever rolls across flat plains. Rather than follow the time-honored custom of defining fixed time intervals for servicing, a much more pragmatic approach to maintenance work can now be adopted. DECOMMISSIONING AND RECYCLING A freight wagon is a loyal servant. If it is well looked af- ter – with preventive measures such as regular tank in- spections, axle checks and the modernization and repair of superstructure, underframe and bogie alike – it can en- joy a long and productive service life. Depending on the type, some wagons operate for up to 40 years. But when wagons do have to be decommissioned after decades of service, they end up, rather unromantically, in the crush- er. Thus transformed into valuable scrap metal, they are melted down by the steel industry and fed back into the material cycle. Some older models spend the twilight of their ca- reer riding the rails of Eastern and Southeast Europe, albeit only those that do not weigh more than 80 tons. This is because the often less robust lines than those in West- ern Europe cannot carry the more modern 90-ton models. While both share the same tare weight of around 25 tons, the ten-ton discrepancy in payloads is not insignificant. For Western European customers, the ability to carry 10,000 ki- lograms more is a decisive factor, which explains why the lighter versions can no longer be leased there. It also illus- trates why quite a few of these steel behemoths, built in the early 1980s, still safely and reliably criss-cross Eastern Europe from one place to the next as they approach the end of their service life. T O D A Y. 39 T O M O R R O W .

New business ideas Meike Nennhaus, Head of Cluster Nordic, and Thomas Freyer, Head of Sales & Operations, develop innovative solutions that give VTG customers exactly what they need. T O D A Y. 41 T O M O R R O W .

craneable semitrailers off the road and onto the rails. Known as the roadrailLink (r2L) system, this innovation yields huge advantages for rail: It provides a fast, low-cost way to offer customers the door-to-door transports they want. COMPATIBILITY ACROSS THE BOARD Wellbrock sees roadrailLink as a good example of “how we can build bridges toward rail from different areas of transportation. Our main job is to make sure that rail services are as easy as possible for the shipping and transportation in- dustry to use.” That, he stresses, will only work if those services are 100 percent compatible with other modes of transport. The need to build bridges has long since transcended ‘mere’ hardware solutions to move cargo from one mode of transport to another. In the shape of its customer platform traigo, VTG has also given customers uncomplicated digital access to rail services. “We are leveraging all our rail expertise to make it easier for all ship- ping agents and other modes of transport to collaborate with rail,” Wellbrock says, outlining VTG’s cooperative strategy. The aim is to give customers friction-free transport chains across all modes of transport, involving rail wherever it is possible and makes sense. The COO points out that traigo helps the company accommodate customers’ wishes even better. MAKE RAIL EASY: THE KEY TO SUCCESS Straightforward, platform-based digital access to rail freight will be increasingly important in the future. “Frequent churn among customers’ staff means that people tend to have less and less experience when it comes to factoring rail into transport planning,” says Thomas Freyer, Head of Sales & Operations at VTG Rail Europe. “The gen- eration that possessed the knowledge is gradu- ally retiring.” The complexity of rail freight often leaves successors out of their depth, or they do not have the time to concern themselves with the details and peculiarities of rail. “That’s why it is essential for us to make our services platform-ca- pable and offer customers services ranging from wagonload freight to the leasing of whole trains at the click of a mouse.” Platforms make trans- port planning simple and extremely flexible, he says, as well as delivering faster wagon availabil- ity. He is absolutely convinced: “Make rail easy” is the key to a successful future for rail. Flege too sees digital portals as “a tre- mendous opportunity for rail freight, because they lower the barriers to entry.” Moreover, digitalization opens up lots of other ways to Flexibility Attractive pricing In many cases, transport needs cannot be planned weeks or months in advance. The rapid availability of transport capacity is therefore an important factor in customers’ decisions for or against a given mode of transport. As in other industries, cost is one of the most critical criteria in transport and logistics too. For shipping agents, Dirk Flege, Executive Director of Pro Rail Alliance, says that transport prices “decide everything” when it comes to the choice of a mode of transport. T O D A Y. 43 T O M O R R O W .

time. “The specific digital services we offer in the future will depend on what our customers want.” The issue is not to do everything that is technically feasible: “We follow the needs of our business partners,” he says. “The pivotal ques- tion is: Which services genuinely add value for them?” For this reason, he sees staying in con- stant touch with customers and enhancing the portfolio with the digital services they want as central to any modern business model. Besides converting and expanding the wagon fleet in line with modern demands and adding on digital services, rail freight providers must also set their sights on the markets of to- morrow if they want to grow. These include a raft of existing niche markets such as growing demand for the transportation of alternative en- ergy media like hydrogen and liquefied natural gas (LNG). MODAL SHIFT IN ACTION Significantly greater potential for rail derives from temperature-controlled transports. Here, the con- stant monitoring of temperatures using sensors must be complemented by a power supply to keep the cargo refrigerated. To this end, VTG uses a climate-friendly PowerBox mounted on a modular freight car and supplied via wheelset generators with enough electricity for on-board refrigeration. This tech- nology too is already in use. “Since spring 2022, we have regularly been carrying tempera- ture-sensitive fruit and vegetables from Barce- lona to Lübeck. That is one of the longest in- termodal lines in Europe,” Wellbrock says. From North Germany, the refrigerated cargo then goes on the ferry to Sweden. “That is modal shift in action: In the past, all these consignments were transported exclusively by road, generating heavy CO2 emissions because of the diesel gen- erators needed for cooling.” Thanks to the PowerBox, rail can now give customers temperature-controlled transport of- ferings that fit their needs like a glove – and that also align with customers’ desire for sustainabil- ity. Why? “Because shifting freight from road to rail reduces CO2 emissions by a factor of seven,” Flege calculates. That is good for the climate – and good for rail freight traffic. For shipping agents, sustainability is an increasingly important factor in the decision to use this or that mode of transport. “That’s why rail’s ‘green footprint’ constitutes an amazing opportunity,” Kotratschek reflects. “After all, rail freight is the most ecologically sustainable form of transport you can have.” Reliability Sustainability Above all, customers want their transports to be predictable. For that, they need reliable data about arrival times plus quick access to information about any possible delays. Rail meets this demand with digital rolling stock For shipping agents, the green footprint of a transport is becoming an ever more important criterion when choosing how to forward it. This is where rail has the edge over road. Hannes Kotratschek, Managing Director of VTG Rail Europe, points out that sustainability monitoring systems. And if there is an occasional is not just about transport-related CO2 emissions: “The focus delay for any reason, there is enough time to react and find of sustainability considerations is increasingly widening to include alternative solutions – to keep production lines running, factors such as land use, the cost of accidents and congestion for example. on the roads, and the working conditions of truck drivers.” T O D A Y. 45 T O M O R R O W .

Dr. Juhnke, your tenure as Chairman coincided with the end of the Cold War and German Reunification – one of the most far­reaching upheavals in recent history. How did that affect the rail freight market? JUHNKE: It changed everything about the market. North-south transport opera- tions predominated before this point was reached. But when the Iron Curtain fell, lots of east-west axes were added to the equation. We became a transit country, albeit – regrettably – mostly on the roads to begin with. VTG already had an active presence before the fall of the Iron Curtain in what was then the Eastern Bloc: in Poland, for example, but also in the Balkans and East Germany. When the Wall came down, many of the business relations that had grown organically in the Eastern Bloc dissolved. On the petro- leum market, however, where we were very active back then, the impact was less tangible than in other industries. That is shown by the Leuna refinery complex, for example, which was kept running due to industrial policy considerations. At the same time, tank cars that had previously belonged to the East German state rail- way company Deutsche Reichsbahn came onto the market. VTG was able to acquire part of this fleet. But the resultant overca- pacity and cheap new builds from Eastern Europe effectively cut European leasing prices in half in the space of a few years. Dr. Juhnke, Dr. Fischer, taken together, you have spent 27 years at the helm of VTG, the market leader in private­ sector freight wagon leasing. What were the most important moments for you personally? JUHNKE: In my view, the period from 1988 to 1998, when I led the company, was easier than the present day. Germany was enjoying significant economic growth at the time and you couldn't do much wrong if you invested. If I had to choose one single important moment, I would point to the fundamental changes to the market and competitive environment that followed the fall of the Iron Curtain. All of a sudden, new competitors, wagon fleets and suppliers began to spring up, although the target markets also in- creased in size. FISCHER: It is to Klaus Juhnke’s credit that he says his era was easier than mine, which extended from 2004 to 2021. Every time has its challenges. One thing we have to say, however, is that since the fall of the Wall and Reunification in the early 1990s, all developments have accelerated enormously. Today, crisis and boom phases follow on from each other in ever faster and more unforeseeable sequences. Conditions are constantly changing. That is challenging, but also gives rise to many opportunities. For me, one crucial moment was the sale of VTG in 2005, because that freed us from the shackles of our previous corporate group situation. Less than two years later, at the end of June 2007, our IPO was the second major turning point in my eyes. Broaden- ing the shareholder structure and gaining access to the capital market gave us even greater strategic freedoms, plus the new opportunity to finance acquisitions with our own stock. Dr. Klaus­Jürgen Juhnke was in charge of VTG from 1988 to 1998 and later served as a member of the Supervisory Board of VTG AG. 47 T O M O R R O W . T O D A Y.

In this period, extensive purchases in China, Russia, Europe and the USA, for example, gave VTG an increasingly international profile. What prompted you to drive internationalization for­ ward so systematically? FISCHER: The market as a whole has become more international, more global. It was already that way when I joined the company in the mid-1990s, of course. In terms of European overland transport, we at that time already had a more international outlook than many of our customers. Very early on, we began operating our wagon fleet as a European fleet, moving it back and forth across borders as the need arose. But in the period that followed, our major corporate customers became vastly more interna- tional, buoyed by endless demergers, joint ventures and hive-offs on the part of big industrial conglomerates. This trend, coupled with digitalized communication, repeatedly turned our customer universe on its head. There were times when you couldn’t even remember the names of the emerging structures: Some firms changed their colors so quickly. This process is still continuing virtually unchecked. And in this context, it was important for us to become a digitally connected pioneer with a global presence. VTG has always been able to turn upheavals and turbulence on the German, European and global markets to its own advantage. What do you both see as the secret of this success? FISCHER: Bold risk-taking and opportunities have never been in short supply, together with the ability to strike while the iron is hot. Yet one of the most important keys to our success is long evity in the way we think and act, in our strategy and how we develop our people. Dr. Juhnke was only the third boss in the history of this company; I was the fifth. In this industry, you need foresight and staying power. And you sometimes need to wait a long time before your plans come to fruition. JUHNKE: VTG also depends on employ- ees who have accumulated a wealth of specialist knowledge over the years. Whenever someone goes, knowledge goes with them. For the management, that means providing these specialists with good working conditions that keep them loyal and constantly training them to master new requirements. The industry has seen enormous consolidation in recent decades. What does the future of rail freight look like? FISCHER: The sector is currently attracting considerable attention from the public and from the German and European po- litical echelons because we can transport goods in a climate-friendly way. We now need to prove that we are up to the task. Many aspects of rail freight transport will need to be reinvented: The world of rail needs a freight revolution. But when will we do it, if we don’t do it now? Or, to be more precise: If it doesn’t happen now, it will never happen. Why do I say that? Because if the sector does not rise to these challenges and overcome them, there may not be any rail freight traffic worth speaking of in the 2030s. That said, I am very hopeful. There are lots of good new strategies. What we need now is a pan-European master plan for rail freight – and, for at least ten years, the will to put it into practice, in the right order and at the right speed. If we succeed in doing so, we are on the right track. “One of the most important keys to our success is longevity in the way we think and act, in our strategy and how we develop our people.” Dr. Heiko Fischer, Former Chairman of the Executive Board of VTG AG and current President of the UIP T O D A Y. 49 T O M O R R O W .

JANSSEN: We are seeing the same devel- opment in Eastern Europe and Eurasia, two important markets for VTG’s activ- ities along the Eurasian corridors. The Eastern European and Eurasian countries may have joined the conversation a little later. But here too, climate neutrality and green logistics are increasingly appearing on the agenda – with a focus on rail and linked to the corresponding investments. So for us, mitigating climate change also relates to growth, as well as being an argument when we recruit new people. It is noticeable that young talents in par- ticular are often convinced by this topic. In Europe, the target is for rail freight to increase by 30 percent by 2040 relative to 2020. What can and must rail itself do to enlarge its share of freight traffic? WELLBROCK: A large proportion of the growing flow of goods involves light- weight, individualized goods that are embedded in just-in-time production processes. Many customers still believe that the challenges associated with this structural effect can be mastered only by trucks. To begin with, we must therefore work on the attractiveness of rail’s image – and provide offerings which appeal to shipping companies that have only been familiar with trucks up to now. JANSSEN: Rail as a whole must become more digital, more agile, faster and above all simpler for customers. ‘Make rail easy’: This is a goal we have been committed to for years. Only in this way can we get more goods onto the rails. What strategic decisions do you expect to see from European political circles? JANSSEN: Right now, speed of implemen- tation is the most important factor to make rail more competitive in the future. Governments can accelerate development in three main areas: by swiftly investing in infrastructure, by rapidly simplifying and harmonizing regulations and signal- ing technology, and by quickly scaling back subsidies for less climate-friendly modes of transport. Keeping a close watch on existing and future challenges in the industry Meet VTG’s two Executive Board members for operations: Oksana Janssen, who is in charge of the Silk Road & Project Logistics, Rail Russia and Tanktainer business units, and Sven Wellbrock, who is responsible for the Rail Europe and Rail Logistics business units. The third member of the Executive Board is CFO Mark Stevenson. Climate change and how to mitigate it are top of the bill right now. What can rail freight contribute to the nascent energy and transport transitions? WELLBROCK: One thing is clear: The energy and transport transitions can only work if we get more and more goods off the roads and onto the rails. More than 20 years ago, we were already pointing out that one train substitutes for up to 52 trucks. But look at the freeways and the traffic con- gestion today. Over long distances, rail has long been much more efficient – and much more energy-efficient – than road haulage. T O D A Y. 51 T O M O R R O W .

countries, but of the whole of Europe. Nor are we dependent on government subsidies, so we simply cannot afford to invest in technologies that have no future. JANSSEN: Private-sector wagon operators have always been a driving force behind innovation in rail freight, because they have a very keen interest in meeting the needs of customers. State railway companies cannot usually cover the depth and breadth of those needs. Moreover, many investors looking for sustainable business models are willing to invest in modern freight wagons and innovative equipment. Rail tears down the barriers to cross­border freight traffic – in the growing exchange of goods with the Far East via the ‘New Silk Road’, for ex­ ample. How much do Germany and the rest of Europe benefit from this? WELLBROCK: For the German and Europe- an economies, the smooth flowing trans- portation of goods across national borders is critical. One anecdote neatly sums up how important that is: When bottlenecks occurred in the Danish rail infrastructure a few years ago, it took just ten days before the first food items began to run short in Swedish supermarkets. To make the same point in a more positive way: When rail works as it should, it is the backbone of the European economy. JANSSEN: Germany and Europe can draw up reliable plans thanks to us. Even when everything is working normally, containers get stacked up in Chinese and European ports alike. When the Ever Giv- en container ship blocked the Suez Canal in spring 2021, global trade really hit the skids. Along the rail-centric Silk Road, it is easier to find a way around such block- ages. That’s another reason why, since the start of the coronavirus crisis, rail has been underwriting stable cross-border supplies of everything from food to med- ical devices. That kind of position gives us a heavy responsibility – a fact of which we are well aware. “When rail works as it should, it is the backbone of the European economy.” Sven Wellbrock, Chief Operating Officer Europe & Chief Safety Officer JANSSEN: Additionally, digitalization provides easier access to rail for potential customers who want an easy-to-use front end with very low barriers to entry. That is especially true of young people who grow up today with extremely intuitive digital tools that are easy to use. When they begin their career, they natural- ly place the same demands on digital solutions for rail. That is the standard by which we will be measured. Why can private­sector wagon owners in particular afford this kind of technical innovation? WELLBROCK: Unlike state-owned railways, we don’t think only in terms of individual T O D A Y. 53 T O M O R R O W .

W henever a new idea sees the light of day at VTG, it first has to answer one question be- fore it can be cleared for implementation: “What’s in it for Klaus?” The question has its roots in an anecdote familiar to just about everybody at VTG. During a strategy workshop, customers were asked how they felt about VTG’s products and services. One of those present was the Klaus in question, who voiced the following criticism: As a customer, he sometimes felt abandoned. He felt that VTG’s services were not always tailored to his needs. At the time, this story made many product managers sit up and take notice, and it is still fre- quently evoked in discussions of how customers might benefit from a new idea. The question “What’s in it for Klaus?” has thus long since become part of the DNA at the think tank from which many of VTG’s technical innovations now emanate. START BY UNDERSTANDING THE PROBLEM When VTG talks about its ‘think tank’, it essentially means two departments: Technical Innovations and the Digi- tal Lab. Together, these two units bring forth innovations that have in recent years established VTG as a pioneer in the industry. The Technical Innovations team oversees all innovations that have to do with the actual rolling stock. Set up in 2015, it was tasked with bringing connectivity to the VTG wagon fleet and giving customers better service with the aid of electronic, telematic and sensor features. The project’s name was VTG Connect. Since then, it has spawned a whole web of sensors that now let customers track their freight more or less around the clock. Alongside the position sensor, the company’s freight wagons can to- day also be fitted with a load sensor that indicates whether a wagon is loaded or empty. Accelerator and temperature sensors can be added as well, with even more functionality in the pipeline. But what happens to the data gathered from all the connected wagons? This question is addressed by the Digital Lab. As the name suggests, this laboratory works on digital solutions such as the customer platform traigo, Room for innovation VTG has set up its own Digital Lab to develop digital ideas. T O D A Y. 55 T O M O R R O W .

“No one knows the customers’ challenges better than the customers themselves – which is why customers are part of the development team for digital products right from day one.” Dr. Niko Davids, Chief Digital Officer at VTG and Head of the Digital Lab which effectively stakes out the digital framework for VTG’s products. The team had only three staff when the Digital Lab opened for business in 2019, but has grown nearly ten- fold in the meantime. “We came out of nothing back then,” recalls Dr. Niko Davids, Chief Digital Officer at VTG and head of the laboratory. “Today there are almost 30 of us – a pot pourri of young and old, internals and externals, IT people and business experts.” To better understand what customers really need, Davids and his team adopt a singularly pragmatic approach: They invite customers to attend workshops at the Digital Lab and quiz them on their points of pain. The issue is not finding problems to fit new or existing solutions, he stresses, but exactly the opposite: “We don’t lift a finger until we have un- derstood the basic problem faced by the customer,” Davids says. “And no one knows the customers’ challenges better than the customers themselves.” SETTING STANDARDS FOR THE WHOLE INDUSTRY When the Technical Innovations team gets around to fine-tuning the technical intricacies of their output, they can draw on customer feedback only to a limited extent. Ideally, the latter’s only contact with the freight wagon itself is on screen via the traigo platform. Over at Tech- nical Innovations, Dr. Hanno Schell, who heads this team, pursues a similarly straightforward strategy when striving to birth ideas that will enhance VTG’s product portfolio: “Sometimes an idea hits you when you are showering in the morning, sometimes when you are talking to suppli- ers.” But many ideas also come straight from the horse’s mouth, as it were: from the users who work every day with the wagons on the railway platforms. One topical example is the kingpin sensor: In the past, Schell admits that there were occasional issues when it came to locking the pocket wagons. “So we sat down and asked ourselves what we could do about the problem.” The outcome was the idea for a sensor-based monitoring system, which was then developed and tested with the aid of two partners. “We are now rapidly approaching roll-out. In 2022, kingpin sensors are to be fitted on every VTG pocket wagon,” Schell announces. Over the years, it is precisely this hands-on mentality that has given VTG a leading position on the industry’s innova- tion front. Some of its projects have been implemented alone, T O D A Y. 57 T O M O R R O W .

AT A GLANCE The VTG think tank is running at full tilt, gradually transitioning rail into the digital age with a series of exciting projects. Here are just four innovations that have come out of VTG’s Technical Innovations and Digital Lab units. VTG Connect Project launch: end of 2016 traigo Project launch: spring 2019 A connected world requires rail to be connected too. VTG became the first company in the industry to introduce digital freight wagons, fitted with telematic systems, across its entire fleet. The aim is to gather data that will be used to optimize logistical processes and maintenance systems. Yet the same data will also be made available to customers on the digital traigo platform. traigo from VTG effectively lays the cornerstone for the digitalization of the company’s business model. This digital customer platform makes an array of digital tools and information available to drive smart rail freight traffic. It thus serves as the interface for digital fleet management. traigo won three awards in 2021: the German Mobility Prize, the Digital Leader Award and the Champion of Digital Transformation Award. Predictive maintenance Project launch: mid-2019 m² Project launch: mid-2018 Keeping rail vehicles well maintained has always been a very time-consuming business. The status of rolling stock must be constantly monitored to ensure that no damage that could lead to accidents is over- looked. To do so, test stations will in future be set up along the tracks to check the degree of brake block wear in transit, for example. If the blocks are very worn down, maintenance can be booked via traigo. m² – or “M squared” – is a project initiated jointly by VTG and DB Cargo. Its aim is to develop new kinds of container carriers that can very flexibly accommodate different transport requirements and thus be tailored to the individual needs of each customer. The m² carriers are standardized, modular – and separate from the container itself. T O D A Y. 59 T O M O R R O W .

Wheelset axles From a safety perspective, the wheelset axle is one of the most important parts of a wagon. The greater the axle diameter (i.e. the thicker the axle), the lower its surface tension. Less tension makes it more unlikely that cracks will appear – and slows the widening of any cracks that do appear. Magnetic particle testing To spot fissures on the surface of wheelset axles at an early stage, the axles must be regularly inspected. This involves blasting off anticorrosives, magnetizing the axle to be inspected and then applying a liquid that contains magnetic particles. The particles gather around any fissures, which may have formed due to corrosion scars, for example. Unlike with the ultrasound testing method that is still used to some extent, this procedure also identifies smaller fissures. Iron filings Fissure Magnetization Wheel disks Wheel/rail contact Since wheel webs used to be flat, unwanted periods of extended braking caused the materials used for the wheel rim and the wheel web to be heated up and therefore expanded to different degrees. This could lead to significant tensional variations within the wheel, causing the wheel disk to break in worst-case scenarios. Today, the S-shaped or funnel-shaped web design of modern wheels gives the web more room to expand at high temperatures within the wheel rim, thereby preventing the emergence of cracks and fissures. The point at which the wheel touches the rails is the point where construction engineering meets mechanical engineering. Although the wheel/rail contact point is scarcely bigger than a five-cent piece, it affects noise, stability and rail abrasion while the train is in motion. European norms therefore specify that rail profiles and wheels must be optimally attuned to each other. T O D A Y. 61 T O M O R R O W .

A VISIT TO ELZE There are only a handful of factories in Germany that still make new freight wagons. One of them is in the sedate little town of Elze, near Hannover, where high­quality tank cars are man­ ufactured at Waggonbau Graaff. While the workshop here has been part of the VTG Group since 2008, its history goes back much further. It is worth a visit. A long story Before it built tank cars, the factory in Elze produced truck trailers, escalators and even sugar. T O D A Y. 63 T O M O R R O W .

Mostly for VTG's own needs Around 400 tank cars a year are manufactured at the Elze workshop. Top quality Tank cars from the Waggonbau Graaff workshop are a syn- onym for quality. They trans- port goods the world over. The takeover therefore went through on October 17, 2008, followed by integration of the factory in the VTG Group. QUALITY “MADE IN ELZE” Nearly 400 wagons leave the Elze workshop every year, mostly to meet VTG’s own needs. So far, VTG’s gamble has paid off: “The workshop in Elze enables us to constantly re- juvenate our fleet,” says Thomas Jussen, one of the Manag- ing Directors at Waggonbau Graaff GmbH. “Having said that, between 30 and 40 percent of the wagons go to third-par- ty customers.” Germany has no other workshop to build new wagons like the one in Elze. Today, it produces only high-quality tank cars to carry liquids and gases. Jussen tells us that even smaller batch runs can be produced here effi- ciently. “That could be ten or 20 wagons before we realign the whole production set-up for a different wagon type,” he says, describing what makes the Elze workshop so special. “Not many companies on the market can do that!” Our tour begins back at the foot of the old chimney. Entering the production hall is like waking up in another world. The sunny, idyllically tranquil morning suddenly gives way to a scene fashioned by the flashes of welding machines, all suitably underpinned by the soundtrack of banging hammers. Wherever you look, staff in heavy pro- tective gear are going about their work. Every gesture has been completed a thousand times, every touch is sure. A vibrant ‘busy-ness’ prevails. It is easy to lose yourself in the moment, only to be reawakened when the next semifin- ished tank sweeps by overhead, dangling from a crane like an eight-ton steel zeppelin. It usually takes six to eight days to progress from cutting the steel sheets to shipping a finished tank car, pol- ished to a sheen. This is made possible in part by heavy machinery that assists the factory employees with their hard physical work. “Right now, we are the most modern tank building production facility in Europe. A lot of what we do is already automated,” Vogel says. But things were not always like this: “There were times when people joked that this was a bone-crushing plant. The work was always well paid, but it used to also involve heavy physical stresses and strains,” he remembers. Fortunately, those days are long gone. The wagon workshop in Elze is now much more advanced with re- gard to occupational safety. “As recently as the 1980s and 1990s, Graaff effectively had its own ward at the hospital in Gronau,” he laughs. He recalls wearing cotton gloves on T O D A Y. 65 T O M O R R O W .

become productive,” he remarks. “I can't think of a better way to motivate young people.” Among the trainees themselves, Waggonbau Graaff has already earned an excellent reputation. Many, such as Riklef Mademann, had it recommended by word of mouth. Mademann is in the second year of his apprenticeship and is the official representative of all trainees at the site. He is positive about his time at Graaff to date: “If you dig down a bit into the history of this place, what has happened here and where we stand today, that’s pretty exciting!” Made- mann sees the sense of togetherness – what he calls “the Graaf feeling” – as unique. After being with the company for three decades more, Vogel seems to be in full agreement: “I feel good here. Even after all these years, every day is a new adventure. It is fair to say that the factory has become my home.” his first day at work: Serious gashes were no rare occur- rence. Modern machinery such as computerized welding equipment have since made this a much safer and more ergonomic place for the factory workers. Special protec- tive gear keeps dust out of the lungs during welding, and the CERO safety campaign seeks to continually raise safety awareness among all staff while minimizing the number of accidents. “THE GRAAFF FEELING” Our tour of the factory halls draws to a close after just under two hours. Vogel has, however, saved the best till last – the jewel in the workshop’s crown, so to speak. He stops out- side a building a short distance from the production halls. ‘Training Center’ is emblazoned in big blue letters over the entrance. Inside, we discover an airy workshop equipped with modern workbenches and numerous welding booths. A radio is on as the trainees go about their work. The at- mosphere is relaxed. Since October 2021, budding construc- tion mechanics have been coming here to learn the high art of tank building, aside from the hustle and bustle of the factory routine. “They learn best when they get to do productive stuff,” Vogel notes. That is why the apprentic- es are made responsible for engraving the wagon plaques and other minor aspects of auxiliary work. “The new center gives them a protected space in which they very quickly Protective gear is compulsory Waggonbau Graaff attaches huge importance to health and safety. The number of accidents is in continual decline. Riklef Mademann (pictured above) is a construction mechanic in the making. He is enjoying his apprentice- ship at Graaff. T O D A Y. 67 T O M O R R O W .

HAPING “Do we want to go down in history as the last generation that could have prevented our climate from passing an irrevocable tipping point?” Alexander Gerst German geophysicist, volcanologist and astronaut *1976 TRANSITION

Slow train comin’ Opening of the first German train line between Nurem- berg and Fürth, December 7, 1835 (painting by Erich Schilling (1885- 1945), at the Muse- um of Transport, Nuremberg) the first time in 1844. Here again, the allure of the speed of this new mode of transport is clearly in evidence. MOVING INTO THE LEAD By no means confined to the cultural mi- lieu, railways had a far greater impact on economic activity. Invented at a time of burgeoning international trade flows, it was instrumental in driving their rapid accelera- tion. “The fact is,” economic historian Ger- old Ambrosius wrote in ‘Globalization – The History of International Economic Relations’, “that new mechanical propulsion increased the speed, safety and regularity of trans- port while dramatically reducing its cost. It took the transport revolution to enable goods to be carried not just in small quan- tities, as in the past, but in large volumes around the world. This laid the foundation for the enormous expansion in world trade in the second half of the 19th century.”6 Ambrosius points to estimates suggesting that overland transport costs plunged by 80 percent in this period. At the same time, world trade (measured at con- stant prices adjusted for inflation) swelled Passenger car Double-axled, with a doorway to the next carriage; Germany Sleeping car Prussian state railway company TRAVELING THROUGH TIME These historic drawings of special forms of railway carriages and wagons are taken from a 19th-century edition of the German Brockhaus encyclopedia. T O D A Y. 71 T O M O R R O W .

Passenger car Double decker; Germany Mail wagon Austria “Thanks to their resolute actions and willingness to shoulder risks, private wagon owners assumed a pioneering role in developing and improving freight wagons in many areas.” Jürgen Hüllen and Richard Neff, former Managing Directors of what was then VTG-Lehnkering AG of these was the parochial mentality, es- pecially widespread in Central Europe, that made both the technical and organizational aspects of rail-based freight transport con- siderably more difficult. Each country start- ed out with its own legal systems, customs duties and even clock times. In some cases, these problems were exacerbated by vary- ing gauges and incompatible wagons or loading equipment. The will to cooperate was very mut- ed to begin with, as railways very quickly became a lucrative source of revenue for state coffers. Christoph Kopper notes that, in 1911, the revenues of German regions consisted on average of 50 percent tax re- ceipts and 36 percent profits from railway operations. In the 1870s, regional govern- ments had thus stepped up their efforts to buy private railway companies. Deutsche Reichsbahn, the national carrier, was not established until after World War I, leading to much greater harmonization. Technical standardization began back in the mid-19th century – initially at the national level and then at international level. To this day, how- ever, it remains a major bone of contention in the rail freight segment. Standardization demands considerable investment on the part of governments, because profit mar- gins have long ceased to be comparable to those of the 19th century. Looking back at this era, it becomes clear that huge advanc- es can be made – provided the economic courage and societal vision are in place. 5 1 1 e g a p : s e c r u o s f o t s i L T O D A Y. 73 T O M O R R O W .

By 2030, the EU wants rail freight’s share of the modal split to increase to 30 percent. This goal must be achieved if the transport transition is to take freight off the roads – and successfully mitigate climate change. I t is easy to complain about rail freight. Delays, poor information flows, lack of flexibility, problems with international coordination, competition for track time, new industrial zones with no sidings and extremely protracted infrastructure planning and construction phases are but a few of the main criticisms. This mode of trans- port cannot be dispensed with, however. On the contrary: Governments see it playing a major role in a successful transport transition – and thus in keeping climate change in check. By 2030, the aim is to raise freight transport’s share of the rail travel market from 19 percent in 2019 to at least 25 percent in Germany. For Europe as a whole, the corre- sponding figure should rise from 18 percent to 30 percent. Climate legislation passed by the EU in 2021 requires over- all greenhouse gas emissions within the EU to be slashed by 55 percent by 2030 compared to 1990 levels. For the freight transport sector, this goal is coming within ever closer reach – thanks in part to rail freight’s significantly better CO2 footprint than road haulage. In 2019, for example, data from the German Environment Agency (UBA) showed that trucks with a gross vehicle weight up- ward of 3.5 tons generated 111 grams of greenhouse gas- es per ton kilometer, against 17 grams for freight trains. Moreover, the Pro Rail Alliance states that 92 percent of rail freight services are already powered by electricity, with a 60 percent share of green power across all German rail traffic in 2019. EXTRA TRAFFIC DRIVEN BY INNOVATION Better still, innovation in the areas of digitalization and au- tomation is enabling the European rail network to absorb extra traffic without building new lines or extending exist- ing ones. In a brief interview, Dr. Martin Henke, Managing T O D A Y. 75 T O M O R R O W .

“Even more power- ful levers must be set in motion” Dr. Martin Henke, Managing Director of Railway Transport at the Association of German Transport Companies (VDV) Dr. Henke, various steps have recently been taken to promote rail as a mode of transport. Are they enough to meet the target – anchored in Germany’s Rail Transport Master Plan – of rail freight accounting for at least 25 percent of all freight transport by 2030? What has happened has been more than we expected in the past parliamentary term. But it is not enough for a modal split that gives rail at least 25 percent of the freight transport market. Nor is 25 percent nearly enough to reach the defined climate targets. To do that, we must act even faster, and even more powerful levers must be set in motion. Which levers? Substantial additional investment funding for new builds and expansion at DB, for non-government-owned rail- ways and on the service side will be necessary above all as of 2025, when genuinely faster planning procedures and other improvements to planning law will lead to faster project implementation. Political backing must not ease off in areas such as the following: • Systematically aligning CO2 pricing with climate targets • Eliminating the Renewable Energy Act (EEG) levy • Continuing to subsidize track prices • Stepping up innovation and research funding for rail • Ensuring a pan-European migration to the DAC and optimizing • asset price subsidies • Continuing subsidies for railway sidings beyond 2025 • Improving support for combined transport • Licensing only combined mode-capable semitrailers throughout Europe • Developing innovative freight wagons (modular concepts, new materials etc.) • Not planning any industrial zones without railway sidings. So there is a chance that rail will be able to success fully play the role assigned to it in the transport transition? If we stay focused on implementing the projects and pursuing the goals defined in the 2017 Rail Transport Master Plan, it is possible to double rail freight capacity by the middle of the 2030s. If all the technological developments that are currently in progress reach market readiness, virtually all road haulage traffic can be shifted onto the rails by 2050. T O D A Y. 77 T O M O R R O W .

H istorical steam locomotives long embodied a comforting feel for the ‘good old days’ – the option of choice for Sunday outings with the family. In the age of climate change, though, enthusiasm is no longer undivided when railway museums dispatch their old iron horses for joyrides in the country. The hissing clouds of steam that used to inspire awe no longer sit well with the clean image railways have built for themselves over many years. A lot has changed since the first freight trains wheezed their way across Europe. It could be said that railways ushered in their own energy transition more than 100 years before the phrase was even coined. As far back as 1879, Siemens & Halske, founded by Werner von Siemens and Johann Georg Halske, unveiled the first electric railway with power fed via the rails. In 1903, Germany’s first mainline electric train took over from steam engines on the stretch between Potsdam and Lichterfelde after a number of freight trains had al- ready done the same in England and the USA. To this day, we are still reaping the benefits of early electrification on many railway lines. The cost is huge, but so are the advantages. It is true that diesel engines too are somewhat kinder to the environment than the old steam lo- comotives. However, they remain dependent on fossil fuels and thus emit pollutants and the CO2 that harms the climate. According to the Pro Rail Alliance, e-mobility also boosts performance by enabling longer and heavier trains to run. The magic of steam trains Clouds of hissing steam used to inspire awe. Today, many find the same spectacle disconcerting. Unlike the eminently visible changes brought about by electrification, many environmentally friendly changes in freight traffic have so far taken place in small, incremental steps, the sum total of which nevertheless adds up to a revolution. Relentless gains in efficiency are the key success factor that, to this day, has empowered rail freight to compete with road haulage and inland shipping. It all began around 1850, when wheelsets and suspen- sion springs were significantly reinforced for the first time, which very quickly raised wagon payload capacities from five to ten tons. Today, the figure can often be over 60 tons, depending on the wagon type. The bogies that enabled even long wagons to take tight bends securely marked an- other important innovation. Similarly, optimized materials had a major impact. One example was the use of new types of steel as of the 1930s to reduce the wagons’ tare weight. Another was the development of more effective manufacturing methods: Welded seams, for instance, slow- ly began to replace riveted slots as of the end of the 1920s. AN INTRINSIC BENEFIT The practice of building special wagons for numerous prod- ucts also generally improved efficiency by letting individual wagons carry more cargo. On the downside, this benefit was often canceled out by the fact that goods could only be carried in one direction: The return journey was always and inevitably a ‘carriage without load’ – which is why the trend today is toward more modular underframes and containers. Progress is continually being made in the standardization of wagon components as well, allowing assemblies to be used flexibly and then recycled – an important step along the road to a successful circular economy. One frequently underestimated benefit that rail freight has over other modes of transport can be described as intrinsic and has been growing in significance since the 19th century, and that is its comparatively modest use of land. According to the Pro Rail Alliance, a kilometer of rail- way line takes up at most a third of the space used by a kilometer of freeway. Bearing in mind that five percent of all land in Germany is already used for transportation pur- poses, this difference is by no means negligible. In the future, rail will be able to extend its lead on land use if train control is further automated, as this would permit shorter intervals between transports and, hence, the more intensive use of line capacity. Digitalization too generally opens up all kinds of ways to make rail freight more efficient and kinder to the environment, one example being the close monitoring of wagons and their cargos with the aid of sensors. In all these areas, private-sector wagon leasing companies have their finger on the pulse and are doing their bit to drive rapid advances in environmentally friendly development. 79 T O M O R R O W .

MILESTONES ALONG VTG’S WAY VTG has been a member of the Alliance for Climate and Economy since 2020, participating in this organization’s Sustainable Mobility Workgroup. VTG offers sustainable rail transport solutions but also supports the sustainable mobility of its own staff – for example by subsidizing the use of local public transport and, as of 2022, offering attractive leasing terms for company bicycles. LED lighting at our workships will ultimately save the environment 66 tons of CO2 per year. The migration has been taking place step by step since 2018. By purchasing electricity from renewable sources, VTG avoids around 380 tons of CO2 per year at its headquarters in Hamburg. VTG already recycles more than 90 percent of all its waste, making an important contribution to conserving resources and reducing greenhouse gases. Pressure tests conducted at VTG workshops use five to ten times less water. It takes around 90,000 liters of water to pressure-test a tank wagon. Our workshops now collect, store and use this water several times over: five times for tests on stainless steel wagons and ten times for untreated (black) steel wagons. In the course of 2022, our railway company Retrack Germany will likewise switch to green electricity, thereby saving a further 10,250 tons of CO2 per year. At the first time of asking, VTG ranked 22nd out of the 550 or so companies that signed up in the Infrastructure category for the Global Real Estate Sustainability Benchmark (GRESB) exercise. VTG is thus one of the top four percent of sustainable investments. As early as October 2020, VTG very successfully placed corporate bonds certified as sustainable by the Climate Bond Initiative on the US and European capital markets. This marked the first green private placement in the history of the company. We stand by our responsibility to avoid violations of human rights in supply chains and will, in 2022, already ensure full compliance with all the requirements enshrined in the German Supply Chain Due Diligence Act (LkSG), which comes into force on January 1, 2023. T O D A Y. 81 T O M O R R O W .

Things are happening in Europe: Rail is blazing a sustainable trail into people’s awareness. As intense debate rages around climate issues, rail’s stock has risen impressively in the eyes of the public and political decision­makers alike. Like no other mode of transport, rail is currently the epitome of climate­friendly mobility. T he transport transition – from road to rail – is an urgent imperative. Ev- eryone with any sense of respon- sibility knows this to be true, given that transportation generates 25 percent of all greenhouse gases in the EU. And while rail accounts for only 0.4 percent of this amount, 75 percent of the EU’s domestic freight still travels by road. If the European Union is serious about its plan to become climate neutral by 2050, there is no choice but to drastically reduce CO2 emissions from freight transport. To make that happen, a number of pan-European measures and investments have already been resolved. One is the Connecting Europe Facility (CEF) funding in- strument. Others include an overhaul of the Combined Transport Directive and the pro- vision of finance for the Digital Automatic Coupling (DAC). By no means least, the Eu- ropean ‘Green Deal’ and the associated Tax- onomy Regulation should give a boost to sustainable transport. The regulation spec- ifies those economic activities that contrib- ute substantially to the EU’s climate policy goals, its aim being to promote sustainable investment in precisely these activities. Wagons are by definition one of the most sustainable modes of transport and means of packaging that exist. They have a very long service life in excess of 40 years, con- sist of fully recyclable materials and, as a rule, are constantly reused to transport different goods. On the other hand, since the regulation assesses sustainability based not on the means of transport itself but on their content, even some transports carried by environmentally friendly rail – such as consignments of fossil fuels – will no longer be classed as sustainable in the future. “Rail must continually adapt its offer- ings and market itself as an attractive option to new customers too if it is to benefit in the long term from its current competitive advantages,” says Dr. René Abel, Head of Corporate Communications at VTG. “In a few years, new propulsion technologies will al- low other modes of transport to also claim to be climate-friendly.” If passengers and goods are to switch to and stay with rail on a large scale going forward, rail must become more attractive and more flexible. Its usage must be harmonized and simplified. At the same time, rail’s competi- tive edge stands or falls with Europe-wide expansion of the rail infrastructure. The authority to decide how much is invested lies in the hands of the individual member states, however, and not all of these are fo- cused on rail. The EU’s ‘year of rail’ that just ended can therefore only mark a beginning. On the pages that follow, three rail transport experts explain why the VCD transport club advocates a federal mobility law, why European Rail Infrastructure Man- agers (EIM) believe rail must become more European, and why the Association of Ger- man Transport Companies (VDV) is planning to invest 13 billion euros. T O D A Y. 83 T O M O R R O W .

“Rail must become more European” Monika Heiming is Executive Director of European Rail Infrastructure Managers (EIM) in Brussels. Ms. Heiming, in what areas does EIM play an active role in rail freight transport, and what does it do? EIM provides very specific support, be it within the framework of rail freight corridors, better rail links to ports and terminals, demands for better funding for network expansion, or greater digitalization. One major success is the EU Commission’s project to revise the Combined Transport Directive, which is planned for early 2023 at the latest. That should open up more finan- cial and regulatory incentives for rail freight. Another milestone is the EU’s plan to reform rail freight corridors in mid-2022. The aim here is to strengthen cooperation between rail freight corridors and the multimodal TEN-T core networks, to introduce new infrastructural and op- erating parameters, and to adjust EU funding accordingly. Expanding both the rail and digital networks will be critical to a mobility shift in favor of rail. Are all the decision­makers aware of this? Digitalization is essential, because intelligent technol- ogies can augment rail network capacity, be it in the shape of the European Rail Transport Management Sys- tem (ERTMS), the Digital Automatic Coupling (DAC) or the digitalization of rail parameters, timetable processes and train route allocation. Expanding 5G networks along train lines is an important step. We at EIM engage in intensive dialogue with the EU’s institutions, the ERA and all mar- ket players, because we can only do this together. As in all sectors, the same is true here: If you don’t invest, you don’t get smart infrastructure. What must rail do to stay competitive in the long run? Rail must become visibly more European. There are still certain barriers to uninterrupted train travel in Europe and these must be torn down. More than ever, the EU and national governments must therefore act in con- cert with each other. In light of the scale of investment needed, it is above all vital to realize a rail system that is much more reliable. In ever ‘fuller’ transport scenarios, we need a rail system in which both passengers and goods arrive on time. The EU’s Green Deal will not come about if economic resources are wasted in traffic conges- tion, be it on the road or on the rails. T O D A Y. 85 T O M O R R O W .

WHAT MATTERS RIGHT NOW Freight transport harbors huge untapped potential to mitigate climate change – potential that can only be realized if rail freight is reinforced systematically. In addition, the pandemic has shown how important resilent global trading flows are. For these reasons, a rigorously pro-rail policy is needed in the current parliamentary term. Our proposals are documented below: SHIFT MORE FREIGHT TRAFFIC FROM ROAD TO RAIL 1 THE MODAL SHIFT must begin with trucks: Since 95 percent of trailers are not craneable, they cover long distances exclusively by road. By standardizing loading units and making it obligatory for new trailers to be craneable, more goods can quickly be transported in a climate- friendly way by rail. The extra capacity needed to lift all the trailers used in combined transport onto the rails by crane makes it necessary to upgrade terminals and expand railway sidings. There is also a need for investment in and improvement of the rail infrastructure, as well as for a reorganization of the cost structures in freight transport. Introducing the CO2 price was an initial positive incentive; another could be to reduce route prices further and permanently, or to exempt rail freight from the Renewable Energy Act (EEG) levy. T O D A Y. 87 T O M O R R O W .

PRESS AHEAD WITH THE DIGITALIZATION OF RAIL AND OF FREIGHT TRANSPORT DIGITALIZATION IS A GAME CHANGER in practically ever sector of the economy. Rail freight too stands to benefit from more extensive digitalization. Looking ahead, connectivity across all modes of transport can help make combined transports more attractive to logistics com- panies and shipping agents. This, however, presupposes a pan-European roadmap for the digitalization of rail freight – a roadmap that aligns and intelligently links together the various planned and existing digital initiatives. This would be in the best interests of the climate and would ease the burden on the road infrastructure. The systematic promotion of innovative approaches to rail freight digitalization and a clear commitment to combined transport on the part of Germany’s new government are therefore of pivotal importance. 5 INCENTIVIZE FINANCIAL INVESTMENT IN SUSTAIN- ABLE RAIL TRANSPORT IF RAIL FREIGHT is to hold its ground and assert its position, long-term investment incentives are indispensable. This in turn requires intelligent, forward-looking financial and fiscal policy conditions that also take due account of any knock-on and second-round effects that could counteract the targeted promotion of rail as a mode of transport. Especially as tax and levy sys- tems are fundamentally reorganized with a view to sustainability, their impact on rail must be factored in from the beginning. Obstacles should not be placed in the way of investing in climate-friendly technol- ogies. Instead, more powerful incentives are needed. The design of financial and fiscal policy conditions that incentivize investment must therefore be carefully thought through from the perspective of the targeted climate change mitigation goals. A holistic view is essential in order to identify and pre- clude any counterproductive measures at an early stage. T O D A Y. 89 T O M O R R O W .

RIVING UTURE “Anything one can imagine, other men can make real.” Jules Verne French novelist *1828, † 1905

RAIL GETS SMART Autonomous trains, digitalized logistical chains, smart wagons: Digitalization and artificial intelligence are driving an unprecedented wave of innovation and bringing peerless transparency to rail freight. For rail as a mode of transport, a new day is dawning. T O D A Y. 93 T O M O R R O W .

needed for many years, as the transition will be worthwhile only on the main lines,” says Professor Markus Hecht, who holds the chair of Rail Vehicles at TU Berlin. Apart from autonomous travel, Hecht sees a raft of other applications for digital technology and AI in rail transport. Shunt- ing, he feels, is one area where digitaliza- tion will unfold its greatest potential – and that in the near future. “Having wagons shunted fully automatically will cut the cost of rail freight and make it more efficient,” the rail traffic expert says. “Expensive inter- nal shunting traffic in particular will become much cheaper and faster.” On top of these benefits, Hecht believes smart technology can also make up for the growing shortage of marshaling staff that we are already see- ing today. PREDICTIVE MAINTENANCE Like autonomous rail links, however, re- mote controlled and hence fully automated shunting also requires heavy investment. One precondition is the Digital Automated Coupling (DAC), which should be standard issue across Europe as of 2030. “This is an unprecedented opportunity for rail,” Hecht states – and not only because it vastly sim- plifies shunting work. “DAC type 4 also lets you supply electricity to freight wagons,” he explains. “And that opens the door to new applica- tions. If you’ve got power on the wagons, you can deploy sensors and signal analytics that constantly monitor the vehicle status, for example.” Another benefit: Braking tests and technical acceptance of a goods train by the wagon technician prior to de- parture can be slashed from several hours to just a few minutes. “The coupling hugely accelerates the composition and dispatch of every train.” As a result, rail freight be- comes a more competitive option even for shorter distances. At the same time, the new technol- ogy will make vehicle maintenance much simpler. “If you’ve got digital sensors on board that permanently check the status of every wagon, your wagons will spend much less time in the repair shop than they do today, because repair work can be bundled,” Hecht explains. “That moves us T O D A Y. 95 T O M O R R O W .

our rolling stock so we can, for example, predict where more or less workshop ca- pacity will be needed.” He also highlights the value of the data for efficient wagon scheduling. Digitalization spawns all kinds of other potential applications on the rails: switches that autonomously report when they need maintenance before problems arise; sensors that track down defects in overhead lines; connected drones that use cameras to inspect wagon roofs, freight consignments and/or excessive vegetation growth along the track; and AI, which au- tonomously analyzes the vast quantities of data and decides what action must be taken when. While Davids anticipates “new and very exciting applications”, he does add a note of caution: “The point is not to do everything that is technically feasible. The important thing is to listen carefully to our customers and understand where they have problems or see the need for optimization. Our job is then to find solutions. Which is where digitalization, data streams, a host of metrics and artificial intelligence together open up completely new approaches.” DIGITAL TRANSPORT PLANNING In transport planning, some of these aspects are already present reality. Digitalization helps to interlink and optimize supply chains across all modes of transport and across na- tional borders. Customers benefit from fast- er, lower-cost and higher-quality transports. At the same time, optimized supply chains reduce energy consumption and help both the environment and the climate. T O D A Y. 97 T O M O R R O W .

Data transmission Thanks to the ETCS system, the intervals between trains can be significantly reduced. On its digital customer platform trai- go, VTG has already started to digitalize transport planning and supply chain opti- mization. Based on hundreds of millions of anonymized wagon movements between nodes, probable travel times within the network can be estimated with a fair de- gree of accuracy. Right now, VTG is working to make this kind of knowledge flow into planning tools regarding the positioning of empty wagons and to forecast arrival times, for example. SMALL STEPS, BIG IMPACT For all the speed with which technology is advancing, it will still be some years before rail goes fully digital. “Completely automated transports are undoubtedly the way of the future,” says Professor Hecht. “But in the much shorter term, lots of small digital steps in transport planning, shunting and the maintenance of wagons and infrastructure will have a hugely pos- itive effect on the speed of freight trans- port and its ability to compete.” Davids too sees the brightest pros- pects for the future in smaller use cases. And where will rail be 20 years from now? “The transport and logistics industry will have converged into a seamless ecosystem across different modes of transport,” he says. “Rail will be an essential ingredient in transport networks and will make a major contri bution to mitigating climate change.” T O D A Y. 99 T O M O R R O W .

Pioneering international role DAC type 4, the most advanced coupling there is, is to be deployed in Europe. Permanent power supply Sensors are supplied with energy; data transmission is seamless. Faster train dispatching The DAC allows brake tests to be automat- ed, so trains are ready to go in less time. Greater capacity The DAC permits longer trains as the couplings support heavier loads. Digitalized logistical chains Intelligent trains facilitate connectivity across different modes of transport. Better safety No one has to work in the ‘Berne rectangle’, the space between wagons. Optimized carbon footprint The DAC enables more goods to be transported sustainably by rail. U p to 40 percent more capacity at marshaling yards and transship- ment facilities? Variable intervals between trains to boost track capacity utilization as a function of the traf- fic situation? All this can be achieved with virtually no expansion of the infrastructure if wagons and traction units in Europe are fitted with Digital Automatic Couplings (DACs). These couplings are an essential prerequisite for the digitalization and au- tomation of rail freight, and hence for any attempt to increase the volumes carried by rail as part of the transport transition. But why is that so? The DAC, recent- ly developed in Europe, allows wagons and brake lines to be connected automat- ically and does the same for power and data lines. It will make coupling faster and accelerate operating procedures such as automated braking tests. In conjunction with electropneumatic brakes, it will also pave the way to heavier and, where neces- sary, longer trains. That will boost efficien- cy, making rail better able to compete with road. At the same time, it opens the door to IT applications to improve cargo surveil- lance, for example, and will therefore sim- plify integration in digital logistical chains. Better still, the DAC actually makes rail freight safer, because staff no longer have to work in what is called the ‘Berne rectan- gle’ – the space between wagons. More- over, these improvements in rail freight will attract more goods onto the rails, which in turn will benefit the carbon footprint of transportation as a whole. FUNDING AND MIGRATION There have been repeated attempts to switch European rail freight to the automat- ic central buffer couplings that are widely used worldwide. North America, for exam- ple, has used them since 1893. Implemen- tation has nevertheless been prevented by high costs and, within the industry, a lack of unified backing for rapid conversion to min- imize the period in which different and mu- tually incompatible systems would have to T O D A Y. 101 T O M O R R O W .

Freight’ project. The consortium has been testing the DAC in Germany, Austria and Switzerland since mid-2021. The initial re- sults of these trials have been handed over to the European collaboration platform EDDP for selection of the coupling head. The aim was for a decision on a standard- ized coupling head design to be made in fall 2021, marking a first important mile- stone. A demonstrator train fitted with the chosen coupling design then went off the blocks at the start of 2022 and is scheduled to travel through many countries all over Europe. The project receives funding from Germany’s Federal Ministry for Digital and Transport (BMDV, formerly the BMVI). Con- sortium leader Deutsche Bahn, its subsid- iary DB Cargo and the Austrian and Swiss rail freight companies Rail Cargo Austria and SBB Cargo are involved in the DAC4EU project, alongside wagon owners GATX, Ermewa and VTG. Migration to the DAC is slated to be- gin in 2025 and should be completed by 2030, as documented in the concept for the EU-wide migration of a Digital Automatic Coupling system for rail freight produced on behalf of the BMDV by consulting firm hwh Gesellschaft für Transport- und Un- ternehmensberatung mbH. Technological, operational and commercial implementa- tion of the freight wagon migration project is being coordinated throughout Europe within the framework of the EDDP. Stefan Hagenlocher, Managing Partner at hwh and the man in charge of the Technology, Stan- dards and Operations Workgroup at EDDP, is optimistic: “The work of the EDDP is ad- vancing very well. We have the backing and involvement of a broad spectrum of rail freight companies from many EU member states. Especially regarding the technical and operational requirements, we are mak- ing tremendous progress.” He neverthe- less sounds a note of caution: “Producing a workable migration roadmap remains a challenge, as does the drafting of robust concepts to promote and finance what, for rail freight, is the project of the century.” T O D A Y. 103 IN BRIEF BILLION EUROS EQUIPPING AS MANY AS 485,000 WAGONS AND AROUND 10COULD BE THE PRICE TAG FOR VTG alone has around 17,000 TRACTION UNITS IN EUROPE WITH DIGITAL AUTOMATIC COUPLINGS. 88,500 FREIGHT WAGONS AND 5,000 TANKTAINERS. Every day, an average of 54,000 freight wagons are coupled and uncoupled in Germany. For Europe, the figure is around 400,000. 760 million euros a year is the estimated economic benefit that migration will yield for the EU­27 countries, the UK, Switzerland and Norway. T O M O R R O W .

I t all runs like clockwork: Trucks bring containers, swap bodies and semitrailers full of freight to the trans- shipment terminal. Cranes lift the loading units onto waiting rail freight wagons. Trains take them to the destination terminal. The cranes then swing into action one more time before trucks cover the last mile, delivering the goods to customers. Road and rail have been a winning combination for over half a century, so it is no wonder the idea is still pop- ular today. Combined road-rail transports enjoy the best of both worlds: the flexibility of trucks just about everywhere and the eco-friendly nature of rail over long-haul distances. High hopes are therefore placed on combined transport as an element of the transport and climate transition. In 2019, combined transport accounted for about 50 percent of international rail freight, ac- cording to Ralf-Charley Schultze, President of the International Union for Road-Rail Combined Transport (UIRR). And how does he see the future? “If I want to double rail freight by 2050, I need to triple combined transport between now and then. And if the volume of combined mode freight grows by seven to eight percent every year, that alone will realize the EU Commission's planned CO2 savings for overland transport in Europe.” If you then used emission-free trucks upstream and downstream and if transshipment too were carbon-free, he adds, combined transport as a whole would be climate neutral. order mostly non-craneable trailers. So, to make sure we don’t run out of time in the race to mitigate climate change, we have joined with logistics company Vega to now offer a solution for around 90 percent of all non-craneable semi- trailers in Europe.” He is talking about the roadrailLink (r2L) system, which uses ramps to lift non-craneable semitrail- ers onto pocket wagons. Hunziker again: “We can dovetail with existing intermodal systems anywhere in Europe, so this is not a niche product. It is available – now – across the whole continent. VTG goes even further, seeing wagon and ramp as a single entity and planning an international combined-mode train system with its own railway compa- ny Retrack. Proof that r2L is a convincing best-practice approach to the transport transition came when the Pro Rail Alliance awarded it the German Transport Tran- sition Prize in spring 2022: The winning project fought off competition from more than 50 other entries. On the downside, Hunziker does see hindrances to the necessary increase in combined transport volumes. In re- sponse, VTG is lobbying governments to at least enable international rail freight cor- ridors to accommodate 740-meter trains. Other demands include electrification of these corridors, new and digitalized termi- nals, harmonized international regulations (including the digitalization of freight documents) and the establishment of a common transport language. Hunziker is adamant: Rail freight must become easier – and thus more attractive. “Every system that the market accepts has a reason for being there.” Marc Hunziker, Head of Sales Coordination at VTG Rail Europe’s intermodal segment BETTER QUALITY, MORE CAPACITY Schultze sees quality deficiencies – specifically, unpunctual- ity – as the biggest obstacle to these advances. To improve on this score he calls for prioritized lines for rail freight, for example. Another issue is that about 90 percent of trailers in Europe are not craneable. Solutions are at hand, how- ever: Special transshipment facilities next to platforms, special wagons, refits, and craneable ramps and platforms that can be transshipped together with trailers will open combined transport up for semitrailers. Many systems are, however, deployed only on certain lines. Be that as it may, “Every system that the market accepts has a reason for being there,” in the words of Marc Hunziker, Head of Sales Coordination at VTG Rail Europe’s Intermodal segment. “Ultimately, that helps to avoid CO2 emissions.” And that is not all: “Forwarding companies still SETTING AN EXAMPLE There is every chance that combined transport will contin- ue to grow. Embedding supply chains in shipping agents’ sustainability endeavors drives rail freight and, with it, com- bined transport. Rising CO2 prices are another factor. The increasing automation of transshipment terminals will allow trains to be loaded and unloaded even faster. Standardiza- tion is progressing. Various ways to transship non-craneable semitrailers are on the market, and combined transport capacity is still available. Schultze is therefore in no doubt that superior quality alone will enable existing offerings to cope with 15 to 20 percent more cargo. “Much of combined transport makes sound economic sense. Otherwise, you wouldn’t have so many shipping agents doing it,” he stress- es. “In other words: The industry is already ‘fit for 55’!” T O D A Y. 105 T O M O R R O W .

A mazon, Booking.com, Uber: In just a few short years, the major digital platforms have achieved global dominance of the B2C business space. The principle behind them is simple: The platform operator brings the supply and demand sides together in a dig- ital marketplace, creates valuable network effects and earns money from transactions for its role as ‘matchmaker’. ADDING VALUE FOR RAIL CUSTOMERS Digital platforms have enjoyed this suc- cess because they add considerable value for customers compared to traditional B2C business. The prices and content of services are always transparent on platforms, which enables users to quickly and easily access the offerings of many different providers. “The concept is very attractive to customers, so usage is brisk. Other Sellers likewise benefit from this constellation. And as growing numbers of companies join the platform, it becomes even more attractive to customers,” explains Dr. Holger Schmidt, digital economist and lecturer in digital transformation at the Technical Universi- ty of Darmstadt. “These network effects give the platform a tremendous edge and are the source of its constant growth. That gives platforms a decisive competitive ad- vantage over companies that operate more conventionally.” At the same time, platform econ- omies also tend to favor the formation of monopolies. The bulk of the world's ad- vertising spend now goes to just a handful of players. Moreover, platform operators benefit further by linking user data across different services, though this practice – in Europe at least – is often restricted by law. TRIUMPH OF THE PLATFORMS The triumphal march of the digital plat- forms has long since extended beyond retail alone. In the course of the digital transformation, this business model has rolled up industry after industry. Banking, job portals, delivery services, you name it: “Wherever platforms get involved, they are highly successful and assume a lead role in the relevant markets,” Schmidt says. He expects to see the same happen in the transport and logistics sector: “This industry is extremely fragmented. It is inefficient in many areas and is therefore predestined for platform solutions.” Compared to other industries, trans- port and logistics is still in the very early days of a digital journey that is fundamental to the platform economy. “But the potential for rail in particular is enormous,” interjects Thomas Dittmann, Head of Digital Products at VTG. “We are working hard to realize this potential based on the traigo platform we launched in 2020, and to give custom- ers transparent, individualized, multimod- al transport solutions with a focus on rail from a single source.” The traigo platform “The traigo platform simplifies all the planning that goes into transports, bringing greater speed and transparency across all modes of transport and every border.” Thomas Dittmann, Head of Digital Products at VTG T O D A Y. 107 T O M O R R O W .

networks if they want to remain viable in the future, he feels. MORE GOODS ON THE RAILS In the meantime, VTG continues to work on the digital future of rail. In collaboration with Swiss start-up Nexxiot, VTG is fitting freight wagons with connected sensors that will allow customers to carry tem- perature-sensitive products safely by rail. If temperatures deviate from the prescribed norm, customers are alerted by traigo in real time and can react immediately. Other platform-based services and features for customers are in preparation. “Digitalization will make a lot of things pos- sible in the future,” Dittmann is convinced. “Part of the strategy is, for instance, to cre- ate a digital twin of every one of our wag- ons going forward.” Each virtual twin will process data from the real vehicle. “That gives our custom- ers absolute transparency about the location and status of their wagons and helps keep disruptions to the supply chain to a mini- mum.” And fewer disruptions naturally trans- late into more transport capacity on the rails. Extra capacity is desperately needed to make rail freight transport faster, more efficient and ready to face the challenges of tomorrow: “To meet the policy targets USA 74% A M P S E S T C Microsoft Apple B Facebook S L C E S Alphabet W D P S P O P U T N I S Amazon T R D I G anchored in the master plan for rail freight transport, we need nearly 50 percent more traffic on the rails,” Dittmann says. That, he affirms, can be done only if digital concepts are developed and everyone in the industry works together. Clear and intuitive The design of the traigo user interface is a key to successful adoption by customers. “EVERYTHING DIGITAL IN 15 YEARS” Schmidt takes a similar view to Dittmann: “The transport and logistics industry must adopt cooperative approaches to overcome existing fragmentation and strengthen its collective market power. That is why there is no alternative to shared platform solutions.” His forecast? “The industry will be digitalized and totally different in ten to 15 years. By then, platforms will play the main role.” S E R A Y A A C H F J S D K EUROPE 3% AFRICA 1% N P M E C Z Share of value of the top 100 platforms ASIA PACIFIC 21% B T Sea Tencent Alibaba L C B N S S Y Y R W Meituan D K B P A P M K K N S G J V M P W O W J Ping An B G B T O M O R R O W . T O D A Y. 109

T O D A Y. 111 T O M O R R O W .

on the line between the port of Rotterdam and the Ruhr region. There are two objec- tives: to increase capacity utilization along the line, but also to improve safety. To this end, part or all of train control and oper- ating processes will be handled by a com- puter installed on the locomotive. Humans will still maintain a preferential role in over- seeing the system and as a central control instance, but will discharge these duties remotely. A one-year pilot operation phase on an open line is slated for the end of the of the project runtime. Digital technologies unleash even greater potential when they are linked to ambitious infrastructure projects. On this score, Switzerland is once again showing the way to the future of rail. Under the auspic- es of the ‘Cargo sous terrain’ project, more than 80 companies are working together to bundle fragmented freight traffic and move it underground. By 2045, the overall tunnel system will be 500 kilometers long and should link all the larger cities between Geneva in the west and St. Gallen in the east, including Basel, Lucerne, Thun and Zurich. T O D A Y. 113 T O M O R R O W .

Publishing information PUBLISHER VTG Aktiengesellschaft Nagelsweg 34, 20097 Hamburg, Germany Phone: Email: Web: +49 40 23 54-0 info@vtg.com www.vtg.com CHIEF EDITORS Alexandra Regner, Dr. René Abel Layout: C3 Creative Code and Content GmbH, Hamburg Lead Editor C3: Elena Rudolph Editing staff: Judy Born (p. 16, p. 20, p. 38, p. 82), Claus Hornung (p. 26, p. 60), Axel Kölling (p. 70, p. 78, p. 110), Jens Lehmann (p. 40, p. 92, p. 106), Gerrit Reichert (p. 6, p. 36), Florian Sievers (p. 46, p. 50), Philipp Stiens (p. 54, p. 62), Kerstin Zapp (p. 10, p. 12, p. 74, p. 100, p. 104). Art Direction C3: Eva-Maria Ostendorf Lithography: Giesick I Medien Produktion Production: Print Alliance HAV Produktions GmbH Produced in: Druckhausstraße 1 A-2540 Bad Vöslau, Austria Editorial deadline: February 2022 PICTURE CREDITS Cover: shaunl/Getty Images, p. 1: Christian Kerber, Christiane Koch, pp. 6 – 9: noun project (7), Shutterstock (5), p. 10: Stefan Charles, pp. 12 – 13: Johannes Heuckeroth/Mauritius Images, p. 20: Franz Neumayr/action press, p. 22: Stephan Görlich, Thomas Kappes, p. 26: VTG, pp. 28 – 29: VTG, p. 30: Christian Kerber, p. 31: VTG, pp. 32 – 33: Shutterstock, pp. 36 – 37: Stiftung Rheinisch-Westfälisches Wirtschaftsarchiv zu Köln (RWWA) (2), Linke-Hofmann- Busch, Salzgitter/Sammlung Westermann, VTG, p. 38: noun project (2), Shutterstock, p. 41: Benne Ochs, p. 44: Stefan Charles, p. 46: Pablo Castagnola, p. 47: public domain, pp. 50 – 56: Christian Kerber, p. 57: Christiane Koch, p. 58: VTG, p. 59: Shutterstock, pp. 60 – 61: Thomas Kappes, pp. 62 – 67: VTG, Frank Reinhold, © Heimat- und Geschichtsverein Elze und seiner Ortsteile e.V., Florian Lein (4), Philipp Stiens (3), pp. 70 – 73: Sammlung Rauch/INTERFOTO, Heinz-Dieter Falken- stein/ddp images (2), Haeckel Archiv/Ullstein Bild, p. 74: Frank Reinhold, p. 76: Shutterstock, p. 78: Alfred Gross/Ullstein Bild, p. 80: noun project, p. 82: Benne Ochs, pp. 87 – 89: Thomas Kappes, p. 92: Benne Ochs, pp. 94 – 95: SNCF/Jean-Jacques d’ Angelo (2), p. 97: Oliver Lang, p. 98: Thomas Kappes, p. 99: Albinfo, Sebastian Terfloth, p. 101: Shutterstock, p. 104: Getty Images, pp. 106 – 109: Christian Kerber, pp. 110 – 115: HyperloopTT, CST AG, Falk Fröhlich /Haslacher + Partner, pp. 116 – 117: Christoph Reichelt, CERSS, NEE, private (2). Portraits on pp. 14, 19, 23, 24, 25, 42, 77, 84 – 86, 96, 102, 108: Uli Knörzer SOURCES 62 – 67: Heimat- und Geschichtsverein Elze (eds.): “Die Elzer Waggon – Die Geschichte der Fabrik von Heine und Holländer bis Waggonbau Graaff und VTG AG”; Elze, 1st edition, 2009. http://www.hege- elze.de/buecher (last accessed: Dec. 12, 2021). 70 – 73: 1 https://www.faz.net/ aktuell/ wissen/forschung-politik/streckenschwund-der-nieder- gang-des-deutschen-eisenbahnnetzes-16545766.html (last accessed: Jan. 24, 2022). | 2 Lothar Gall, Eisenbahn in Deutsch- land: Von den Anfängen bis zum Ersten Weltkrieg, in: Die Eisen- bahn in Deutschland, published by Lothar Gall and Manfred Pohl, Munich 1999, p. 17. | 3 Ralf Roth, Das Jahrhundert der Eisenbahn. Ostfildern: Jan Thorbecke Verlag 2005, p. 48. | 4 Lothar Gall, Die Eisenbahn in Deutschland, p. 17. | 5 https://www.nytimes. com/ interactive/2021/06/04/arts/design/berthe-morisot-in- england.html (last accessed: 24.01.2022). | 6 Gerold Ambrosius, Globalisierung. Geschichte der internationalen Wirtschaftsbezie- hungen. Wiesbaden: Springer Fachmedien Wiesbaden GmbH 2018. p. 151. | 7 https://www.bpb.de/nachschlagen/zahlen- und-fakten/deutschland-in- daten/221006/massentransport (last accessed: Feb. 24, 2022). | 8 Jürgen Hüllen, Richard Neff, Privatgüterwagen in der modernen Logistik, in: Die Güterbahnen. Zukunftsfähige Mobilität für Wirtschaft und Gesellschaft, published by VDV Verband Deutscher Verkehrsunternehmen, Düsseldorf 2002, pp. 251. 92 – 99: https://www.deutschebahn. com/de/presse/pressestart_zentrales_uebersicht/Digitalis- ierung-der-Schiene-nimmt-weiter-Tempo-auf--5569450 (last accessed: Dec. 12, 2021). T O D A Y. 115 T O M O R R O W .

“Rail freight has the potential to merge the tasks of fighting climate change and increasing transport volumes. We are part of the solution that strives for zero emissions by 2050. This momentum must be used to drive growth on the rails. Our companies are stepping up to the plate – with concepts and innovations that make the rail system simpler, more digital and more efficient.” Malte Lawrenz, President of the German Association of Freight Wagon Owners (VPI) “It is important for the DAC to become reality in the foreseeable future. It is an excellent door-opener so that ETCS Level 3 can be introduced sensibly. And this level provides the possibility of increasing capacity that is so urgently needed in rail transport!” Professor Jochen Trinckauf, Holder of the Chair of Railway Signaling and Transport Safety at TU Dresden's Friedrich List Faculty of Transport and Traffic Sciences “Sustainable freight mobility will come about only if rail forms the backbone of e-mobility logistical chains. We need rail to be prioritized resolutely right now.” Peter Westenberger, Managing Director of the European Railways Network (NEE) “I would like to see the rail sector genuinely make intelligent use of all the opportunities afforded on every level by the EU’s Green Deal. Only then will we avoid getting stuck in a patchwork of standalone national measures and, instead, lead the development of a European rail and transport market. This kind of scenario will benefit all stakeholders, including the environment. I am deeply committed to this cause.” Monika Heiming, Executive Director of European Rail Infrastructure Managers (EIM)