Efficiency analysis of European Railway companies and the effect of demand

Abstract

Enhancing the efficiency of railways is key to the future of sustainable transport. The objective of this work is to identify leading railways in Europe, investigate sources of inefficiency, and guide underperformers towards best practices. We explore efficiency for some selected 21 prominent railways during 2016–2018 using Network Data Envelopment Analysis. The ranking obtained indicates averagely low efficiency scores, with slight improvements over time. Next, we build a performance matrix to determine the priority improvements for each company. The Tobit regression implies that the nation’s wealth, length of haul, length of trip, and traffic density have a significantly positive relationship with the efficiency scores. We also observed no significant impact of companies’ outputs on their efficiency scores, indicating that any minor decrease in transport demand is unlikely to impose significant constraints on efficiency scores.