In fact in recent years, the state-controlled element of the market has actually increased, with aggressive moves by companies such as Deutsche Bahn and French railways (SNCF). DHL, Schenker, Geodis, DPD and GLS, as well as numerous airlines, are partly or wholly nationalised.

Ownership by state organisations carries with it a risk, or at the very least the perception of risk, that public money can be used to create an unfair advantage over companies in the private sector. For example, Deutsche Post has fought a long battle with the European Commission (EC), the organisation tasked with overseeing free and fair competition in the European Union, over allegations that the company improperly funded part of its operations from its mail monopoly.

The suspicion of endemic state-funded meddling in the dynamics of the transport market was reinforced yesterday (July 16) by announcements that the European Commission had just launched two more investigations.

The first involves an investigation into aid granted by the French government to Sernam, the former road and rail transport services operator of SNCF. It will focus on the implementation by France of a decision taken by the Commission in 2004 authorising aid of EUR503m to Sernam but requiring the repayment of EUR41m which the company had already received. Several complaints have been made alleging that the company has not reimbursed this sum.

The complaints also allege that Sernam was not sold in accordance with the conditions imposed by the Commission. It is claimed that before Sernam was sold off, it had received an additional injection of capital from SNCF, a transaction which could constitute a new instance of state aid.

The second investigation involves a probe into the subsidy provided to Polish haulage company C. Hartwig Katowice. The Polish authorities will have to demonstrate to the Commission that the restructuring measures which have been implemented in return for aid will restore the long term viability of the company. It has also decided to scrutinise the terms of its acquisition by PKP Cargo, the Polish state-controlled rail freight operator and the price paid for its takeover.

The Commission commented that it does not yet have information which demonstrates that the takeover of C. Hartwig Katowice by PKP Cargo will be completed under "normal market conditions" and in a manner which does not involve any undue advantage in favour of PKP Cargo.

As the transport market in Europe gets even more competitive due to spiralling fuel costs, the issue of state subsidies will become increasingly controversial. Governments may feel under political pressure to bail out the largest transport providers should jobs become threatened. However, this will discriminate against the small and medium sized private operators which are already feeling real hardship and which account for the vast proportion of the industry.