Source: https://www.railfreight.com/policy/2024/02/14/db-cargo-main-beneficiary-of-fret-sncf-discontinuity/

Author: Stuart Todd

DB Cargo main beneficiary of Fret SNCF 'discontinuity'

Labour unions at Fret SNCF have highlighted that the ‘discontinuity’ of the French state railways’ biggest rail freight subsidiary has played directly into the hands of its biggest rival – DB Cargo France.

Under the terms of an agreement between France and the European Commission, in response to suspected illegal state aid to Fret SNCF, the company has been required to surrender some of the best-performing elements in its portfolio of services, notably in the intermodal segment, from the beginning of 2024.

This concerns just over 20 rail freight routes, representing 30 per cent of its traffic, expressed in tonne-kilometres transported, 20 per cent of its turnover and 10 per cent of its workforce.

“Because of the particularly high entry costs in the rail sector, only DB Cargo is capable of taking over some of the traffic relinquished by Fret SNCF. All the others (market players) are not in a position to do so,” a union official at the company claimed.

Also read: ‘Taking over Fret SNCF’s contracts is challenging for private operators’

DB Cargo disagrees

Alexandre Gallo, President and CEO of DB Cargo France and President of the Association Française du Rail (AFRA), disagreed with such an analysis while revealing to Railfreight.com that his company has taken on six of the traffic routes relinquished by Fret SNCF – mainly long-distance and/or international lines: Germany-France, Germany-Spain and south-west France to Calais – and was eyeing a further three.

Two other companies, Lineas and Regiorail, had picked up routes, too, he added. However, it is clear that DB Cargo France has been in the right place at the right time to respond to the potential market upheaval in the wake of the downsizing of Fret SNCF’s service offering.

“Fret SNCF’s customers were in a hurry to change traction providers, and most of them were worried about the industrial unrest that could result from the discontinuity and restructuring to come. They, therefore, gave preference to companies with the capacity to resume traffic flows quickly while limiting the duration of sub-contracting authorised by the discontinuity scenario,” explained Gallo.

Also read: DB Cargo France to take on some of relinquished Fret SNCF traffic routes

Available resources and expertise played a role

”As it happens, the economic crisis has led to a fall in volumes, particularly in the automotive sector, which has freed up resources at DB Cargo France, similarly with the closure of the Alpine rail line through the Maurienne Valley between France and Italy,” Gallo noted.

He also underlined that many of the routes relinquished by Fret SNCF concern intermodal traffic, operating over long distances, and in some cases involving border crossings, which is part of DB Cargo France’s core business. “It is true that in this case, ensuring quality on such trains is not within the reach of all rail companies and requires a territorial network, drivers and interoperable locomotives,” said Gallo.

Also read: Modalis: ‘Locomotives scarce for operators taking over Fret SNCF’

More available routes

Two of the traffic routes relinquished by Fret SNCF are subject to a call for tender by the French authorities; the Alpine Rail Motorway shuttle between Aiton, near Chambéry in France, and Orbassano, near Turin in Italy and a service carrying fresh fruit and vegetables from southern France to the Paris-Rungis wholesale market. They are expected to be adjudicated later this year.

As part of the agreement between France and the European Commission, Fret SNCF’s legal dissolution and the creation of two new companies (specialised in rail freight transport and maintenance) will take effect from January 2025.

Author: Stuart Todd