Sweden: Heavily increased track fees a deathblow to the industry 27/01/25
< Back to list(original article in Swedish)
Heavily increased track fees a deathblow to the industry – “A punch in the stomach”
Heavy industry across the country is being hit, warn companies and experts. Now they are demanding that the government grant an exemption from the rail toll increases. "Year after year, people struggle to reduce emissions by using the railway, but instead they are hit by this enormous cost increase," says Mats Erkén, CEO of transport and logistics company ScandFibre, to TN.
– All of Sweden benefits from heavy goods being transported long distances being transported by rail and not by road, but no one is taking responsibility for the fact that today's instruments, such as railway charges, are steering in that direction, says Elin Swedlund, responsible for transport and infrastructure at the Swedish Forest Industries Association.
The new railway charges will apply from December 2024, which means a significant increase in costs for heavy goods. The increase is a very hard blow to Swedish industry, not least the Swedish steel, mining and forestry industries, but also affects companies in the trade sector. If the government does not take action, the competitiveness of Swedish industry and trade will deteriorate and companies that use the railway today may be forced to review their logistics flows in order to remain competitive globally, says Elin Swedlund, responsible for transport and infrastructure at the Swedish Forest Industries Association.
"Many companies are contacting us and are concerned that they are now forced to find new logistics flows that result in higher emissions. This will have incredibly negative consequences if nothing is done," she says.
The track fees must be urgently adjusted so that broader socio-economic benefits are taken into account, she believes.
We do not have time to wait for the Swedish Transport Administration's ongoing government assignment to be completed and implemented, as that process could take several years, says Jenni Ranhagen, CEO of the Swedish Confederation of Industry and Transport.
"The government needs to grant exemptions from the fee increases for freight trains now or take other measures to reduce the negative effects on Swedish competitiveness and the climate. Otherwise, the risk is that today's railway fees will lead to major consequences for both the competitiveness of the business community and the climate," she says in a comment.
"It's like a punch in the stomach."
Mats Erkén is CEO of the transport and logistics company ScandFibre, which specializes in rail transport for the Scandinavian forest industry. The company operates on behalf of BillerudKorsnäs, Smurfit Kappa Kraftliner and Mondi Dynäs, among others. He says that the industry learned about the cost increases at the end of 2023.
– Throughout 2024, we have tried to prepare as best we can. This has led to us being forced to move some of our transport from rail to truck and even boat in some cases. Compared to trains, both trucks and boats are a disaster from an environmental perspective. There are a lot more CO2 emissions per ton to drive a truck or boat compared to trains.
– It's like a punch in the gut. Year after year, we fight to reduce emissions by using the railway, but instead we are hit by this enormous cost increase.
He says that the company's costs for track fees will increase from 44 million in 2024 to 70 million in 2025 and 80 million in 2026.
– That's almost a doubling in two years, and that's in a situation where there's not exactly a boom.
– We are trying to pass on those costs to the customers, but it is difficult. We are also having a hard time saving elsewhere as we already had small margins before the increase. We have already lost customers, but above all, we have lost volumes.
The enormous cost increases are already hitting the company hard, and the investigation into the track fees that was appointed last year will only present its conclusions in June of this year - which is far too late, says Mats Erkén.
– At first we were a little happy that an investigation was set up and that we would be able to participate and give our views. But we were very disappointed when we realized that this investigation would take a year and that no change would happen until three years at the earliest.
"The Swedish sawmills are already in a financially vulnerable position."
The forestry industry is the country's largest transport buyer. Every year, approximately 68 million tons of goods are transported by rail within Sweden, of which approximately 17 million tons are forest products, according to the Swedish Forest Industries. In 2023, the total export value of Swedish forest products was approximately SEK 184 billion. Elin Swedlund notes that the Swedish forest industry is crucial for Sweden.
– The Swedish sawmills are already in a financially vulnerable position, not least since housing construction has slowed down both in Sweden and around the world, and since timber prices have doubled since the EU can no longer buy timber from Russia but is now turning to Sweden, and even though the pulp industry has managed thanks to large volumes, they have incredibly small margins.
There is absolutely no room for increased costs in this situation, she notes.
– If industry previously had to pay SEK 100,000 to transport its goods via train, today industry has to pay SEK 110,000 for the same train as a result of the increased railway charges. This adds up to several million SEK annually for many companies that are now forced to rearrange their logistics flows.
– In the long run, there is a risk that existing railway lines will close down, because the business community simply cannot afford to pay the train operators. Such a scenario would in turn have major negative consequences for Swedish industry's competitiveness and growth opportunities. We also know that it is difficult to get train lines back up and running once they have been closed down, which is why it is urgent to do something about the situation.
"There is a strong concern that we will have to have these high prices for several years."
In June last year, the government appointed an inquiry to review railway charges. The background is that railway charges, especially for heavier freight trains, have been higher in Sweden for several years than in many other countries.
– The fee increases in Sweden have worsened the competitive situation for freight transport by rail, which in the long run worsens the competitive situation for large parts of the Swedish business community. The increases in track fees are one of the reasons why freight train operators in Sweden are showing poor financial profitability, said Minister of Infrastructure and Housing Andreas Carlson, in a press release in connection with the appointment of the inquiry.
Last year, the business community campaigned for the increase at the turn of the year to be paused before the investigation was complete, says Elin Swedlund.
– But unfortunately we have not been heard for this. The Swedish Transport Administration's investigation will be ready by the summer, but the price list for the railway charges has already been decided up to and including 2026, so now there is a strong concern that we will have to have these high prices for several years – unless the government or the Swedish Transport Administration takes action as soon as possible.
Not only the forest industry, but all heavy industry in Sweden is affected by the increased track charges. According to the Swedish interpretation of an EU directive, in simple terms, heavy trains should pay a higher track charge than light trains, which is questioned by the Swedish Business Transport Council.
– In today's railway market law, track charges are primarily based on which train is causing the most wear and tear on the railway, without taking into account how train traffic should be optimized on the railway. We need a more flexible track charge structure that takes into account a significantly broader socio-economic perspective, says Jenni Ranhagen, in a comment.
– Goods owners would like to see track charges provide incentives to contribute to more efficient capacity utilization of the railway, for example by rewarding longer and heavier trains as this means that the same amount of goods can be transported with fewer trains, or by lowering charges for trains that run at night or for trains that make detours to make room for other trains.