Single Wagonload in Europe: Time for Structural Reform (opinion)
Author: Lubomir Cech
5.01.2026 | Why subsidies alone cannot save European rail freight's backbone — and what the American short line model teaches us.
Single wagonload (SWL) traffic — the collection and distribution of individual wagons or wagon groups — represents the most flexible form of rail freight, serving industries that cannot fill complete trains. Yet across Europe, this segment faces an existential crisis. While governments pour billions into subsidies, the fundamental structural problems remain unaddressed.
This analysis and opinion strives to examine the current state of European SWL operations, evaluates the effectiveness of national support schemes, and proposes structural reforms, looking also beyond the big pond — on the American Class I/short line model. The evidence suggests that without fundamental changes to how Europe organizes its rail freight network — not just how much money it spends — single wagonload traffic will continue its terminal decline.
Key figures to start: Germany's €1.9 billion DB Cargo state aid faces a hard profitability deadline of end-2026, with €350 million annual losses primarily from SWL operations. France's SNCF Fret was forced to restructure into Hexafret following illegal state aid rulings. Hungary's €16 million annual SWL subsidy expires in 2025 with extension uncertain. Meanwhile, Spain and the United Kingdom have effectively abandoned SWL entirely, and the XRail alliance covers only seven operators while excluding major freight corridors through Poland, Italy, and Romania.
The Scale of the Crisis
According to the European Commission's comprehensive 2015 study on single wagonload traffic — still the most authoritative source on EU-wide SWL statistics — wagonload freight represented approximately 80-85 billion tonne-kilometres annually across EU member states plus Switzerland, accounting for roughly 27% of total rail freight. The study documented a decline from 50% to 35-36% of total rail freight between 2004 and 2011 in countries with available data.
A decade later, the situation has deteriorated further. SBB Cargo reported a CHF 76 million loss (approximately €79 million) for its freight segment in 2024, with single wagonload volumes falling by roughly one-third over the past ten years. DB Cargo continues to lose approximately €350 million annually, with SWL operations accounting for most of these losses. Even operators in countries with strong SWL traditions face mounting pressure.
Countries Where SWL Has Effectively Disappeared
United Kingdom: The decline began with the 1963 Beeching Report and accelerated through subsequent decades. The Speedlink network, British Rail's attempt at a modern wagonload service, was discontinued in 1991 despite never achieving profitability. Today, UK rail freight operators focus almost exclusively on block trains and intermodal services. The EC 2015 study recorded UK SWL at less than 2% of total rail freight — effectively zero.
Spain: Renfe Mercancías recorded its worst performance ever in the first half of 2025, according to internal company reports cited by El Economista. The state operator focuses on full train and intermodal services, having been excluded from the second round of Spain's €70 million rail freight eco-incentives due to declining volumes. The Spanish government's July 2025 approval of 44-tonne trucks further weakened rail's competitive position. Notably, Renfe Mercancías was fined €50 million for anti-competitive practices — a sign of a troubled operator defending shrinking market share rather than growing it. Spain was not even included among the EC's 11 key countries for SWL analysis, effectively acknowledging its absence from the European SWL network.
Italy: Mercitalia's decision to withdraw from freight terminals prompted competitors including DB Cargo (via NordCargo), Rail Cargo Austria, and SBB Cargo to expand their Italian operations. While this preserved some wagonload connectivity, the incumbent's exit eliminated the domestic network that traditionally fed international flows. All seven of Italy's hump marshalling yards have been decommissioned or converted to flat shunting operations.
Countries Under Severe Pressure
Germany: DB Cargo's situation exemplifies the contradiction at the heart of European SWL policy. The operator received €1.9 billion in EU-approved state aid — a decision heavily criticized by competitors and requiring strict conditions. DB Cargo must achieve profitability by end-2026, a deadline that appears increasingly unrealistic given structural loss-making in SWL operations. The company has announced 5,000 job cuts by 2028 and is concentrating its network on profitable corridors, effectively abandoning peripheral routes. Separately, Germany approved a €1.7 billion SWL support scheme in May 2024 covering the period to 2029, including €300 million specifically for 2024-2027. The question remains: how much subsidy is enough when the underlying business model doesn't work?
France: SNCF Fret's restructuring into Hexafret in January 2025 was not a voluntary reform but a forced response to illegal state aid rulings. The new entity operates with 4,000 employees, significantly reduced from its predecessor. France has committed €156 million for marshalling yard investment and €200 million annual support through 2030, yet the political crisis has left the sector uncertain about future funding levels. The December 2025 comments from a senior industry figure confirmed that the 'political situation in France is not helping' the rail freight sector.
Switzerland: SBB Cargo's situation prompted the Swiss shippers' association VAP to accuse the operator of making SWL 'uncompetitive' through rapid price increases. Despite Switzerland's traditionally strong rail freight culture — supported by night bans on trucks and distance-based truck taxes — SBB Cargo recorded a CHF 76 million loss in 2024. The government has granted SBB Cargo a sole provider concession for SWL services until 2029, backed by approximately 260 million Swiss francs (€278 million) in support. A new production model will be introduced from the December 2026 timetable change, acknowledging that current operations are unsustainable.
Poland: PKP Cargo's situation deserves nuanced analysis. The incumbent operator, which reported a €562 million net loss for 2024, has entered court-led restructuring proceedings since June 2024. The company has lost approximately 30% of its market share over recent years and focuses its recovery strategy on intermodal and full-train services rather than SWL. However, SWL has not disappeared from Poland — Rail Cargo Group explicitly offers 'single-car transport and block trains' in the Polish market, and international operators continue to serve Polish customers. The EC 2015 study recorded Poland at 17% SWL share (8.44 billion tkm), but this traffic is increasingly handled by international operators rather than the domestic incumbent.
Countries Maintaining SWL Operations
Austria: Rail Cargo Group remains one of Europe's most committed SWL operators, maintaining approximately 40% SWL share according to the EC study. The TransFER hub-and-spoke network demonstrates that modern production methods can improve SWL economics. RCG's TransFLEX service, utilizing three EURODUAL dual-mode locomotives, achieved 1.87 million kilometres and transported 2.25 million net tonnes in 2024 — proving that technological investment can enhance SWL viability.
Czech Republic: ČD Cargo maintains a significant SWL network with approximately 41% share, though the infrastructure manager SŽDC has announced plans to close up to 70% of private sidings — a decision that would devastate the network's reach if implemented.
Hungary: The government's SWL subsidy scheme, approved by the European Commission in 2021, provided HUF 6.4 billion (approximately €16 million) for 2025. Eleven companies participate in the scheme, which supported transport of 4.7 million tonnes in 2022. However, the scheme officially expires at end-2025, and HUNGRAIL's lobbying for a 2026-2030 extension faces uncertain prospects. Funding was exhausted before year-end 2024, highlighting the scheme's inadequate scale.
Sweden: Green Cargo operates approximately 400 freight trains daily, equivalent to roughly 10,000 truck transports, serving 270 locations in Sweden. The company remains a committed XRail member, though it faces the same cost pressures affecting all European SWL operators.
The American Alternative: Class I and Short Line Railroads
While European policymakers debate subsidy levels, the United States operates a rail freight system that handles individual car shipments profitably through a fundamentally different structure. Understanding this model offers insights — though not a direct template — for European reform.
How the American System Works
The US freight rail network is divided between six Class I railroads (BNSF, Canadian National, Canadian Pacific Kansas City, CSX, Norfolk Southern, and Union Pacific) and approximately 603 Class II and Class III 'short line' railroads. According to the American Short Line and Regional Railroad Association (ASLRRA), short lines operate 50,000 miles of track — nearly 40% of the national network — and handle in origination or destination one out of every four rail cars moving on the national system.
The division of labor is economically rational. Class I railroads focus on long-haul, high-volume trunk routes where their scale provides competitive advantage. Short lines handle first-mile and last-mile collection and distribution — the equivalent of European SWL operations — where their lower cost structure and customer focus enable profitable operations that would lose money for Class I operators.
Key success factors include: standardized interchange agreements allowing seamless car handoffs between operators; federal support through the Consolidated Rail Infrastructure and Safety Improvements (CRISI) grant program, which has provided over $1.4 billion for short line infrastructure; the 45G tax credit supporting short line track maintenance; and crucially, flexible labor arrangements and lower overhead costs that enable short lines to serve customers profitably on routes their Class I predecessors abandoned.
The ASLRRA notes that short lines inherited track experiencing 'years of deferred maintenance by their previous owners' yet 'most short lines invest a minimum of 25% of their annual revenues in rehabilitation and maintenance' — far exceeding typical industry reinvestment rates. This entrepreneurial model turns Class I cast-offs into viable businesses.
Operator Responses: Contraction Meets Innovation
As the 2026 timetable change approaches, European SWL operators are implementing divergent strategies that illuminate the segment's uncertain future. The common thread is network contraction combined with efficiency improvements — but the Austrian approach stands apart as a genuine attempt to innovate rather than merely shrink.
Germany's DB Cargo has reorganized its single wagonload operations under a new dedicated business unit led by Daniel Baral, focusing on network stabilization through encapsulated resource cycles, flexible routing for improved resilience, and compression of long-distance traffic to increase frequency. The strategy explicitly prioritizes "fewer but more efficient connections" while the company simultaneously invests in 150 Vectron Dual Mode light locomotives optimized for SWL operations. Yet DB Cargo's transformation remains constrained by the EU's end-2026 profitability deadline, and internal discussions reportedly considered reducing SWL services by up to 80% — a scenario that would eliminate approximately 8,000 jobs and devastate industrial supply chains in steel, chemicals, and automotive sectors.
Switzerland's SBB Cargo will introduce a completely new production model from the December 2026 timetable change, developed in collaboration with customers under the Suisse Cargo Logistics framework. Service points with insufficient demand will be eliminated from the SWL network, though SBB estimates 98% of current wagon volumes can still be handled under the reduced configuration. The federal government has committed CHF 260 million (approximately €278 million) through a performance agreement for 2026-2029, effectively acknowledging that SWL cannot survive without public support. SBB is simultaneously ordering up to 570 flat wagons and 270 bulk wagons from Tatravagonka, standardizing its fleet to just three wagon types to simplify maintenance and reduce costs. The shippers' association VAP has criticized rapid price increases that make SWL "uncompetitive," highlighting tensions between commercial sustainability and network preservation.
Czech Republic's ČD Cargo has announced significant network restrictions effective January 1, 2026, dividing its tariff points into three categories: regularly served (green), served with restrictions and additional charges (blue), and limited for SWL with exceptions only (yellow), plus completely unserved points (red) where dispatch authorization will be withdrawn. The restructuring explicitly acknowledges that many stations saw minimal or zero SWL traffic in recent periods and cannot justify service costs even with optimized coordination. Full train services remain unrestricted to "limited" points, but customers seeking SWL access must negotiate individual arrangements with commercial managers at least seven days in advance. The visual network map published by ČD Cargo shows a dramatic reduction in regularly accessible points.
Sweden's Green Cargo implemented network restructuring from the 2025 timetable change, eliminating approximately 60 of its 270 toll points across some 30 locations. Reports suggest this could render around 100 of the company's 400 locomotives redundant. The company frames the changes positively — emphasizing "more robust and reliable traffic" with higher frequency and punctuality on core corridors — while reducing shunting locations (ceasing operations at Ånge, adjusting at Sävenäs, concentrating at Gävle, Sundsvall, and Helsingborg). Green Cargo remains committed to SWL as part of its corridor strategy, but the network now explicitly focuses on routes "where we already have high volumes."
Austria's Rail Cargo Group presents a striking contrast to this contraction narrative. Rather than retreating, RCG has invested in technologies that expand SWL's addressable market. The MOBILER system — a hydraulic container transfer mechanism that enables cargo movement between truck and wagon without cranes or private sidings — has attracted €75 million in investment and a partnership with MFD Rail for up to 600 specialized wagons. This technology directly addresses the siding certification problem that constrains SWL elsewhere: customers without rail connections can access the network through multimodal solutions.
The Austrian approach has generated concrete commercial wins across diverse cargo types. RCG transported 1.4 million tonnes of wood for Papierholz Austria in 2024. A new gypsum recycling loop demonstrates circular economy applications, with construction waste moving by rail to processing facilities and recycled material returning to building sites. The Koralmbahn corridor opening enabled expanded logistics partnerships with cement producer Alpacem. Partnerships with Brau Union and SPAR use curtainsider swap bodies for beverage distribution to retail warehouses throughout Austria. Bunzl & Biach continues longstanding waste paper transport cooperation. Coca-Cola beverages move by SWL, reducing 560 truck journeys annually.
The Austrian government has reinforced this commercial activity with policy support. Legislation now considers rail sidings "essential prerequisites for modal shift," and the 2023 Waste Management Act mandates increased rail transport for waste streams — creating regulatory demand that justifies MOBILER investment.
The divergence is instructive. Germany, Switzerland, Czech Republic, and Sweden are implementing defensive restructuring: contracting networks, reducing service points, focusing on profitable corridors, and hoping efficiency gains offset volume losses. Austria is attempting offensive restructuring: investing in technology that expands the customer base, securing policy frameworks that mandate rail use, and developing multimodal solutions that overcome infrastructure constraints. Whether the Austrian model can be replicated elsewhere depends on factors including government policy support, operator financial capacity, and customer willingness to adopt new logistics approaches. But it offers at least one proof point that SWL innovation is possible, not merely preservation or decline.
European Application: Possibilities and Prerequisites
Could a similar model work in Europe? The concept has been discussed: France's SNCF commissioned a 2010 study on 'opérateurs ferroviaires de proximité' (local railway operators), and Genesee & Wyoming — one of America's largest short line conglomerates — already operates a European region. Germany has local freight operators functioning similarly to short lines.
The potential benefits align with SWL economics. If local operators with lower cost structures handled first-mile collection and last-mile distribution, trunk operators could concentrate on profitable international corridors of 300+ kilometres. This would eliminate unprofitable short-haul segments from incumbent books while preserving access to the 12,000+ European rail freight access points that sustain industrial connectivity.
Local government funding — already common in the US, where states and municipalities support short lines serving regional industries — could justify maintaining branch lines that national cost-benefit analyses reject. The argument is straightforward: keeping freight on rail reduces road wear, maintains local industrial access, and preserves jobs in areas where road logistics would concentrate activity elsewhere.
However, critical prerequisites are missing in Europe:
Interoperability: The US benefits from standardized gauge, unified signaling, and seamless interchange agreements. Europe's ERTMS rollout — targeting harmonized signaling — won't achieve comprehensive coverage until approximately 2040. Until then, border crossings remain operational friction points that the American system doesn't face.
Language: US railroaders communicate in English from coast to coast. European train drivers currently require B1-level proficiency in each country's operational language. The European Rail Freight Association (ERFA) advocates English as a single operational language, but the Community of European Railway and Infrastructure Companies (CER) estimates training costs of €350 million for Germany alone, with unions opposing the change. The 2017 Rastatt tunnel collapse demonstrated the cost of language barriers: trains couldn't use alternative routes because drivers lacked certification for the languages of neighbouring countries.
Siding certification: European private sidings require certification that can be expensive and administratively burdensome. In countries like Romania and Poland, certification costs effectively discourage industrial rail connections. The US system of private sidings connecting directly to short line trackage faces no comparable barriers.
The lesson from America is not that Europe should copy the Class I/short line structure, but that structural reform — changing who operates what, with what cost structure, under what regulatory framework — matters more than subsidy levels. Pouring money into loss-making incumbents doesn't create the conditions for sustainable SWL; changing the operating model might.
Operational Efficiency: Technology That Works Today
While structural reform requires policy changes, several operational improvements could enhance SWL competitiveness immediately. These technologies are proven, available, and being deployed by leading operators.
Dual-Mode and Multi-System Locomotives
One of SWL's persistent inefficiencies is locomotive changes at electrification boundaries and borders. Dual-mode locomotives eliminate this friction by operating on electric traction where available and switching to diesel for non-electrified sections including industrial sidings.
The Stadler EURODUAL combines 6.15 MW electric power with a 2.8 MW diesel engine, enabling seamless operation across electrified main lines and non-electrified industrial access. Rail Cargo Group's TransFLEX service demonstrates the potential: three EURODUAL locomotives achieved 1.87 million kilometres and transported 2.25 million net tonnes in 2024, with 'Last Mile' functionality enabling direct industrial siding access without locomotive changes.
The Vectron Dual Mode is based on proven components of the Vectron platform. The locomotive has a track gauge of 1,435 mm, a service weight of 90 tons, and is designed for 15 kV AC power systems. It delivers a power output at wheel of max. 2,400 kW using catenary supply and max. 2,000 kW using diesel mode. The diesel tank has a capacity of 2,600 liters, and the maximum operating speed is 160 km/h. A train power supply is available. A version of the locomotive that supports both 15 kV and 25 kV AC systems is also available. At the moment (early 2026), the locomotive is approved for operations in Germany and Austria.
Multi-system electric locomotives (capable of operating under different voltage systems) have become standard for international traffic. The Alstom Traxx Universal, equipped with ETCS Baseline 3, operates across ten or more countries without electrical system constraints. This technology exists; the question is deployment scale and investment priorities.
Language and Communication Solutions
The language barrier debate exemplifies European rail's inability to resolve known problems. Current regulations require train drivers to hold B1-level proficiency in each operational language — meaning a driver operating Germany-France-Spain routes would need certification in German, French, and Spanish. This limits driver deployment flexibility and creates bottlenecks during disruptions.
ERFA proposes a phased approach: maintaining safety through standardized communication protocols while progressively introducing English as a common operational language. The association notes that truck drivers crossing European borders face no comparable language requirements, creating an asymmetric regulatory burden on rail.
Technology offers interim solutions. The Translate4Rail project developed tablet-based translation tools enabling communication between drivers and traffic controllers speaking different languages. Switzerland operates with reduced A1+ language requirements plus standardized command glossaries, demonstrating that safety can be maintained without full B1 proficiency. RailNetEurope's Language Programme has trained English-speaking dispatchers in national traffic control centers since January 2020.
The European Commission's 2019 amendment to the Train Driver Directive created a legal basis for pilot projects testing alternative language requirements. Six years later, comprehensive pilots remain limited. The sector's inability to resolve this known barrier — where solutions exist and are being used in other contexts — illustrates broader governance failures affecting SWL competitiveness.
Marshalling Yard Automation
Marshalling operations represent approximately 22% of SWL costs according to the EC study (marshalling services at first and last yards plus intermediate marshalling). Automation can significantly reduce these costs while improving reliability.
The Kijfhoek marshalling yard in the Netherlands received €110 million investment in Siemens Trackguard Cargo MSR32 automation system, achieving approximately 15% efficiency improvement in intermodal scheduling and shunting operations. Remote-controlled shunting locomotives reduce labour requirements while enabling 24-hour operations.
The Digital Automatic Coupler (DAC) offers transformative potential for yard operations. Automatic brake testing, elimination of manual coupling, and enabled train preparation automation could reduce yard dwell times significantly. However, European DAC deployment remains contentious — hailed by some as essential modernization, criticized by others for implementation costs during a period of financial stress for operators.
The Distance Equation: Why Longer Is Better
European SWL economics suffer from a fundamental problem: the segment is profitable over longer distances but loses money on short hauls. The EC study documented that collection/distribution and marshalling represent nearly half of total SWL costs — fixed overhead that must be spread across transported distance.
This creates perverse incentives under current structures. Incumbent operators maintain domestic networks including short-haul segments that lose money individually but are considered necessary for network completeness. Cross-subsidization from profitable long-haul traffic sustains unprofitable branches — until financial pressure forces network contraction, eliminating access points that fed the profitable flows.
A structural solution would separate local collection/distribution from trunk haulage. If local operators (with lower cost structures) handled first-mile collection and fed consolidated wagons to trunk operators, the economics change:
Local operators would need to cover only local collection costs plus a margin — achievable at lower overhead than national incumbents require. Trunk operators would receive pre-consolidated wagons for long-distance international haulage of 300+ kilometres — the distance range where rail excels against road. The elimination of unprofitable short-haul segments from incumbent books would improve their financial position, enabling investment in quality improvements that attract customers.
Rail Cargo Group's TransFER hub-and-spoke network demonstrates elements of this approach, with feeder services connecting to consolidated trunk trains. The model works within one corporate structure; the question is whether it could work across multiple operators, different ownership structures, and varying national regulatory frameworks.
The Intermodal Question: Could Combined Transport Replace SWL?
Before investing further billions in preserving single wagonload operations, policymakers must confront a fundamental question: could combined transport — the movement of containers, swap bodies, and semi-trailers by rail with truck collection and distribution — simply replace SWL? The theoretical case is compelling. The practical reality is more complex.
The Case for Intermodal Replacing SWL
The arithmetic appears straightforward. Combined transport eliminates the most expensive elements of SWL — marshalling yards with their complex operations, specialized wagon fleets, and labor-intensive sorting processes. Instead of gravity hump yards requiring €110 million automation investments, intermodal terminals use reachstackers and gantry cranes for standardized container handling. A small intermodal hub can operate on 25-50 acres for €5-10 million, compared to large-scale marshalling facilities costing €100-150 million.
The first and last mile handling shifts to trucks — but shorter distances mean employment for local drivers rather than elimination of trucking jobs. Electric trucks become viable for these short-haul distribution runs, potentially addressing both the driver shortage and environmental concerns. The European Commission's 2022 study on transhipment technologies found that standard vertical handling (gantry crane or reachstacker) with containers becomes competitive with road-only transport at distances around 1,000 kilometres, and achieves lower external costs at just 600 kilometres.
Containerization revolutionized maritime shipping — the analogy suggests a similar transformation could work for European rail freight. The UIC/UIRR 2024 report noted that combined transport now accounts for at least one-third of all rail tonne-kilometres in Europe, growing 8.7% between 2018 and 2023 despite a difficult 2023 (-8%) driven by infrastructure disruptions. The UIRR envisions 3% annual growth through 2040, when the market would be two-thirds larger than today.
Why Combined Transport Is Not Growing Either
Here's the uncomfortable truth: if combined transport were a simple replacement for SWL, it would be growing rapidly. It isn't. Combined transport in Europe dropped 0.79% in Q3 2024 compared to 2023. The Q1 2024 results were down 3.89% year-on-year. Even the recovery in 2024 — with combined transport growing 5.19% in consignments and 8.41% in tonne-kilometres — was driven almost entirely by domestic operations, which expanded 10.6%. Cross-border services grew only 2.74%, hampered by infrastructure disruptions, and routes crossing Germany actually declined 1.5%.
The port-to-hinterland model works. Maritime containers moving from Rotterdam, Hamburg, or Antwerp to inland distribution centers follow predictable, high-volume corridors where rail competes effectively. But continental combined transport — the flows that would replace SWL — struggles with the same fragmentation, interoperability barriers, and infrastructure constraints that plague wagonload traffic. The 2023 Gotthard Base Tunnel derailment and Maurienne Valley landslide reduced available Alpine crossing capacity by half, forcing operators onto longer, more expensive detour routes.
The Cranability Problem — And Its Solutions
Europe's trucking fleet creates a fundamental obstacle: approximately 95-97% of Europe's 1.8 million semi-trailers are not craneable. Unlike ISO containers designed for vertical lifting, standard semi-trailers lack the reinforced corners and grappler pockets required for crane handling. The European rail network was built before semi-trailers existed, and its loading gauges — particularly the P400 standard required for 4-metre high trailers — remain incomplete across major corridors. France only opened its network to P400 traffic in 2020, and still requires special permits ('Autorisation de Transport Exceptionnel') for each train, with operators like CFL Cargo needing to apply for permits valid only six months.
Several technologies address the cranability gap. CargoBeamer, a Leipzig-based company that has raised €205 million over the past year including €90 million in government grants, developed horizontal loading technology that transfers any semi-trailer onto rail wagons in 20 minutes — nine times faster than conventional crane terminals. Its patented wagon system enables 38 semi-trailers to be loaded simultaneously with full automation, targeting an 18-terminal, 50-route network over the next decade addressing an estimated €88 billion addressable market.
Other solutions include VTG's r2L (roadrailLink) technology — awarded the German Transport Transition Prize in 2022 — which adds a craneable connector allowing any standard semi-trailer to be lifted onto pocket wagons. Modalohr/Lohr Industry developed wagons with pivoting cradles for horizontal loading. ISU, NiKRASA, and Megaswing offer alternative approaches. Each addresses the non-craneable trailer problem differently, but none has achieved the scale necessary to transform continental combined transport economics.
Swap Bodies vs. Semi-Trailers: Europe's Suboptimal Choice
Europe's preference for semi-trailers over swap bodies represents a structural inefficiency that combined transport advocates rarely acknowledge. Swap bodies — lightweight units with legs that stand on the ground, transferable between truck chassis and rail wagons — are cheaper to manufacture, lighter (meaning more payload capacity), more rail-compatible, and easier to transship than semi-trailers. A swap body at 45 feet offers 33-pallet capacity, matching trailer dimensions while weighing less.
Yet Europe's road transport industry standardized on semi-trailers because they couple directly to tractors without needing a separate chassis. The resulting lock-in means billions of euros in semi-trailer assets that cannot efficiently use rail. In Germany alone, semi-trailer transport performance is only twice that of containers, despite semi-trailers dominating road freight. Poland shows an even starker mismatch: container/swap body rail transport is 37 times higher than semi-trailer transport.
One could argue that subsidizing the transition from non-craneable semi-trailers to craneable swap bodies or intermodal-compatible trailers represents a one-time investment — unlike the perpetual subsidy bleeding required to sustain SWL operations. Equipping new trailers with grappler pockets and reinforced frames adds cost, but creates assets that can use rail throughout their service life. The market hasn't moved this direction voluntarily because individual trucking companies face a collective action problem: converting to craneable equipment only makes sense if intermodal terminals and services exist to use it, but terminals won't be built without sufficient demand.
The Last Mile Remains: Why Trucks Don't Disappear
Combined transport's environmental and congestion benefits depend on the assumption that trucks disappear from long-distance roads. But trucks don't disappear — they concentrate on the first and last miles. A factory served by SWL today might connect directly to rail through its own siding. The same factory served by combined transport requires a truck trip to the nearest intermodal terminal, likely 25-50 kilometres away.
For residential areas, industrial parks, and city centers, this means trucks on local roads regardless of whether the trunk haul goes by rail. Electric trucks reduce emissions but don't reduce congestion, noise (except engine noise), or road wear from heavy vehicles. They certainly don't eliminate pedestrian safety risks in urban areas. The modal shift to rail occurs on intercity corridors, while local communities still experience truck traffic.
Small terminals or sidings with reachstackers could theoretically bring intermodal access closer to industrial customers, reducing truck distances. But this recreates some of SWL's infrastructure requirements — local rail connections, handling equipment, staffing — while eliminating the flexibility of direct wagon loading at customer sidings. The question becomes whether local government subsidies for small intermodal terminals make more economic sense than subsidies for SWL services that connect directly to factories.
A Containerization Moment for European Rail?
Containerization transformed sea shipping because Malcolm McLean identified a standardized unit that could move seamlessly between ship, rail, and truck. The container's genius was its universality — the same box moves globally without rehandling cargo. Could European rail freight achieve a similar breakthrough?
The honest answer is: probably not in the same way. Sea shipping had a clear problem — expensive, time-consuming cargo handling at ports — and containers solved it. European rail freight has multiple, interconnected problems: gauge compatibility, signaling systems, language barriers, infrastructure bottlenecks, operator fragmentation, and yes, wagon versus container versus trailer standardization. No single innovation addresses all of these.
Moreover, road transport — rail's competitor — has no equivalent interoperability barriers. A Polish truck can drive to Portugal without changing signaling systems, language certification, or loading gauge. Until rail achieves comparable seamlessness, it competes at a structural disadvantage regardless of loading unit type.
What might work is a portfolio approach: combined transport for the corridors and commodities where it competes effectively (mainly port hinterland and high-volume intercity flows), preserved SWL for industries requiring direct siding access (chemicals, steel, heavy manufacturing), and acceptance that some freight — particularly time-sensitive, geographically dispersed, or low-volume flows — will remain on roads. The policy question then becomes how to optimize each segment rather than seeking a single solution that doesn't exist.
Policy Recommendations
The evidence suggests that current approaches — national subsidies to loss-making incumbents combined with voluntary production cooperation through XRail — are insufficient to reverse SWL decline. More fundamental reforms are needed.
For European Policymakers
Accelerate ERTMS deployment: The 2040 target for comprehensive harmonized signaling is too distant. Prioritize freight corridors where interoperability barriers most constrain SWL competitiveness. Without technical harmonization, structural reform enabling efficient operator handoffs remains impractical.
Resolve the language question: The Train Driver Directive revision offers an opportunity to implement progressive language harmonization. The Swiss A1+ model with standardized command glossaries demonstrates that reduced requirements can maintain safety. Fund the Translate4Rail tools and mandate their availability at border sections.
Enable local operator models: Create regulatory frameworks allowing 'short line' style operators to handle local collection and distribution. Simplified safety certification for operators serving limited geographic areas, combined with standardized interchange agreements with trunk railways, could enable the cost structures that make local SWL viable.
Harmonize siding certification: Industrial rail connections face prohibitively expensive certification requirements in some member states. EU-level standardization of reasonable certification costs would preserve the access points that SWL requires.
Complete P400 gauge clearance: The Commission's study identified Spain, France, and Italy as requiring 75% of European P400 upgrade investments — approximately €7.7 billion total. Without this infrastructure, continental combined transport cannot scale to replace road freight at meaningful volumes.
For National Governments
Condition subsidies on structural reform: Germany's €1.9 billion DB Cargo state aid and France's €200 million annual Hexafret support should require concrete steps toward sustainable business models, not merely delay inevitable restructuring. Subsidy conditions should include network rationalization plans, local operator partnership requirements, and measurable efficiency improvements.
Fund local collection infrastructure: Following the US model where states and municipalities support short lines serving regional industries, European local governments could fund branch line maintenance and siding connections. The argument — keeping freight on rail reduces road costs, maintains industrial access, preserves local employment — applies in Europe as in America.
Consider one-time fleet transition support: Subsidizing the purchase of craneable trailers or swap body systems represents a capital investment with lasting benefit, unlike perpetual operational subsidies for SWL. Programs could target new vehicle purchases, accelerating fleet turnover toward intermodal-compatible equipment.
Extend proven subsidy schemes: Hungary's €16 million annual SWL subsidy, expiring in 2025, demonstrates that targeted support can maintain SWL viability. The scheme's exhaustion before year-end indicates inadequate scale rather than flawed design. Extension with increased funding — while implementing complementary structural reforms — would preserve network access during transition.
For Operators
Invest in dual-mode traction: The EURODUAL and Vectron Dual Mode locomotives eliminate operational friction at electrification boundaries. DB Cargo's 150-unit order demonstrates industry direction; operators still running locomotive changes at every border crossing are choosing inefficiency.
Develop local operator partnerships: Rather than maintaining loss-making branch operations internally, trunk operators could partner with local operators for first-mile/last-mile services. This requires accepting that some activities are better handled by specialists with different cost structures.
Focus trunk operations on profitable distances: The economics favour international hauls of 300+ kilometres. Network strategies should concentrate resources on corridors where rail's advantages over road are greatest, with local collection handled through partnerships or subcontracting.
For Customers
Commit to long-term contracts: SWL infrastructure investment requires demand certainty. Customers seeking reliable rail service should offer multi-year volume commitments that justify operator investment in access points and equipment.
Accept rail-optimized logistics: SWL cannot match truck flexibility for just-in-time delivery of small quantities. Customers benefiting from rail should adapt logistics to rail's strengths: consolidated shipments, scheduled services, longer lead times compensated by lower unit costs and environmental benefits.
Conclusion: Reform or Decline
European single wagonload traffic faces a choice between structural reform and terminal decline. The current approach — billions in subsidies to loss-making incumbents, voluntary cooperation through geographically limited alliances, and postponed decisions on known barriers like language requirements — has failed to reverse SWL's downward trajectory.
The American Class I/short line model offers not a template but a proof of concept: rail freight can handle individual car shipments profitably when operating structures match economic realities. Class I railroads focus on long-haul efficiency; short lines handle local collection with lower cost structures; interchange agreements enable seamless handoffs; federal and state support funds infrastructure that serves public interest.
Combined transport cannot simply replace SWL — it faces its own growth challenges, infrastructure constraints, and the fundamental problem that 95% of European trailers cannot use existing intermodal systems. But technologies like CargoBeamer's horizontal loading, VTG's r2L connectors, and expanded swap body usage could expand combined transport's addressable market significantly if infrastructure investments — particularly P400 gauge clearance — and one-time fleet conversion support accompany them.
Europe's path to sustainable rail freight requires portfolio thinking rather than single-solution approaches. Local operators handling collection and distribution. Trunk railways focusing on profitable international corridors. Combined transport serving high-volume flows. Preserved SWL for industries requiring direct rail access. Technical harmonization enabling efficient interchange across all these modes. Regulatory frameworks supporting rather than obstructing the division of labor that economics demand.
The technologies exist: dual-mode locomotives, automated marshalling, translation tools, horizontal transshipment systems. The economic logic is clear: longer distances favour rail; local collection requires different cost structures; not all freight belongs on rail. The policy options are known: ERTMS acceleration, language harmonization, local operator frameworks, siding certification reform, P400 infrastructure investment, fleet transition support.
What's missing is political will to move beyond subsidy-based preservation of current structures toward reform-based creation of new ones. DB Cargo's 2026 profitability deadline, Hungary's 2025 subsidy expiration, SBB Cargo's 2026 production model change — these are forcing functions that could drive reform or merely accelerate decline.
The chemical industry, automotive sector, steel producers, and agricultural businesses that depend on rail freight have a stake in the outcome. So do the European climate goals that assume modal shift from road to rail. So do the 12,000+ industrial rail access points that would be lost if SWL disappears — access points that combined transport cannot easily replace.
The question is not whether reform is needed — the evidence is overwhelming. The question is whether Europe's railway sector and its policymakers will implement reform before the remaining infrastructure and expertise erodes beyond recovery. Containerization saved sea shipping because the industry recognized that incremental improvements to break-bulk cargo handling would never match the transformative potential of standardization. European rail freight awaits its equivalent insight — the structural change that unlocks competitive potential rather than perpetually subsidizing competitive weakness. Time is not on their side.