News / Fret SNCF faces bleak future as EC forces it to give up routes

18/09/2023

Fret SNCF is facing a bleak future as it is poised to relinquish some the best-performing elements of its core business from the start of 2024, as part of an agreement reached earlier this year between France and the European Commission on the rail freight operator’s debts.

Brussels suspected the French authorities of having granted massive illegal state aid to the SNCF subsidiary over the period 2007-2019 to cover colossal losses, which mushroomed into an accumulated debt estimated at Є5.3bn.

Rather than lodge a legal appeal against the Commission’s action, the outcome of which would be highly uncertain, France opted for an ‘economic discontinuity’ plan: a reduction in the company’s scope, its legal dissolution, the creation of two new companies (transport and maintenance) in January 2025, and the abandonment of any mention of ‘Fret SNCF’ on convoys.

Fret SNCF will give up 23 dedicated block train routes to its competitors, which account for 20% of its turnover, a spokesperson for Rail Logistics Europe, which groups all of SNCF’s rail freight subsidiaries, told The Loadstar.

Nor will the company be able to take on new contracts in this segment which represents the major part of its combined transport activities, encompassing accompanied and unaccompanied semi-trailers and tankers – a segment of the market that is currently buoyant.

Fret SNCF’s shipper customers have received a letter from the company informing them that they will have to find an alternative provider from January 1, 2024.

Among the services affected will be the so-called ‘rail motorways’ – Calais-Sète, Calais-Perpignan and Paris-Sète, operated by SNCF’s rail freight subsidiary Viia, for which Fret SNCF provides trains. The services have gathered momentum in recent years to a backdrop of support for a modal shift in freight transport from road to rail.

However, reports that the agreement also makes provision for Fret SNCF to sell off 62 of the 730 locomotives in its fleet and the transfer of 10% of its 5,000-strong workforce to the SNCF group, have not been confirmed.

International companies are also be affected too, including German intermodal operator Kombiverkehr, with four of its routes impacted including Ludwigshafen-Barcelona, Duisbourg-Vénissieux/Lyon and Cologne-Port-Bou, on the French-Spanish border.

Swiss company Hupac Intermodal, will have to make alternative arrangements for three contracts including Aarau (Switzerland)-Antwerp and Barcelona-Antwerp as will Belgian company, Lineas: Thionville (eastern France) – Port-Bou and Somain (northern France) – Irun (northern Spain).