France’s state-owned SNCF Group posted solid growth from rail freight in the first half of 2024 despite the discontinuity measures imposed on Fret SNCF, its main subsidiary in the sector.
Rail Logistics Europe (RLE), which groups all of SNCF’s rail freight and logistics activities, saw its revenue increase by 9.5 per cent in the first six months of last year to 917 million euros while profitability, expressed as EBITDA, increased to 91 million euros, compared to 28 million euros in H1 last year.
SNCF underlined that RLE’s markets showed very uneven trends in the first half of 2024, with some industrial verticals struggling, such as steel products, while others were buoyant, i.e. grain shipments.The chemicals vertical did well in France but not in all countries where the group is active. Moreover, the closure of rail services between France and Italy through the Maurienne Valley following a major landslide in August 2023 continued to affect cross-border traffic.
Rolling highways and multimodal transport
After a rough start to the year with various incidents and disruptions, VIIA’s rolling highway services turned in a positive performance. The lorry-rail service between Bettembourg (Luxembourg) and Le Boulou (French Basque Country) reported record load factors. On the other hand, VIIA’s Autoroute Ferroviaire Alpine remained out of service due to the landslides in the Maurienne Valley.
Market conditions have also improved for Naviland Cargo, the group’s forwarding and multi-modal transport operator, after a dip in business at the beginning of the year. The main issues here were triggered by a massive re-routing of ships around Africa, in the context of the Red Sea Crisis. RLE’s rail freight forwarding arm, Forwardis, also signed a memorandum of understanding with Hubei Port Group for European intermodal transport and logistics projects between China and Europe.
Captrain group
Finally, Captrain, which is present in markets in Germany, Belgium, Italy, Spain, Portugal, Poland and France, business was patchy but resilient in the first half of the year. In France, Captrain teamed up with construction group Eiffage Rail to win a contract for the renovation of high-speed and standard railway lines using special works trains. This contract will run from 2025 to 2030. Captrain Netherlands was sold to Austrian Rail Cargo Group at the end of May 2024.
The future of Fret SNCF
The discontinuation of Fret SNCF is being implemented to avoid heavy financial sanctions from the European Union. It was projected to reduce the company’s traffic by 30 per cent, its turnover by 20 per cent and its workforce by 10 per cent. As a result, between 15 and 20 of its best-performing routes were ceded to competitors, including several to DB Cargo France.
Fret SNCF will cease to exist at the end of the year and give way to two new rail freight entities, New Fret and New Maintenance. New Fret will be be headed by the current CEO of Fret SNCF, Charles Puech d’Alissac. However, there are restrictions on its scope of activity as under the terms of the discontinuity plan it will be prohibited from operating regular block trains and combined transport for 10 years.