Shipping giant MSC and Spanish national rail operator Renfe have taken a step towards establishing a joint venture. Earlier it was reported that MSC would take over a 50 per cent share of Renfe’s freight subsidiary, but it seems that they have now opted for a different business setup.
For the time being, there is a non-binding agreement between the two parties that proposes signing a binding contract. More specifically, it would be MSC’s subsidiary Medlog entering into business with Renfe. The latter has been looking for a new setup for its freight business, as its existing cargo department Renfe Mercancías made a 360 million euro loss in the past decade. MSC and Renfe will now be creating a joint venture, both taking on a 50 per cent share, and transferring most of their traffic to the new company.
Reportedly, it is Medlog’s subsidiary Medway that will be responsible for the operational management of the company. At the same time, Renfe is guaranteeing employment for most of its current freight employees at the new joint venture with MSC.
Renfe Mercancías to stay
According to Spanish media, Renfe Mercancías will continue to exist with a small amount of equipment to secure strategic transportation. Nevertheless, it is supposed to transfer its steel, intermodal and “multi-product” services to the joint venture.