The Social and Economic Committee (CSE) of Fret SNCF recently sent a letter to the French government asking to introduce a moratorium to review the discontinuation of the company. “We believe that the hasty action taken by the French government and the SNCF management will not allow the railways to make the necessary changes”, the letter stated.
The French government had to come up with a massive restructuring plan for Fret SNCF after the European Commission (EC) launched an investigation into possible unfair state aid. According to the EC, Fret SNCF had around 5,3 billion euros of debt between 2007 and 2019 that was cancelled by its mother company SNCF. According to the CSE letter, this investigation led to “an unprecedented crisis for over a year now, the effects of which are devastating”.
The government decided to implement major changes concerning Fret SNCF to avoid harsher punishments from European institutions. Among other initiatives, the company was banned from carrying out combined transport and blocktrain services for the next 10 years. However, many French rail freight players pointed out that taking up Fret SNCF’s volume will be quite the challenge for the private sector. Moreover, the company is supposed to be split into two new entities from the beginning of 2025. On the other hand, the CSE letter highlighted that the sector is unlikely to get out of this stronger, and there is no guarantee that the EC would drop its charges once it is implemented.
How did we get here?
According to the CSE letter, there are three main reasons which led to the current situation. First, a series of failures from the state concerning lack of investment, failure to prioritise rail freight and lack of financial support for the sector. Moreover, the letter claims that the de-industrialisation process as well as an “accentuated development of foreign flag road haulage” also played a role. Finally, the letter accuses the EC of deliberately destabilise the French rail market “under the guise of free and undistorted competition, which is inappropriate and devastating”.
The economic impact, the letter said, can be seen in a very sharp decline in Fret SNCF’s volumes throughout 2023, caused by the ban implemented by the government. In addition, the document stresses that these initiatives are having an impact on the workforce as well, which is constantly subject to uncertainty. “From operatives to senior managers, no one has been spared, and no one accepts this decision to discontinue work”, the letter continued. So far, the main beneficiary of Fret SNCF’s discontinuity seems to DB Cargo France, part of the Deutsche Bahn Group.
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