In an interview with Railfreight.com, Alexandre Gallo, President and CEO of DB Cargo France and President of the Association Française du Rail (AFRA), comments on market trends and the outlook for the remainder of the year and beyond while responding to shippers’ current perception of the industry.
How did rail freight markets play out in France and Europe in the first quarter of the year?
We are in a slow recovery phase. The European economy is struggling to recover and this is having an impact on overall volumes. In France, while shippers’ enthusiasm for rail transport is as strong as ever, the events of 2023 – in particular the strikes in the spring and the rockfall in the Maurienne Valley are weighing on the recovery. I would say that we are more in a phase of traffic consolidation, with volumes gradually returning. It’s also true that private players are starting to integrate the services discontinued by Fret SNCF which has limited the launch of new freight train routes.
Which market segments have performed best and which have suffered the most?
Combined transport is doing well with service frequencies returning to their 2022 levels. As for conventional transport, it was hit by some bad weather in northern France at the start of the year. In terms of products, building materials remain sluggish, reflecting the current state of the construction sector.
How did DB Cargo France perform during the first quarter?
The performance was in line with the market. We have seen significant falls in international volumes on flows from Northern Europe (mainly Germany) to Spain, linked to the depressed automotive market, but also to the general downturn in fast-moving consumer goods. On the other hand, in our case, this decline was offset by the traffic flows we picked up from the service discontinuity at Fret SNCF.
Can you provide an update on the number of traffic routes DB Cargo France has taken over from Fret SNCF?
Of the 120 weekly return trips relinquished by Fret SNCF and put back on to the market, to date we have a total of 66 in our own production schedule and 54 weekly return trips are already operated by our competitors. A further 56 weekly round trips have been allocated to our competitors and are currently still operated by Fret SNCF on a subcontracting basis.
40 weekly return trips are or will be the subject of a call to tender by the French authorities; the Alpine Rail Motorway shuttle (between Aiton, in France, and Orbassano, in Italy) and a service carrying fresh fruit and vegetables from southern France (Perpignan) to the Paris-Rungis wholesale market.
Eight return trips will not be renewed for economic reasons. The remaining 16 return trips are under discussion and still to be allocated as these services run on the France-Italy route, currently closed as a result of the rockfall in the Maurienne Valley, in the Alps. Our focus now is on pitching for these transalpine flows.
What is clear is that these reallocated traffic routes have been distributed fairly widely between the various rail companies. And let’s not forget that the awarding of these contracts was customer/shipper-driven. DB Cargo France has above all taken over traffic that is in its preferred area of activity – long-distance, cross-border routes for P400 wide-gauge combined transport.
How do you respond to the findings in the latest annual survey of French shippers’ on their perceptions of rail freight which revealed that despite an improvement in the general level of satisfaction, the service offering remains “very inadequate”?
I can only agree with the shippers’ assessment. The rail companies are making a lot of effort to make their offer clearer, but also to make their operations more reliable. We are all also working to improve customer information. However, the weakest link in rail transport remains the network. Chronic under-investment, emergency (maintenance and repair) works, repeated strikes, speed restrictions and lack of capacity are all factors that have an impact on the robustness of our transport plans.
According to the French shippers’ survey, combined road/rail transport had a satisfaction rating with regard to the level of service of only 32 per cent. Moreover, unlike last year’s survey, in which combined rail/road transport topped the list of modes expected to see strong growth, in this year’s edition, it fell to fifth place behind river, short sea, river/road, and road transport. How do you explain that?
Combined transport is the most demanding segment of the rail market in terms of quality, essentially punctuality. It is the one that is most sensitive to the disruptions we experienced in 2023. So I’m not surprised to see a certain amount of mistrust on the part of shippers. And yet, combined transport is best suited to modal shift, because it allows road traffic to be transferred directly to rail. I’m confident that by developing new services we’ll be able to win back the confidence of shippers.
How do you see rail freight markets playing out in France/Europe in the second quarter of the year and in the second half of 2024?
I expect the market to remain stable for much of 2024 but the growing interest shown by shippers in decarbonising their transport gives us a positive outlook for 2025.
Also read:
- SBB Cargo France has no plans to take over Fret SNCF routes
- France’s rail freight sector voices strong opposition to ‘mega’ trucks
- Fret SNCF urges government to postpone company discontinuation
