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Competitors force SNCF to act

18 Oct 2007

OLIVIER Marembaud, SNCF's Deputy Director-General, Freight, was stung into calling a press conference on September 5 after La Vie du Rail revealed that wagonload service was to be withdrawn from 262 terminals in western France from November 30, and that another working document suggested wagonload would cease at a further 142 to 191 depots in 2008.

SNCF denied the existence 'of a plan for massive closure of freight depots in 2008' and labelled the document out of date. But it also took the opportunity to garner support for what it now sees as a do or die strategy for wagonload.

The first inkling of cuts came in June, when SNCF said wagonload would be restructured in two stages in December 2007 and December 2008, with traffic flows reorganised around 30 yards linked several times a day by trains running to and from three major hubs. It failed to specify how many of the 1?583 locations now accepting wagonload traffic would continue to do so, but in a letter to the unions dated August 21, SNCF admitted that 70 depots had handled no traffic at all in the first four months of the year.

There has been no talk of abandoning wagonload altogether, but the service is blamed for about three-quarters of Fret SNCF's €260m loss in 2006. The problem, as we have repeatedly noted, is atrocious productivity – Fret SNCF admits to an average wagon turnround of 15 days, and that its locos run for just 8 h a day compared with 18 h achieved by EWS subsidiary Euro Cargo Rail.

Open-access competitors have already seized 3% of the market, and 10% is forecast by January. Combined with recognition that European law forbids further subsidies, this means that SNCF must accept defeat or extricate itself from the mess. The pressure to succeed is high, with President Sarkozy taking an interest and setting SNCF a target of increasing freight market share by 25%.

SNCF claims that tonne-km rose by 3·5% in the first half of 2007, but a real turnround hinges on productivity. SNCF has undertaken to negotiate with staff on a wide-ranging brief that includes job descriptions, the response to which has been predictable – but the unions have a lot on their plate at the moment. Sarkozy is keen to reform the generous pensions regime enjoyed by public-sector employees, and SNCF can, for the moment, count on political support.

SNCF sent a 'white paper' to the unions on September 24, offering an analysis of the freight market and SNCF's role within it. The unions had around two weeks to prepare a response before round table sessions planned for late October. Regrettably, we do not share the confidence of Secretary of State for Transport Dominique Bussereau, who told Les Echos on September 14 that he could see 'no reason why freight should not recover'.