SWITZERLAND: Swiss Federal Railways plans to team up with a partner to ensure its survival in the competitive European freight market.


Last month Swiss Federal Railways invited expressions of interest from companies wishing to form a partnership with its loss-making freight business, SBB Cargo. The deadline for submitting offers of interest was September 22.

SBB described the move as an attempt to improve rail’s competitive position against road in the international market, to provide better service on domestic routes and to 'strengthen profitability and financial efficiency’. Of particular interest is the requirement for the partner, or partners, to help improve SBB’s domestic wagonload service — SBB is anxious to secure its future in a business that is all too often unprofitable on a small network. Initial offers will be evaluated against specified criteria before SBB chooses bidders for detailed negotiations. It is aiming to have a deal finalised during the first half of 2009.

The Swiss national operator, which is being advised by McKinsey, is prepared to discuss options 'with all interested parties’, whether they are based in Switzerland or elsewhere. It is looking for 'significant contributions’ to the objective of switching traffic from road to rail and improving the competitiveness of the intermodal business.

In 2007 SBB Cargo’s performance was disastrous, and in March this year SBB announced a package of cost-saving measures (RG 4.08 p220), including job cuts and reorganisation of wagon maintenance. This led to a strike at the Bellinzona workshops, the direct cost of which SBB puts at more than SFr2·5m.

The package nonetheless helped to stem the tide of red ink, and during the first half of 2008 losses were reduced from SFr35·5m in the same period last year to SFr8·2m. Net tonne-km, on the other hand, fell from 6 827 million to 6 600 million. During the six months SBB Cargo was able to rely less on third parties for contracted services, with net tonne-km provided by contracted operators falling from 387 million in the same period last year to ?144 million.

In March the Swiss road haulage association called for 30% to 40% of the business to be sold to the private sector. Whether or not the private sector will show interest in a partnering deal will become clear over the next few months. A major attraction will be SBB Cargo’s international business, which includes traffic from Rotterdam to Switzerland and Italy. Potential partners include Deutsche Bahn and SNCF, both of which are intent on expansion.