French Rail to Boost Market Share with Intermodal

SNCF, France’s state-owned railway, said it will sharply increase container traffic and offer high speed express services as part of a $1.5 billion plan to boost market share and move its freight business into profit.

SNCF’s freight unit is heading for an $885 million deficit this year following losses totaling $2.8 billion from 2003 to 2008. Rail’s share of France’s freight market, the second largest in Europe, plunged to 14 percent last year from 21 percent in 1996.

The company plans to invest around $1.5 billion on redesigning its freight business, investing in new truck shuttle trains, boosting international services, focusing on port traffic and rationalizing its heavily loss-making single wagon operation.

Some freight operations will be transferred to subsidiaries operating under private company law in a bid to lift productivity.

This will make logistics “one of the strong points of France,” according to SNCF’s chief executive Guillaume Pepy.

SNCF plans to double the number of containers it transports to and from France’s key box ports, Le Havre and Marseilles, a market that is currently dominated by trucks.

The company also will use its TGV high speed passenger rail network to increase its presence in the express package delivery service “to put 100,000 trucks and 1,000 planes” on the rail tracks.

Four rail/truck shuttles will be phased in and will be running fifty daily services by 2020, carrying 500,000 truckloads a year.

SNCF will also rationalize its single wagon business, which accounts for only six percent of its revenue but is responsible for around 65 percent of its losses. It will offer new services to regular shippers while discouraging customers who use rail as a backup for trucking.

The French government recently unveiled an $11.8 billion plan to boost rail’s market share to 25 percent by 2022, mainly at the expense of road transport.

Contact Bruce Barnard at brucebarnard47@hotmail.com.