European Rail Freight Overhaul: Fret SNCF to Sell Assets and Dissolve by the End of 2024

Fret SNCF, the freight division of the French National Railways, has announced the sale of many of its railway assets to freight railway companies as a part of a larger plan to improve the efficiency and competitiveness of the French sector by reallocating important rail properties.

The asset sale follows an investigation by the European Commission (EC) into financial support that violated EU rules. The EC found that Fret SNCF had incurred losses of EUR 5.3 billion between 2007 and 2019. To comply with EU regulations and address these financial challenges, Fret SNCF will be dissolved by the end of 2024. Two new companies will take over goods transportation and maintenance, bringing fresh ideas to the rail freight industry.

All Fret SNCF land has been thoroughly evaluated by SEGAT, an independent expert, to ensure each asset's value is measured based on objective criteria as the assets on offer vary widely in size, price, and location but all have significant railway value. They are located in various strategic locations., each of them having been chosen for their potential to enhance rail operations, ease of access, and connectivity to important industrial and consumer hubs.

The reorganization and asset sale signal a broader shift in the rail freight market in France. Fret SNCF’s market share has gradually decreased to around 50% since rail freight competition began in 2005. Competitors like DB Cargo France, Lineas, and Europorte have raised concerns about Fret SNCF’s losses and market practices. Therefore, redistributing about 30% of Fret SNCF’s workload and 20% of its revenue to other market players presents a unique opportunity for these competitors to expand their operations.

Examples of Proposed Assets

• Bassens: Includes offices, warehouses, and logistical areas currently in service and highly rated for rail interest.

 

• Modane: Features land and buildings with strong rail interest, well-connected by existing rail infrastructure.

• Perpignan Saint Charles: Offers extensive warehouse and office space, classified under high rail interest and suited for freight logistics.

The French government has committed to supporting the rail sector through subsidies and investments. Annual subsidies of EUR 175 million are set to reduce track access charges, supplemented by an additional EUR 155 million starting in 2025. A EUR 4 billion investment in rail infrastructure is planned from 2023 to 2030, intended to enhance rail freight capabilities and promote eco-friendly transportation solutions.

Overall, as part of the restructuring, Fret SNCF will undergo significant changes, including a reduction of around 500 employees, approximately 10% of its workforce. The company will also transfer locomotives and other assets, including the intermodal terminal near Lyon, to new entities.

 

Source: Rail Logistics Europe, OptiVlak