A force, the detestation of the European Commission for state monopolies no longer needs to be proven. Neither does France’s taste for public and centralized things. The opening of markets to competition could only be accomplished with pain. And it was. That the historical players are ordered to transform too quickly like France Telecom, which has become Orange. Or that they are condemned to disappear, like Fret SNCF.
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After years of standoff between Paris and Brussels, the rail freight transport operator confirmed, Monday November 4, that it would self-destruct on November 1is January 2025, to make way for two companies, Technis in maintenance and Hexafret in freight. Already, in 2024, Fret SNCF has transferred 30% of its traffic to the competition, and not the least profitable part, which forces it to reduce its workforce by 10% (5,000 employees).
This is the sanction demanded by Brussels for having unduly received 5.3 billion euros in state aid between 2007 and 2019. A heartbreak for the company – and its employees -, which had managed to recover the accounts from 2021, at the cost of heavy restructuring, before a very bad year 2023 marked by social movements. The question now is to know what consequences this slimming treatment imposed on the main player in the French market will have on the development of rail freight.
Erosion on the part of the railway
Because everyone agrees that the priority today is to favor rail, which emits much less CO2 than the road. However, in France, the share of rail in domestic freight transport is eroding. It went from 12% in 2015 to 10.4% in 2022. Why? This is where opinions differ. It would have been worse if the market had not opened to competition from 2005, say Brussels and its supporters, delighted to point out that Fret SNCF once had the unfortunate habit of losing its wagons. No, it is the lack of investment and the poorly controlled liberalization of truck transport in Europe which has weakened rail freight, the railway workers retort.
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Moving forward, two observations appear rather reassuring. The first is that, with the exception of the famous primeurs train between Perpignan and Rungis, the flow of goods trains sold by Fret SNCF were taken over by rail operators: this transfer therefore did not result in traffic thousands of additional trucks on the roads. The second is that the European Commission has evolved its doctrine regarding state aid, authorizing Germany and France in particular to finance the investments necessary to better combine road and rail transport. It goes to show that competition can't do everything.
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