understand the reasons for the railway workers’ anger

The inter-union (CGT Cheminots, Unsa-Ferroviaire, SUD-Rail and CFDT Cheminots) called for a major mobilization, Thursday, November 21, in opposition to the dismemberment of Fret SNCF planned for November 1^is January 2025 and the division of the subsidiary into two separate companies.

The four main unions jointly denounce a “disastrous plan” a you « dumping social »and are considering a renewable movement from December 11 if no response is provided to their demands.

But the movement promises to be little followed at the SNCF, with some disruptions planned for Thursday on regional lines, and little disruption of traffic on the TGV lines. The railway workers, however, hope to be heard and are calling for a moratorium to be put in place on this dismantling. A claim swept aside by the government.

What is SNCF Freight?

Formerly known as SNCF Marchandises, Fret SNCF is the main rail freight transport company in France. Long in a state monopoly, Fret SNCF remains the leading rail freight company in France, with a 50% market share in 2022. Since the sector was opened to competition between 2005 and 2006, around twenty The railway companies now share the market.

With 677 locomotives and 714 million euros in turnover in 2023, the subsidiary has nearly 5,000 employees. It is also one of the seven companies in the European alliance for the transport of goods in isolated wagons, Xrail, which intends to compete with road transport.

Why is the company split in two?

The dismantling of Fret SNCF follows the “discontinuity plane” negotiated in 2023 by the French government with the European Commission. Brussels had opened an investigation accusing the French state of having financially supported the SNCF subsidiary between 2007 and 2020 without respecting the rules of good competition. To avoid a reimbursement of 5.3 billion euros in public aid which would have led to the liquidation of Fret SNCF, Clément Beaune, then Minister for Transport, chose the split. A decision taken when the company's activity was in balance since 2021, after years of deficit.

It was decided that Fret SNCF would disappear on 1^is January 2025 and leaves room for two new distinct companies:

• Hexafretresponsible for transporting goods
• technis, responsible for locomotive maintenance.

These two entities will be integrated into Rail Logistics Europe, the SNCF group division bringing together all of the company's rail freight and logistics activities.

The split from Fret SNCF provides for the elimination of 10% of the workforce. In total, nearly 4,500 railway workers must be distributed between the two new companies (4,000 employees at Hexafret, 500 at Technis). As for the remaining 500 employees, they will not be made redundant but offered to other entities in the group, assures SNCF. “It’s very hard for the railway workers,” admitted the president of Rail Logistics Europe, Frédéric Delorme.

The process also provides for the abandonment to competition of 23 rail freight connections. The plan seen as a “liquidation” angered employees in the sector, who were firmly opposed to this project: “While the climate emergency requires the development of rail as a solution beneficial to all, the government is choosing the worst,” criticized the inter-union. And to denounce “the social conditions of railway workers [qui] deteriorate while competition, the fuel of social dumping, increases.”

Why did Fret SNCF encounter difficulties?

The freight sector, of which Fret SNCF represents the historic and dominant player, has been experiencing structural difficulties for several years. Among these: competition from passenger trains, which monopolize the rails during the day, and maintenance work at night, which limits activity; the burden of maintaining the aging rail network in France, which is straining the company's budgets and profitability. “We invested in the TGV, it was the big priority, while classic lines like Clermont-Limoges-Toulouse were left aside, and when they deteriorate for travelers, they also deteriorate for freight”underlines Patricia Perennes, economist specializing in rail transport and consultant within the consulting company Trans-Missions.

Illustration of this impossible equation, in recent years, the SNCF has closed or very significantly reduced capacity on financially unsustainable freight links. Thus Volvic-Mont-Dore in Puy-de-Dôme, a dilapidated 55-kilometer line exclusively operated by a Volvic supplier. Its maintenance cost SNCF 1.2 million euros per year, for only 23,000 euros in revenue.

Furthermore, as noted in 2021 by the Minister responsible for Transport, Jean-Baptiste Djebbari, during the presentation of a plan to support rail freight, the loss of the monopoly for the historic operator complicated things:

“The opening of the sector to competition (…) resulted in France in a destabilization of the historic operator Fret SNCF, accompanied by non-cooperative behavior between actors (…). The liberalization of the sector thus proved to be faster and stronger than the European average, but this was largely to the detriment of the overall development of the modal share of rail freight. »

Finally, rail faces head-on competition from road freight. This is easier to use, with its fine network of highways and roads, and the possibility of delivering to the precise address. It is more suitable for perishable items as well as small packages, which are becoming more and more numerous with the explosion of home delivery by Amazon and others. The train is more suited to heavy materials – steel beams, grain, wood, coal, etc. “When a country deindustrializes, naturally, there are fewer activities for rail”notes M^me Perennes – a French specificity, compared to Germany.

Road freight is also considered more reliable, as it is less subject to delays and equipment damage. It also has state aid, such as diesel subsidies and aid for the conversion of truck fleets to electricity, which makes it more competitive, denounces the French Rail Association.

Towards a revival of rail freight?

To achieve the objectives set for decarbonization of transport enshrined in the Climate and Resilience Law of 2021, the government intends to double the share of goods transported by rail by 2030.

Sector experts note a cultural change in certain companies keen to reduce their carbon footprint, which could therefore more readily turn to freight and thus revive it. Which implies “that they can turn to efficient operators, with renovated infrastructures”notes economist M^me Perennes, emphasizing that freight is doing very well in the United States.

However, the current restructuring risks firstly resulting in “a destabilization of the sector, which has worried the sector since its announcement”notes former communist MP Hubert Wulfranc, rapporteur of the commission of inquiry into the liberalization of rail freight in 2023. Starting with the uncertainty around the transition period linked to the abandonment of the 24 main rail links to German and Belgian competition in particular.