‘2024 was a stagnating year for French rail freight’
The Frejus Railway will finally reopen at the end of March, hopefully bringing some relief to much of the rail freight industry in France and Italy after one and a half year. RailFreight.com had a chat with Alexandre Gallo, head of DB Cargo France and president of industry association AFRA, on this matter and much more. What is your assessment of the French rail freight market in 2024?
Gallo: Last year, the market did not regain the momentum of 2021 and 2022. There are several reasons for this. First of all, we continued to recover from the catastrophic year that was 2023, with the strikes at SNCF in the Spring, rising energy prices, the economic crisis and the closure of the rail line between France and Italy via the Alps (following a major rock fall).
As for 2024, I would qualify it as a year of stagnation. The line through the Maurienne Valley to Italy remained closed while the automotive, chemical and steel industries, which are major suppliers of rail freight volumes, entered a difficult phase. Is the sector in a better position today than it was 12 months ago?
Gallo: Let's just say that after the two years we've just been through, there's a good deal of hope for 2025. The vitality of combined (road-rail) transport is asserting itself, and the market is buzzing with projects. What are your expectations for 2025?
Gallo: The challenges remain the same and center on retaining and attracting shippers to train-borne freight. There needs to be stability in labor relations, optimal schedules for maintenance work on the rail network and the continuation of the government's incentive policy in favor of rail freight. One concern that the Polish presidency of the European Union (during the first six months of 2025) could reactivate the 'weights and dimensions' directive with regard to mega-trucks.
We'll be keeping a close watch on this issue through our trade associations. How did DB Cargo France perform in 2024 in terms of tonne-kilometres transported, turnover and EBIT compared with 2023, and what are your operational and financial targets for 2025? Gallo: I can't go into the results in detail but I can say is that last year we exceeded 200 million euros in sales and ended the year with a positive net result.
For the first time, we will activate our profit-sharing scheme for our employees. In terms of tonne-kilometres transported (t/km/t) we recorded a very strong year-on-year increase. Traffic totaled 5.9 billion t/km/t in 2024 compared to 3.7 billion t/km/t in 2023.
In 2025, we are targeting is 6.6 billion t/km/t. Has DB Cargo France affected by the Group-wide cuts at Deutsche Bahn? Gallo: Yes, in terms of volumes linked to wagonloads from Germany.
We have decided to close our three hubs at Vaires-sur-Marne, Gevrey and Saint-Pierre des Corps and entrust these flows to Hexafret (SNCF's new rail freight subsidiary). This has resulted in the loss of 30 jobs. A word on the traffic flows handed over to you by Fret SNCF as part of its discontinuity plan?
Gallo: DB Cargo France has taken on a number of international routes as well as the rolling highway service between Le Boulou and Calais. Have you been informed of a date for the definitive reopening of the rail line through the Maurienne Valley? Gallo: We've just been officially notified that the line will reopen on Monday March 31, which is excellent news.
What impact has the closure of this line had on your business? Gallo: We have taken a significant hit with some 40 forty trains taken out of our schedule each week, representing nearly 15 million euros in lost revenue (over the period of its closure since end-August 2023). With the re-opening of the line at the end of March, the challenge is going to be to convince shippers who have switched to road haulage during its closure to return to rail freight again.
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References
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