Tuesday, February 27, 2018

European Rail Freight Interests Demand Better Deal Against Road Haulage After French Report

State Run SNCF Needs Reform According to Industry Stakeholders
Shipping News Feature
FRANCE – Following the appointment of Air France KLM holding company chairman Jean-Cyril Spinetta in October 2016 by the country's prime minister to produce a report on the industry, the rail freight sector has waited to see what the 75 year old Parisian would produce, particularly given the level of debt the state rail group SNCF has incurred and the demands of the EU's Fourth Railway Package.

The report, L’avenir du Transport ferroviaire (The future of rail transport) passed into government hands earlier this month, and is none too flattering about the state of the country’s rail services, advocating a total review, a la Beeching, of France’s rail network. It points out the structure of SNCF Mobilités and SNCF Réseau are not compatible with the EU rules on state aid for rail, a point made often and loudly by overseas critics.

So what of freight specifically? When France abandoned the idea of an ‘ecotax’ on HGVs nothing took its place and Spinetta, a staunch socialist from birth, advocates a new set of taxation options to push rail as a favourable option over road haulage. The European Rail Freight Association (ERFA) unsurprisingly welcomes Spinetta’s conclusion which it says is that the French rail system needs more competition. The ERFA says it salutes the Prime Minister’s lucidity quoting selected statements based on the Spinetta Report:

“The situation is alarming or even untenable. SNCF has to present ‘before summer’ and after consultation, ‘a strategic corporate project’ guaranteeing ‘a better quality of service for all the transport users’ and a ‘more efficient management’, while containing a new social contract with the railway staff members who must benefit, according to him, from the same working conditions as all the French, i.e. those of the Labour Code.”

The ERFA is further delighted that the Prime Minister has distanced himself from the report which sought to facilitate the closure of small, uncrowded lines. On the contrary, he recommends that the SNCF align its costs with European standards, when ‘to drive by train in France costs 30% more than elsewhere’. It points out that freight charges should be kept below the marginal cost, adjusted to the undercharging of the other transport modes, as allowed today by European legislation in light of no penalties for road hauliers with the absence of a ‘distance driven’ toll.

The ERFA targets five specific points in view of what it hopes will be a full reform:

  • The writing-off of SNCF Réseau’s debt by the State, which will allow the reduction of access charges and the rate of return needed to justify new investments
  • The abolition of the status of SNCF agents for all the new staff, taking care to prevent social dialogue from involving new constraints that are detrimental to competitiveness in the new collective agreement
  • A higher priority given to freight in the allocation of train paths, and a greater transparency in this respect, including in situations of saturation, near saturation and incident
  • Confirmation of attachment to the secondary network and alignment of SNCF Réseau's costs with European standards, as recommended by the Prime Minister Edouard Philippe
  • In general, a greater consideration of European experience and perspective and successes of new entrants. All freight operators that are profitable today - which are not mentioned in the report - such as Europorte, SBBCI, BLSC, Lineas, CFL, Railtraxx, LTE, Hector Rail, GBRF have restructured to achieve profitability and have set up a management dynamic oriented primarily towards customer satisfaction. This is proof that, if adequate measures are taken, there is a future for rail freight in France and everywhere in Europe