‘Block train and single wagonload businesses in Switzerland need to be separate’

Rail freight in Switzerland is currently undergoing a total revision of the Freight Transport Act, which was recently adopted by the country’s Council of States. The reform should bring a stronger separation between block train services and single wagonload (SWL) traffic, according to Switzerland’s former Director of the Swiss Federal Office of Transport (FOT) Peter Füglistaler.

Carrying out SWL services has traditionally been a non-financially viable solution and needs to rely on state subsidies, not only in Switzerland but also in the rest of Europe. On the other hand, arranging block trains can be quite profitable and easier to organise as they involve fewer parties and can be more predictable. According to Füglistaler rail freight players should treat block trains and SWL as State and Church.

“The mixing of commercial and subsidised services in a company is a permanent minefield”, he claimed. For this reason, he suggested the creation of two independent entities within the rail freight branch of the Swiss Federal Railways (SBB). “The fact that SBB Cargo operates the subsidised single wagonload and runs national block trains in competition is the Achilles heel of the reform. Competitors will always suspect cross-subsidies, and those responsible at SBB Cargo are exposed to the temptation to play with the cost allocations between the two areas”, Füglistaler added.

SWL should stay with SBB, block trains not necessarily

One would focus solely on single wagonload, while the other one would take care of block trains. As the former FOT Director pointed out, having an SBB subsidiary exclusively taking care of single wagonload through subsidies is a necessity. “There is no successful and financially stable business model for national system transport, the so-called single wagonload transport”, he commented. For the more profitable daughter company focussing on block train services, Füglistaler said that the question of whether it would remain under the state-owned SBB remains open.