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SNCF loses freight market share

AFP: 23 July 2009

PARIS - SNCF is losing yet more ground in the freight sector to private operators who have seen their market share rise sharply in recent months, even though the economic situation remains difficult.

The market share of new entrants in the sector rose from 8.3% in December 2008 to 12% in May 2009, according to data provided by Réseau Ferré de France (RFF) [French Network Rail], confirming information in business paper, Les Echos.

"The introduction of competition in rail freight has undoubtedly been a success," said Hervé de Tréglodé, Deputy Director General of RFF. "The new railway companies are seeing their market share increase steadily."

"The challenge of the opening up of the market was far from won at the beginning. Three years ago, we read in the press: 'It can’t happen, France is a very closed and economically very difficult", he said.

The CGT-railworkers’ federation, the largest union at SNCF, for its part, "deplores freight liberalisation”.

The union said it had observed "a spate of incidents and accidents, which have occurred in recent months, involving private rail operators for whom cost reduction and lowering working conditions are the rule."

In a statement, CGT reported two accidents that took place last weekend. The first concerned a EuroCargoRail freight train which "derailed, tearing up 350 meters of track in Forbach (Moselle), disrupting freight, TGV [high speed] and TER [regional] traffic.

The other accident involved a Colas Rail freight train, a subsidiary of Bouygues, at Saint-Hilaire-au-Temple (Marne), which has also derailed tearing up the track and the catenary systems,"according to the union.

However, RFF claims not to have found "accident rates higher for new railway undertakings in comparison with incumbents."

The freight sector is deeply affected by the economic crisis. The RFF benchmark index of train-km, i.e. the number of trains multiplied by distance travelled by these trains, fell from 9 million in June 2008 to 6.6 million in May 2009.

SNCF turnover in the first half of 2009 declined by 4% to 11.94 billion euros, sealed by the collapse of its business freight and logistics.

It plans to restructure its own freight industry, for example by reducing "wagon-load freight" (a small quantities business activity) and engaging in high speed freight transport. A meeting of the Economic Committee of the Central Works Committee (CCE) on the topic is scheduled for July 28.

The international freight lines in Europe have been open to competition since 2003, domestic routes in France since 2006.

Seven companies in addition to SNCF today operate trains in France (Veolia, EuroCargoRail, Colas Rail, B-Cargo, Europorte 2, CFL-Cargo, VFLI).