The dismemberment of Fret SNCF at the origin of the mobilization of railway workers.

The inter-union unions (CGT Cheminots, Unsa-Ferroviaire, SUD-Rail and CFDT Cheminots) called for a large mobilization, on Thursday, November 21, against the dismemberment of Fret SNCF scheduled for November 1.^Ahem January 2025 and division of the subsidiary into two independent companies.

The four main unions jointly denounce a “disastrous plan” and of “social dumping”and they are considering a renewable movement starting December 11 if their demands are not answered.

But the move promises to be little followed on the SNCF, with some disruptions planned for Thursday on regional lines and few traffic disruptions on TGV lines. The railway workers, however, hope to be heard and ask for a moratorium on this dismantling. A claim dismissed by the government.

What is SNCF Freight?

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

With 677 locomotives and a turnover of 714 million euros in 2023, the subsidiary has almost 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 aims to compete with road transport.

Why is the company divided into 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 that would have led to the liquidation of Fret SNCF, Clément Beaune, then Minister of Transport, opted for the split. A decision made when the company’s activity was in balance since 2021, after years of deficit.

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

• hexafreteresponsible for the transportation of goods.
• Technique, Responsible for locomotive maintenance.

These two entities will be integrated into Rail Logistics Europe, the division of the SNCF group that brings together all the company’s railway transport and logistics activities.

The spin-off of Fret SNCF provides for the elimination of 10% of the workforce. In total, around 4,500 railway workers will have to be divided between the two new companies (4,000 employees at Hexafret, 500 at Technis). As for the remaining 500 employees, they will not be laid off but offered to other entities in the group, SNCF assures. “It is very hard for railway workers” admitted the president of Rail Logistics Europe, Frédéric Delorme.

The process also foresees the putting out to tender of 23 freight railway connections. The plan seen as a “liquidation” infuriated sector employees, who strongly opposed this project: “While the climate emergency requires rail development as a win-win solution, the government is choosing the worst” He criticized the inter-union. and report “the social conditions of railway workers [qui] “They deteriorate while competition increases, the fuel of social dumping.”

Why did Fret SNCF have difficulties?

The freight transport sector, of which Fret SNCF represents the historical and dominant player, has been experiencing structural difficulties for several years. Among them: competition from passenger trains, which monopolize the tracks during the day, and maintenance work at night, which limits activity; the burden of maintaining France’s aging rail network, which is putting pressure on company budgets and profitability. “We invested in the TGV, it was the great priority, while the classic lines such as Clermont-Limoges-Toulouse were left aside, and when they deteriorate for travelers, they also deteriorate for the transport of goods”underlines Patricia Perennes, an economist specialized in rail transport and consultant at the consulting firm Trans-Missions.

As proof of this impossible equation, in recent years the SNCF has closed or very significantly reduced capacities on financially unsustainable freight transport links. Thus, Volvic-Mont-Dore, in Puy-de-Dôme, a 55-kilometre dilapidated line operated exclusively by a Volvic supplier. Its maintenance costs SNCF 1.2 million euros per year, with only 23,000 euros in turnover.

Furthermore, as the Minister responsible for Transport, Jean-Baptiste Djebbari, pointed out in 2021 during the presentation of a support plan for rail freight transport, the loss of the monopoly of the historical operator complicated things:

“The opening of the sector to competition (…) caused in France a destabilization of the historical operator Fret SNCF, accompanied by non-cooperative behavior between the actors (…). The liberalization of the sector was thus faster and stronger than the European average, but to a large extent to the detriment of the general development of the modal share of rail freight transport. »

Finally, the railway faces direct competition from road transport. This is easier to use, with its excellent network of motorways and roads, and the ability to deliver to the precise address. It is best suited for perishable items and small packages, which are becoming more numerous with the explosion of home delivery by Amazon and others. The train is more suitable for heavy materials: steel beams, grain, wood, coal, etc. “When a country deindustrializes, naturally, there are fewer activities for the railway”points out M^me Perennials: a French specificity compared to Germany.

Road transport is also considered more reliable, as it is less subject to delays and damage to equipment. 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 Railway Association.

Towards a reactivation of rail freight transport?

To achieve the targets set for transport decarbonisation enshrined in the Climate and Resilience Act 2021, the government aims to double the proportion of freight transported by rail by 2030.

Industry experts observe a cultural change in some companies eager to reduce their carbon footprint, which could therefore more easily resort to freight transport and reactivate it. What it implies “that they can turn to efficient operators, with renewed infrastructure”points out the economist M^me Perennials, highlighting that freight transportation is going very well in the United States.

However, the current restructuring risks that will result in “a destabilization of the sector, which has worried the sector since its announcement”says former communist deputy Hubert Wulfranc, rapporteur of the commission of inquiry on the liberalization of rail freight transport in 2023. Starting with the uncertainty around the transition period linked to the abandonment of the 24 main railway links in the face of German competition and Belgian in particular.