Do or die: Is Switzerland killing single wagonload?

Swiss national rail operator SBB is making single wagonload (SWL) traffic uncompetitive due to rapid price increases, according to the Swiss shippers’ association VAP. They lament that the financial burden to save SWL is being pushed onto shippers, whereas SBB maintains that “everyone is playing their part”.
“SBB’s freight services are in crisis”, says the Swiss rail operator. “They have a structural deficit and obsolescent rolling stock and have seen a reduction in volumes of a third in the last ten years – despite an extensive network and low prices.” The freight department runs a 76 million franc (81 million euros) deficit, and it wants to close that gap.

In order to do that, changes need to be made, also in terms of pricing. When it comes to SWL services in Switzerland, rates are rising rapidly, says shippers’ assocation VAP. That is making the single wagonload business uncompetitive with the road, and will push shippers away from rail, the association argues.

The “horrendous price increases” are a thorn in the side of the association, because a new federal law stipulates that the burden should be carried more evenly between the shippers, SBB and the federal government, VAP says.

Moderate price increases

The law in question, the Goods Transport Act, aims to make single wagonload transport self-sustaining by improving operational efficiency at SBB, raising prices for shippers and with hundreds of millions in investments by the Swiss federal government for the coming eight years.

It was a fair arrangement, and the shippers were ready to take on “moderate price increases”, says VAP. However, the association adds that “the reduction of SBB Cargo’s deficit is happening almost exclusively at the expense of shippers” due to the price hikes of the past months. It is somewhat unclear what these increases amount to, Simon Wey from VAP tells RailFreight.com. They differ per company, with some citing increases of over 50%, others are closer to no increase at all, and others in between those extremes.

Destroying freight on purpose?

Wey says that SBB Cargo may be taking the opportunity to raise prices before they no longer can. It is important to note here that the Goods Transport Act, which would help suppress price growth, will only come into force in January. In other words, SBB might have identified a limited time window to charge more for its services.

VAP warns that shippers are left with little incentive to rely on rail freight transport. “Given the high initial investments, these companies are unlikely to ever return to rail in the future, thus permanently dismantling SWL and thus rail freight transport.” More and more VAP members are indicating that they are turning their backs on rail.

However, that might even be SBB’s goal, Wey theorises. “I do not think that politicians have caught on to this yet”, he adds. According to the VAP representative, SBB wants to get rid of the freight department, because it is constantly making a loss of around 80 million Swiss franc (85,5 million euros) on it. By making it uncompetitive, companies will leave the business, dismantle infrastructure, and it will never return, Wey explains. That would help SBB improve its financial situation, albeit at the cost of freight.

SBB’s point of view

SBB sees it differently. “Everyone is playing their part: the Confederation is providing temporary financial support for single wagonload, customers are benefiting from market-based prices and SBB is increasing efficiency and reducing costs”, the operator says in response to RailFreight.com questions, referring to earlier published statements by the company.

Its framework for the future of Swiss rail freight, dubbed “Suisse Cargo Logistics”, should help manage future growth in freight traffic and realign SWL transport. Among other things, that means that the SWL network is going to be adapted to demand, with new terminals opening and others closing down.

“As of the 2026/27 timetable change (13 December 2026) a new production model will enable SWL operations to be simpler, more efficient, more robust and more economical”, SBB explains. “Service points with too little demand will no longer be offered on the SBB Cargo Switzerland SWL network in future.”

Once the anticipated transport volumes for 2026 are in and the customer contracts are known, SBB will plan the new SWL network, the company says. “As things currently stand, the number of service points will be reduced as of the 2026/27 timetable change, assuming the same transport volumes. Despite this reduction, around 98 per cent of wagons can still be transported based on current volumes.”

All in all, rail should have grown its capacity by 60% in 2050 based on the Suisse Cargo Logistics plan. Switzerland is expecting rail freight to grow by a third by that time, SBB says.

Already abandoning rail

The views of Swiss shippers and the rail operator clearly diverge. VAP sees the destruction of SWL happening in real time, and SBB says that it is working on making single wagonload more efficient. Still, Swiss politics have taken note of the cost developments on the rail freight network. A new parliamentary motion wants to tie SBB Cargo’s maximum price increases to inflation.

“Accordingly, SBB Cargo would have to ensure its viability primarily through more productive and efficient operations, as envisioned by Parliament in the Goods Transport Act”, says VAP. “Unfortunately, SBB Cargo has since created a reality: a significant portion of SWL customers have already turned away from rail.”