PSA Peugeot-Citroën’s logistics division Gefco will not renew its contract with the freight division of fellow French rail provider SNCF for outbound automotive shipments.
The business that Fret SNCF handles for Gefco, which includes managing a volume of 40,000 wagons per year, will be redistributed amongst three separate private rail freight providers by the end of the year: Euro Cargo Rail (a subsidiary of DB Schenker UK); Europorte (the rail freight business of the Eurotunnel group) and rail infrastructure provider Colas Rail.
The loss of that business is significant as Fret SNCF has been gradually losing business to trucking firms and foreign rail operators and is facing competition from new entrants into the liberalised rail market in France who are offering a more responsive and reliable service.
According to a report in International Freighting Weekly Gefco’s decision not to renew the contract was a result of Fret SNCF’s failure to meet expectations with its new multi-load, multi-customer service. This suggests that the division has continued to lose focus on providing customers with a more reliable and cost-effective service thanks to a failure to address internal reform and restructuring, something that was evident back in 2009, when it incurred €343m loss of revenue and was forced to go through its sixth rescue plan (read more here).
Last year it was the only SNCF division to make a loss, registering revenue down by €180m. This latest decision by Gefco appears to suggest that that reform has not gone far enough.
“For the French to stop using the French state rail provider is pretty unusual,” said Transport Intelligence analyst Thomas Cullen. “It is losing market share very rapidly and in the present fiscal climate can even the French continue to support it? If SNCF Fret continues to lose ‘base-load’ customers it will be quite serious,” he told Automotive Logistics.
That said, Fret SNCF’s subsidiary Captrain will continue to move semi-knockdown (SKD) kits for Gefco between PSA’s plant in Vesoul, eastern France and the new €470m ($630m) production facility the French carmaker has set up with Mitsubishi in Kaluga, Russia.
The service between the Naviland Cargo terminal near the Vesoul plant and Malaszewisze/Brest on the Poland/Belarus border was established and launched in April last year in partnership with Fret SNCF subsidiary Captrain Deutschland and Transcontainer, the intermodal division of Russian Railways.
