SBB to restructure, 800 employees lose job

SBB Cargo, the rail freight subsidiary of Swiss Federal Railways will restructure its business operations over the next five years, as it suffered a loss of 31.8 million Euros in 2017. A stark decline in the demand for single-car freight traffic was cited as the main reason of the financial downturn.

The demand for wagonload services has plummeted. While some economic areas witnessed minor losses, other areas witnessed sluggish traffic performances with an average of only two cars per day. “Today, ninety percent of the cars are transported over about half of the 344 control points,” SBB Cargo pointed out. The challenge is, as with many European railway companies, to sustain the transport of small-scale and irregular volumes in individual truckload traffic. This sort of traffic fell sharply by 14.5 per centat low traffic points, while truckload traffic between Swiss economic areas fell slightly by 0.8 per cent, SBB Cargo explained.

Focus areas

SBB wants to further strengthen the economic areas with large volumes of goods by offering customers a regular, reliable and high-performance service, because “that is where the strengths of the railway lie. With faster and more frequent connections, reserved routes -and not least thanks to automation- the railway is being successfully and sustainably positioned, even with increasing demands in the logistics chain of its customers.”

To respond to the decline at other traffic points, SBB Cargo is currently considering alternatives to a fixed daily service. “These include, for example, the bundling of transport via other locations, the concentration of quantities, regional ring trips, where appropriate the combination with the road, transitional solutions or alternative financing, for example by cantons. There will be no surprises for the customers, because adjustments in the logistics chain sometimes have considerable lead times.”

Job losses

Another effect of the restructuring is the cut of a third of the current workforce. With a loss of 800 employees over the next five years, SBB Cargo wants to minimise its staff from 2,200 to 1,400, with the first 330 to go before the end of 2020.

“The departure of 750 employees is due to natural fluctuation, in particular several hundred retirements”, the cargo division explained. “Central to the phase of change is giving employees prospects: SBB Cargo is prepared to invest 8.6 million Euros in their training.”

Prospects

The freight division allocates 19 million Euros for the restructuring phase and wants to achieve a black zero in 2020. Moreover, the company has said to look out for potential partners, although it will will remain a subsidiary of SBB.

“The volume of wagonload traffic is expected to decline only slightly by 2025. The assumptions are challenging as railway is in competition with the technological advances of the road. Basically, the implementation of further development is measured time and again based on market development,” it concluded.