MSC to take over 50 per cent of Renfe Mercancías
Shipping giant MSC has been selected to take over 50 per cent of the Spanish national rail freight operator Renfe Mercancías. The initiative is expected to help Renfe Merciancías’ operations and finances, given that the company had 38 million euros in debts in 2022.
MSC’s partial takeover will be carried out through its logistics arm, Medlog, and railway operator, Medway. The decision came after Renfe’s board of directors met on Monday 25 September and now needs to be authorised by the Spanish government. The rest of the details will be discussed and finalised once this happens. However, it is already known that Medway will be in charge of the Rolling Highway between Madrid and Valencia, which should be ready by next year.
According to various Spanish media, including El Mercantil, Renfe intends to keep 100 per cent of its workforce, which will either join the new project or be transferred to Renfe. The company’s quest for an industrial partner started in April 2022, with over 30 proposals being submitted. MSC’s proposal was selected over the ones brought forward by two other dominant logistics players: Maersk and CMA CGM. Despite official numbers are not available, Spanish media claims the operation will cost MSC around 200 million euros.
Are public-private partnerships the way to go?
Renfe Mercancías is not the only example of European public rail freight companies losing money. The French one, Fret SNCF, will be restructured to avoid sanctions from the European Commission (EC) after receiving unfair state aid to clear its continuous losses. The company is likely to be divided into two entities and has been forced to give up various routes in its network. The German national rail freight operator, DB Cargo, has also been under investigation by the EC since February 2022 for possible unfair aid from the state. On the other hand, things are different in Switzerland, where the state recently reagined full control of SBB Cargo. Renfe Merciancías seems to have chosen a different road by relying on a mastodon of the industry such as MSC. Is this type of public-private partnership the right path for the rail freight industry?