Swedish rail investments “urgent” for industry to flourish

Image: Shutterstock. Tommy Alven.

Investments in Swedish rail are a necessity for the country’s industry to flourish. One in four of Sweden’s industrial companies is seriously affected by disruptions, stoppages, or a lack of rail capacity. In the long term, this could hinder the sector’s competitiveness.

A quarter of all industrial companies in Sweden are seriously affected by disruptions, stoppages and the lack of capacity on the rail network, according to a report by Swedish Railways. Consequently, “it is urgent to intensify the work to improve the Swedish railways so that the Swedish transport system once again becomes a positive strategic asset that benefits Sweden’s growth and future prosperity”, the report says.

Swedish Railways argues that the current state of the country’s railway network is insufficient for the industrial sector, which employs 800,000 people in a country of 10 million. The Swedish railway network has received poor scores on international ratings and is in decline.

Disruptions have big effect on industry

The vast majority of Sweden’s industry is affected by the shortcomings of the rail network. Nearly 40 per cent of the industrial sector faces additional costs due to the need for extra storage, more expensive transport solutions and delayed deliveries to customers, for example.

Another 17 per cent face high costs due to production disruptions or stoppages. These companies also face long-term investment insecurity. Nine per cent of the sector indicates that rail shortcomings directly hinder planned investments and that this may lead them to move business to other countries.

“Our goods are heavy and need to travel long distances, so rail transportation is the only realistic option for us. It is also increasingly common for our customers to require rail transportation because they want to reduce the carbon footprint of their value chains”, an interviewed company stated. “But when we want to book shipments, we are already finding that the tracks are congested, and it is difficult to increase our outbound deliveries. This is threatening our expansion plans, and we are now investigating whether it is possible to locate more of our production to other countries, closer to our biggest customers.”

Two future scenarios

According to the report, there are two possible scenarios for the future of Sweden’s industry. A lack of new investment would not make a difference initially but would gradually degrade the competitiveness of the Swedish industry. New investments would be relocated elsewhere, and Swedish companies would fail to survive the competition.

With proper investments, increased production would be made possible as maintenance and capacity on the network would improve. By 2050, this could add three per cent to Sweden’s GDP, the report says.

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Author: Dennis van der Laan

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