SBB Cargo cuts jobs and plans logistics partnership

The Swiss rail freight company is redeveloping its business and strengthening system wagonload traffic between economic areas

SBB Cargo cuts jobs and plans logistics partnership

SBB Cargo is repositioning itself: the rail freight company strengthens system wagonload traffic for an efficient supply of economic areas. In the small-scale, irregular single wagonload traffic, around 170 control points will be tested for alternatives together with the customers by 2023. The goal is to achieve a black zero by 2020, and to be fit for partners who strategically shape the business.

In view of the urgent need for further development, it would be essential to reduce some 330 of today’s 2,200 jobs by 2020, including around 100 administrative posts, around 80 locomotive drivers, and around 150 shunting personnel. At the same time, automation and digitization will be actively exploited, the company states in a press release. By the end of 2023, SBB Cargo is expected to be able to provide its services with around 800 fewer employees than today.

After SBB Cargo Switzerland has comprehensively restructured its business over the past few years and posted positive results after a long time again in 2013, 2014 and 2016, the freight railway is again under great pressure. Although SBB Cargo International was able to improve its result in 2017 despite the seven-week break in Rastatt, Germany, the system wagonload traffic between Swiss economic areas declined slightly by 0.8 per cent in loaded carriages, while transport of small and irregular volumes in single wagonload traffic fell sharply by 14.5 per cent. This decline has accelerated contrary to the common development plans with customers – also because the trend towards smaller shipments and more flexibility has increased and will continue to do so.

For this reason, SBB Cargo Switzerland will close the year 2017 with an operating loss of minus CHF 37 million and, due to the expected business development, make a value adjustment of CHF 189 million. There are also provisions of CHF 19 million for the restructuring phase.

A reorganisation and further development program to make the rail freight company fit for partnerships is imperative: SBB Cargo should become a lean company geared to customer needs and the strengths of the railways. “The challenging goal is to maintain the position in the logistics chain with the help of automation and further efficiency gains in administration. The quantities in wagonload traffic should decrease only slightly until 2025,” reads the press release.

SBB intends to strengthen its partnership with other market participants and investors by strengthening SBB Cargo. This model is already successful with SBB Cargo International. From mid-2018, talks will be held with potential partners who support the Swiss rail freight company as a reliable and financially sustainable company, strategically shape the business, invest and share successes and risks. For this purpose, SBB Cargo will be further separated from the group and will be managed as a subsidiary from January 2019.