‘Many contracts won or renewed’

RLE’s revenue was down 1,6% to 1,8 billion euros, the decline being mainly attributable to the commercial discontinuity of Fret SNCF (now Hexafret) imposed by European Commission competition requirements. Nevertheless, the EBITDA margin rose to 14.4% versus 11.4% a year earlier. Reviewing the 2025 financial year, the SNCF Group said that RLE had delivered satisfactory results despite difficulties in Europe’s rail freight sector. An unfavourable economic environment and supply-side constraints placed significant pressure on many market participants.

Commercial momentum remained strong, with many contracts won or renewed, including the renewal of steelmaker ArcelorMittal’a freight business in France. Intermodal activities – Forwardis, Naviland Cargo and VIIA’s rolling highway operations – continued to grow as new volumes were gained. New subsidiaries Hexafret and Technis, borne out of the discontinuity of Fret SNCF and, both established at the beginning of 2025, improved service quality in a stabilised social and operational environment and increased their profitability, the SNCF Group noted.

As for Geodis, which has significant rail freight interests, with approximately 120 trains in circulation every week operating across France and Europe, 2025 revenue came to 10,6 billion euros down 3.9% from 2024 on a scope, current and methodology basis. However, it managed to preserve its profitability, holding its EBITDA -to-revenue ratio at the same level as in 2024 (10.7%).

Ukrainian Railways orchestrated the convoy’s continuation to Kyiv. “The operation required exceptional logistical mobilisation,” according to RLE, who noted that teams worked in shifts to quickly classify and allocate routes, obtaining special transport permits in just a few days while ensuring the security of the transport from France to the Ukrainian border.

“Today, many essential safety procedures, such as brake tests, train composition checks and axle health monitoring, are still performed manually. Often under difficult conditions — at night, in bad weather — and they are both time-consuming and safety-critical,” explains Antoine Belleguie, innovation project manager at Rail Logistics Europe.

The freight branch of French state operator SNCF (Rail Logistics Europe) is leading the MONITOR project, a collaborative effort launched in 2023 with partners Wabtec and Régie des Transports Métropolitains (RTM) and funded by the French State as part of the France 2030 programme operated by ADEME. Their shared objective is to design, develop and demonstrate a digital monitoring system that can turn traditional manual processes into fast, reliable, data-driven operations. “Our objective is to design, develop and demonstrate a digital monitoring system that transforms traditional manual processes into fast, reliable and data-driven operations.”

MONITOR will equip freight wagons with onboard sensors connected via wired links to control units on each wagon. The main control unit then communicates wirelessly with a central Line Control Unit (LCU) – the brain of the system – which in turn interfaces with the driver through a dedicated human-machine interface. This architecture transforms raw sensor signals into real-time insight into wagon health and train performance.

From one hour to a few minutes

One of the most time-consuming tasks in freight rail is the pre-departure brake test, which currently takes 45–60 minutes for an 850-metre train. With MONITOR, this procedure — traditionally requiring two operators and a full walk along the train — will be digitalised and carried out by the driver alone. Automation is expected to cut the duration of the brake test to just a few minutes, while providing a more robust confirmation of braking performance. “The system sends results directly to the driver’s tablet” Belleguie says. “This is not only a major timesaving, but also a safety gain, as the driver no longer needs to walk along the entire train to perform visual inspections.”

This faster train preparation reduces delays and improves network efficiency and is just one of the many benefits. It’s also another step towards predictive maintenance, detecting brakes, axles and vibration, continuously, to detect issues before they cause failures. At the same time, the system promises to lower costs, mainly by reducing emergency interventions and infrastructure damage. Safety is also set to improve, since ground staff are less exposed to harsh conditions. Lastly, the system cuts energy consumption and extends component lifetimes, leading to environmental gains. “The value is holistic — MONITOR is a transformation tool, not just a set of sensors,” Belleguie emphasises.

Real-world testing in 2026

MONITOR technology will be tested in 2026 on a limited number of wagons in real-world conditions in France. These pilots’ deployments will assess the sensors’ robustness in real operations, as well as communication performance between wagons. If successful, the technology could then scale across Europe, supporting the shift toward smarter, more competitive freight rail.

MONITOR is just the first step toward a fully digitised freight wagon. “Once brake tests, axle condition monitoring, and intra-train communication are digitised, the path opens for richer functionalities: Predictive maintenance, continuous train integrity verification, or even advanced operational automation” Belleguie sums up.

The project complements initiatives like Digital Automatic Coupling (DAC), which modernises the physical connection between wagons. DAC provides automatic coupling, a power supply and a digital backbone for data exchange. MONITOR brings real-time wagon intelligence. Together, they could reshape European freight rail, making it safer, more efficient, and more competitive.

This produced an improvement in margin from 9.9% in H1 2025 to 12.0%, “the result of restructuring efforts and sector-specific public subsidies for decarbonising freight transport,“ SNCF said.

‘Robust’ operating model

The performance reflected “the robustness of its model, which is based on a rigorous commercial strategy, good geographical and service diversification, and control of its logistics flows, “ it added.

H1 2025 was marked by the launch on 1 January of two new businesses borne out of the discontinuity of Fret SNCF: Hexafret (rail freight) and Technis (locomotive maintenance) which “began operating successfully, despite a sharp drop in demand and the transfer of train services and dedicated resources to third-party operators“ – following the structural separation procedure imposed by the European Commission.

There were also major contract wins for RLE with French oil & gas giant TotalEnergies and Tricon Energy, in the Netherlands.

Buoyant activity from subsidiaries

As for the performance of RLE’s subsidiaries, rolling highway operator VIIA increased its activity by more than 14%, driven by strong volumes on its main Bettembourg-Le Boulou Lorry Rail service, which stretches from Luxembourg to the French-Spanish border.

Forwarding arm Forwardis posted a buoyant first half-year reflecting momentum in the liquid petroleum and agro-food products segments, while Combicargo also posted volume growth despite an unfavourable market environment for maritime container transport.

The first half of the year also saw RLE begin a scheduled high-speed rail service dedicated to Amazon, which travels 470 kilometres in just two hours between Paris and Lyon and is expected to transport half a million packages annually.

The reopening of the France-Italy rail line at the end of March, following its closure in August 2023 due to a major landslide in the Maurienne Valley, was also a positive development. However, on the downside, the Alpine Rail Motorway (AFA) has not yet re-entered service.

Global results and outlook

SNCF’s group’s H1 revenue totalled 21.5 billion euros (+0.6%), driven by growth in passenger rail transport. Profitability improved significantly with an EBITDA of 3.6 billion euros, up 500 million euros compared to the first half of 2024. All of the group’s activities improved or maintained their profitability “despite a challenging economic environment.“

Commenting on the outlook for the group as a whole, during the second half of 2025, SNCF said it would “continue efforts to cope with a tense economic situation and pay particular attention to macroeconomic developments.“

Amazon has been increasing the presence of rail freight in France. The American company has been using the Le BoulouBettembourg and Le Boulou-Calais rolling highway services operated by VIIA, another member of RLE. “The company has thus doubled the share of rail in its transport in France since 2022, representing more than 25% of Amazon’s inter-site stock movements in France by 2024”, Amazon said in a press release.

Amazon and the failed high-speed experiment in Italy

The e-commerce hegemon claimed that this initiative is a “first for Amazon’s European operations: parcel transport by TGV”. Despite being technically true, it is not the first time the company tries to put freight on high-speed trains in Europe. Between 2018 and 2022, a high-speed train converted to carry freight ran between the Maddaloni terminal near Naples to Bologna, in Italy.

The service, called Mercitalia Fast, was launched with the Italian state-owned logistics group FS. Amazon was the sole customer of this service and was discontinued in November 2022. Initially, FS said it would have been a temporary interruption, but now the converted train went to the scrapyard and the transshipment facility at the Maddaloni terminal has been demolished.

The terms and conditions laid down in the European Commission’s agreement with the French authorities on the discontinuity of Fret SNCF – it was suspected of receiving illegal aid from the country’s state railways running into several billions of euros – is that up to 49 per cent of RLE’s capital be opened up to outside investors.

Looking for a minority shareholder is not easy

“The Commission has not been explicit on the timeframe for the execution of this operation and we see it as a second phase development. The important thing will be to establish co-control of RLE in partnership with a minority shareholder. We’ll be able to say more about this issue in the second half of the year. For now, we’re still in the process of launching two new companies.”

The view from some market commentators is that potential investors in RLE may be put off by Hexafret’s poor profitability prospects, given the high operating costs and low margins in the single wagon load segment, the new company’s core business. However, the spokesperson played down such reasoning as it was the capital of RLE as a whole that would be opened up and not Hexafret’s solely.

“As far as Hexafret’s profitability is concerned, we are positive about its business plan and outlook, with a return to the level of Fret SNCF sales in 2025, thanks to work on our service offering and sales function, on structural costs, through identifying new growth markets and making strides in production to optimise our transit times”, the spokesperson concluded.

“That continuity and the market positions achieved through our diversification strategy have paid off, securing solid positions in our markets and generating profitable growth while stabilizing our debt.”

Positive results from the rail freight cluster

Rail Logistics Europe (RLE), which groups all of the French state railways freight subsidiaries, posted an EBITDA of 211 million euros, an increase of 11.4 per cent on the previous 12 months. Turnover rose 7.9 per cent to just over 1.8 billion euros driven by dynamic activity in certain market segments. Year-over-year growth was also due in part to the fact that 2023 results had been negatively affected by prolonged industrial action.

Last year was characterised by major upheaval for RLE with the discontinuity of Fret SNCF, ordered by the European Commission following suspicions of receiving illegal state aid. The rail freight unit was forced to relinquish 23 traffic routes. “Yet, in addition to the favourable basis of comparison resulting from the strikes in 2023 which disrupted access to the rail network, the withdrawal of these routes was offset by an aggressive push to expand business overall, despite competition from road transport. Volumes were thus higher than projected, particularly for chemicals and petroleum products,” SNCF noted.

Captrain’s pan-European business was resilient in a tough macroeconomic environment. In France, Captrain teamed up with Eiffage Rail to win a contract for renovating high-speed and conventional lines using special works trains. This contract will run from 2025 to 2030. Naviland Cargo, which specialises in the transport of maritime containers by rail, posted a solid year, boosted by its acquisition of Lardon at the end of 2023. Forwarding arm Forwardis posted a record year in terms of traffic volumes in the gas, petrol and chemicals segments.

As for RLE’s rolling highway operator, VIIA, 2024 was a buoyant year with an increase in frequencies and load factors. The Bettembourg-Le Boulou Lorry Rail service, stretching from Luxembourg to the French-Spanish border, achieved record load factors. As for the Alpine Rail Motorway (AFA), linking France and Italy, it has been suspended since a major landslide in the Maurienne Valley with its resumption expected in the second quarter of 2025.

Towards decarbonisation

Moves to streamline RLE’s business portfolio continued last year, SNCF added. Turning to the development of modal shift and the decarbonisation of goods transport in France, RLE transported more than 30 billion tonne/kilometres of freight in 2024, with 80 per cent of the traction powered by electricity. It was thus able to reduce CO2 emissions by 1.7 million tonnes.

Getting finances back on track

“For years, (Fret SNCF) accumulated losses of 150 to 200 million euros a year, as well as building up a debt of 5 billion euros, made up of aid granted by the French government, which the European Union suspected of being illegal”, Delorme pointed out. The ‘transformation’ wipes out such (debt) liabilities and in addition, the cost of employer’s contributions for the 80 per cent of the workforce who have railway worker status.

This initiative represented outgoings for Fret SNCF of 18 million euros annually, but will now be paid by parent company, SNCF. “This will result in a more level playing field as SNCF’s rail freight counterparts in Germany and Belgium, for example, already benefit from such an arrangement,” he explained. Delorme is confident Hexafret can be a going concern and be profitable and highlighted what he believes are its real strengths.

Given the feedback received from many of its customers on making greater use of rail freight going forward, RLE estimates that the combined turnover of Hexafret and Technis will be equivalent, in 2025, to that of Fret SNCF in 2023 – 700 million euros. “Our operating margin will be positive, as it was in 2021 and 2022, but at a level we have never achieved in the past.”

Positive market outlook

As to the outlook for the rail freight market in France, Delorme pointed to the recovery plan lobbied for by the 4F alliance of French rail freight operators in 2021 which has created “a favourable climate” for business. An aid of 200 million euros is earmarked each year for the sector, including 100 million euros for the single wagon segment, which will account for 70 per cent of Hexafret’s activity.

A State-EU investment programme totalling 4 billion euros dedicated to rail freight infrastructure, will go a long way towards improving service reliability, he observed. “There is a real appetite among shippers for rail freight at a time when they must all play their part in decarbonising transport. Rail freight emits nine times less CO2 than road freight, while solving some of the problems of road infrastructure congestion.”

Tackling the strikes

One of Delorme’s biggest tasks will be to bring some stability to labour relations. Some union representatives view the creation of Hexafret and Technis and the arrival of an external investor as ‘gradual privatisation’ which has been one of the reasons behind recent industrial action.

“It is true that we have been penalized by strikes that I would describe as political and that go beyond SNCF, such as the strike in protest to pension reform. As far as labour relations are concerned, I want to achieve a high level of dialogue which is the key to keeping and attracting staff and providing a good service to our customers. I am reaching out to the unions so that we can reach good agreements.The good news is that we are operating under excellent service quality conditions. Our order fulfilment rate is at 97 per cent.”

Looking for investors

The framework of the agreement between France and the European Commission on the discontinuity of Fret SNCF stipulates that RLE must find an investor to take a minority stake in its capital. “What is important to note is that such a move is in line with our development strategy for RLE. Whether the investor be public or private is not the issue as long as it has the development of rail freight at heart,” Delorme added.

“Such optimisation is in line with current market trends in maritime transport where demand for 40-foot containers is constantly growing to the detriment of 20-foot containers. This strategic transition is therefore seen as a clear and proactive response to our customers’ expectations, illustrating our ability to adapt and meet their needs,” he added.

850-metre trains

With the new wagons, a train will be able to load up to 54 40-foot containers compared to 35 today. They will also enable an increase in train length from 730 metres to 850 metres where rail lines allow it. Interoperability is also a feature of the new wagons, enabling goods to be transported abroad, notably to Spain, thanks to reinforced couplings required for train traffic in that country. Moreover, the new equipment is compliant with new European regulations, including the ‘STI Plus’ which focuses on the reduction of noise pollution during operations.

SNCF underlined that RLE’s markets showed very uneven trends in the first half of 2024, with some industrial verticals struggling, such as steel products, while others were buoyant, i.e. grain shipments.The chemicals vertical did well in France but not in all countries where the group is active. Moreover, the closure of rail services between France and Italy through the Maurienne Valley following a major landslide in August 2023 continued to affect cross-border traffic.

Rolling highways and multimodal transport

After a rough start to the year with various incidents and disruptions, VIIA’s rolling highway services turned in a positive performance. The lorry-rail service between Bettembourg (Luxembourg) and Le Boulou (French Basque Country) reported record load factors. On the other hand, VIIA’s Autoroute Ferroviaire Alpine remained out of service due to the landslides in the Maurienne Valley.

Market conditions have also improved for Naviland Cargo, the group’s forwarding and multi-modal transport operator, after a dip in business at the beginning of the year. The main issues here were triggered by a massive re-routing of ships around Africa, in the context of the Red Sea Crisis. RLE’s rail freight forwarding arm, Forwardis, also signed a memorandum of understanding with Hubei Port Group for European intermodal transport and logistics projects between China and Europe.

Captrain group

Finally, Captrain, which is present in markets in Germany, Belgium, Italy, Spain, Portugal, Poland and France, business was patchy but resilient in the first half of the year. In France, Captrain teamed up with construction group Eiffage Rail to win a contract for the renovation of high-speed and standard railway lines using special works trains. This contract will run from 2025 to 2030. Captrain Netherlands was sold to Austrian Rail Cargo Group at the end of May 2024.

The future of Fret SNCF

The discontinuation of Fret SNCF is being implemented to avoid heavy financial sanctions from the European Union. It was projected to reduce the company’s traffic by 30 per cent, its turnover by 20 per cent and its workforce by 10 per cent. As a result, between 15 and 20 of its best-performing routes were ceded to competitors, including several to DB Cargo France.

Fret SNCF will cease to exist at the end of the year and give way to two new rail freight entities, New Fret and New Maintenance. New Fret will be be headed by the current CEO of Fret SNCF, Charles Puech d’Alissac. However, there are restrictions on its scope of activity as under the terms of the discontinuity plan it will be prohibited from operating regular block trains and combined transport for 10 years.