Financial allocation

The agreement also highlights how funds will be deployed to support SWL over the next four years. The 260 million francs will be spread roughly equally throughout the period, with a little over 64 million francs (68,5 million euros) each. The main difference is that five million francs of the funds for 2026 will be used for investments, while all the rest will be allocated for compensation.

What changes?

The new agreement brings in a few requirements for the state-owned operator. “For example, with the new funds, cross-subsidies will no longer be possible”, the FOT specified. In other words, the company will have to reinvest its (possible) profits in the development and modernisation of the SWL segment.

Moreover, SBB Cargo will have to be more transparent. They will have to report quarterly to the FOT, making key parameters on transport performance public on the Office’s website. A semi-annual report will be also published on the development of the SWL offering portfolio. Finally, SBB Cargo will have to keep a detailed financial account on the segment which will be presented yearly to the FOT.

SWL in Switzerland

Despite winning this concession, the situation regarding SWL at SBB Cargo seems to be a rollercoaster ride. On the positive side, the company said it renewed various contracts with shippers (including Migros, Vigier, and Stahl Gerlafingen), some up to ten years. “This means that over 95% of customers will continue to rely on SWL in the long term”, it said. On the other hand, however, the company is planning to close three terminals in Chiasso, Brig and Buchs and firing 40 people. Five more might follow the same fate, costing the job to at least 25 more workers.

Single wagonload operations allow companies that do not export enough goods to form a block train to transport their goods by rail. Single wagons, or a small number of wagons, from various companies are combined into trains at shunting yards, from where they depart to the train’s destination.

This type of rail freight operation requires a lot of movements, which leads to high costs and makes it very challenging to run a profit on it.

Rail freight transported 39,3 million tonnes of goods in the Netherlands in 2023, which is around 2% of the total volume of transported goods in the country via all modes of transportation: rail, road, waterways, air and pipelines, according to infrastructure manager ProRail. (Rail freight has a modal share of around 5% to 6% in tonne-kilometres, according to Netherlands Institute for Transport Policy Analysis.) Some 15% of the rail volume is moved through SWL operations: approximately 6 million tonnes. That would make for around 0,3% of the total volume of goods transported in the Netherlands in 2023.

In other words, single wagonload only accounts for a tiny fraction of total freight transportation in the country. Despite that, the infrastructure ministry recently announced a 30 million euro investment in shunting operations at the Kijfhoek rail yard, close to Rotterdam.

The investment should help suppress costs, lead to reliable and more sustainable freight flows and support ports and industries. In a policy plan, the Netherlands explains that it wants to change the operating model with a neutral service offering at the Kijfhoek rail yard. That means that infrastructure manager ProRail will take over shunting locomotives from DB Cargo, which is currently the only operator that has them.

The neutral service offering will then periodically be put to the market. That should also improve the accessibility of shunting at Kijfhoek for other companies that offer SWL services, say the Netherlands.

Are the Dutch not reading the room?

The move to support SWL operations at Kijfhoek could be seen as somewhat remarkable. In Germany and Switzerland, recent developments have suggested a move away from SWL because it is not financially viable. As part of its restructuring process, DB Cargo floated the idea of quitting single wagonload altogether. The Swiss SBB Cargo is planning to close three SWL terminals.

Dutch rail freight association RailGood has been opposed to the investment, saying that it primarily allows large companies with foreign shareholders to profit from lower fees and that it is a “waste of taxpayer money”. Why, then, would the Dutch government commit to a multimillion investment in SWL?

The answer is found in a report by infrastructure manager ProRail. It points out that single wagonload operations are crucial for a number of economic sectors, like the steel, chemical and paper industries. It is no wonder that shippers’ association evofenedex has been supportive of the 30 million investment.

A necessity for some industries

The products of the steel, chemical and paper companies are often unsuitable for container-based transport, and cannot move via the road for various reasons. “In particular for long-distance transport, the railways are a secure mode of transportation”, says ProRail. “In some countries, particular groups of chemicals can only be transported by train.”

The availability of SWL services should also improve the business climate in the area of the Port of Rotterdam. “For the abovementioned reasons, SWL has a high (potential) economic value for the Netherlands and can play a role in making both existing and transport flows more sustainable […]”, says ProRail.

In 2022, 130 companies moved their goods by single wagonload transport in the Netherlands. The vast majority of those are in the steel and chemical industries, which add 24 billion and 55 billion euros to the Dutch economy. The SWL investment comes at a moment when eight chemical companies have already left the country in 2025 due to the high costs.

Beyond the Netherlands

The Kijfhoek rail yard offers connections to various industrial zones across the Netherlands, but also to European destinations. Freight flows to and from Germany dominate here (80% of the total international traffic), with around 100,000 wagons being exchanged annually with the Netherlands’ eastern neighbour. Kijfhoek sorts around 175,000 wagons yearly.

Other European countries have seen their single wagonload operations decline, says ProRail, and are therefore resorting to active support measures. France currently has a 450 million euro scheme for first and last-mile operations, and Germany spends 300 million euros in subsidies for SWL. In 2023, Belgium invested 15 million euros as a stimulus package for the Antwerp Noord rail yard.

It seems that the Netherlands has chosen to support SWL, in order to not fall behind European competitors in attracting (rail) freight and to support the modal shift. Despite that, ProRail foresees no spectacular SWL growth in the coming decades. In a best case scenario, with a level playing field between rail and other modes of transport, the Digital Automatic Coupler and Automated Train Operations implemented, a neutral service offering at Kijfhoek and Industrial growth, the maximum SWL volume in 2050 is 9 million tonnes (+50% compared to 2024).

In a worst case scenario, where none of those positive factors come true and the road sector manages to become more sustainable, SWL volumes could be as low as 2,8 million tonnes in 2050.

Spool forward to the loveless reality of twenty-first-century railway operations. What might you actually encounter at a level crossing? In the pragmatically monocultural North America, drivers get by with a written “Railroad Crossing” sign. Well, literate drivers anyway. No matter which side of the Atlantic, drivers with any native language will certainly not encounter a steam-hauled wagonload pick-up goods service, crawling between numerous sidings, shuffling wagons individually before moving on to the next stop a few miles (1.6 times a few kilometres) down the line.

The changing landscape

Why has that picture changed – if that picture ever existed at all? Looking around, there are clues. No longer are drivers from Bristol or Berlin, sitting at that level crossing while the air-cooled engine in their VW Beetle slowly overheats. The butcher, baker and candlestick maker shops on the other side of the tracks are now hairdressers, coffee shops and estate agents. As is so often overlooked, it’s not just the railways that have changed in isolation. The rest of the world has moved on too.

If those drivers at the level crossing – now automated, half-barriered, and flashing-lit instead of a signalman unlocking a pair of wooden gates – are heading for the out-of-town supermarket, then you have the reason why wagonload freight is as endangered as full-fat milk and carrying cash.

Europe catches up with Britain’s decline

Cutting to the chase, wagonload traffic across Western Europe is under strong structural pressure. Growth and investment are being concentrated on intermodal and block-train traffic, while traditional wagonload systems are being rationalised, reorganised, or wound down. In Britain, that meant the cessation of the former British Railways Speedlink service in 1991.

It’s taken mainland Europe a long time to catch up (or join the race to the bottom, depending on your point of view). However, in Germany, wagonload is in steep decline. The government-backed Deutsche Bahn has publicly presented reorganisation plans amid industry and political backlash, because DB still handles the lion’s share of German wagonload rail freight.

Road takes the spoils

Germany, like everywhere else – and Britain in particular – is reaping the harvest of surrendering wagonload to alternative means of transport. That almost invariably means truckload. What are – in rail terms – small consignments are just about right for the articulated lorries (semi-trailers) of British motorways, German Autobahn and Italian autostrada. Britain, despite thinking it’s still a big player, remains a small archipelago where the costs of transhipping from road to rail to road just don’t add up for wagonloads.

Truth is, if you’re sitting at that level crossing today, probably in your Wi-Fi-connected electric VW Golf, it’s an intermodal block working that’s speeding by, point-to-point from port to inland terminal. Only on arrival there are repacked shipping containers transferred to waiting trucks for the ‘last mile’ to the final consumer destination. More than likely, it’s the out-of-town supermarket to which you’re so patiently waiting to drive.

Survivors and reinventions

In this block-train and clock-face-timetabled world, could there be a future for wagonload freight? Well, before we get ahead of ourselves, the species is not quite extinct. It’s not even entirely disappeared in Britain – although one has to stretch a point to say, for example, the short-formation nuclear flask trains represent wagonload freight.

Players are attempting to bring small consignments back to the rails. InterCity RailFreight runs under the mainstream radar, carrying high-value packages (usually medical supplies) around on the passenger network. Varamis Rail, a full-fledged operator, has its own trains and carries individual logistics packages between Birmingham and Glasgow. Both are hybrid operations that deserve recognition, even if their description as wagonload may, again, require a little latitude.

Continue to wait – another train may be coming

Still standing at the level crossing. The barriers are down, the lights are flashing, and the road traffic is halted. A train passes. It’s long, fast, and containerised. It is the image of modern rail freight. It’s efficient, consistent, and utterly unlike the stop-start pick-up goods of the past. Thomas the Tank Engine would be feeling a little bit intimidated.

As the last wagon vanishes into the distance, there’s a moment to wonder. The lights are still flashing. Is another train coming? Could it be a modern reincarnation of the wagonload – adapted to today’s economy, powered by digital logistics, and filling the gap between intermodal giants and delivery vans? Perhaps. For now, though, the rails ahead are clear, and the only sound of the future is the distant hum of a motorway autostrada that never sleeps.

Some rail freight industry insiders have reacted furiously to the news: “They [DB Cargo management] do not seem to have an idea what they may be kicking off here, unless this is just another political signal and an indirect call for more financial support”, says Martin Metz, an economist, a life-time international rail finance expert and independent advisor, to RailFreight.com.

To cut a long story short, years of misconceptions at the highest level have led to this moment. Now, German (and international) rail freight could stand on the brink of a mess.

The long story

“The market has seen this coming for more than twenty years”, continues Metz. From a corporate governance perspective, it starts with a sequence of transport ministers in Germany, he says. “They have not used the government’s role as owner of DB properly, nor taken the control function of their supervisory committees seriously, to force DB to define a fundamental business, sector and corporate strategy.”

In Europe, we have collectively decided that we want more freight on rail, rather than on the road. “If politics wants rail freight, it needs to push DB to formulate a strategy”, explains Metz. “Thinking it through, purely from an economic and free market point of view: where private operators can perform better, DB Cargo may not necessarily be needed as a block train operator”, he continues.

“Except, basically, for services as an operator of last resort. The state railway needs to do those things that no one else can do: marshalling and single wagonload.”

The role of DB Cargo on the German rail freight market is in decline. Private operators that perform better have overtaken its market share, but DB Cargo still dominates in SWL: it occupies around 90% of that market. That has been possible, because as a state company, it did define its role for a long time as the operator for all services, even if some operated at a loss. If the company now gets rid of the SWL business, it could essentially bring about the end of that market segment in Germany.

Many companies rely on SWL

Dirk Munder, a rail consultant, says that killing SWL is the wrong way forward to stabilise rail freight. “If you want to have profitable rail freight, you need more single wagonload transports.” The logic here is the same: capture more freight, get more rail freight business.

At the same time, many companies simply rely on SWL for their business. For example, the chemical industry: “They send their products to smaller customers who need single wagonload deliveries. Without it, they won’t be served anymore.”

Besides a simple necessity for single wagonload transport, a reduction in SWL services would also mean a decline in the quality of rail freight. “Fewer trains will also mean that some wagons might miss daily departures from shunting yards”, Munder explains. If there are three daily departures now, but that is reduced to one, then there is a bigger chance that a shipment will need to wait longer. “As a result, people won’t know when their freight is going to arrive, leading to reduced quality.”

“There are a lot of companies that want to do more on rail”, continues Munder. “But it is not reliable enough. There are customers that need to call shunting yards to ask for information about their shipments.” It does not necessarily need to be that way. “If I look at the website of BNSF from the US, they market their shunting yard dwell time”, says Munder. “Nobody in Germany will make this figure public, because it would be too bad. It’s an indication of the quality.”

The future of SWL

The views of Metz and Munder are clear. DB Cargo is blundering, and it will hurt rail freight ambitions. Where do we go from here?

Munder does not beat around the bush. “You need to quit DB Cargo”, he says. “They can’t organise this. It’s a state organisation rather than a company. It is difficult to make improvements in an organisation. It is not a matter of drivers or rolling stock, it’s the organisation and how to make smooth processes.”

By contrast, private companies can do much better. “They have dynamic and smooth organisational structures. You need a new start of the system, something new from the ground up.”

Metz, on the other hand, sees it differently. Again, he says that the state operator needs to do those things that no one else can do, in particular marshalling and single wagonload transports. “DB Cargo must provide, as a function of infrastructure (and single wagonload is infrastructure), single wagonload services”, Metz argues. “They must define their role as operator of last resort, allow the efficient operation of the overall system and accept to take a loss on it.”

Remote village on a hill

In other words, DB Cargo must formulate a strategy, and that strategy needs to revolve around providing a public SWL service. Against a loss, perhaps, but it is public infrastructure. “The state operator should be the operator of last resort: it needs to go to a remote village on a hill and take their one wagon and bring it to a marshalling yard.” At the same time, Metz says that you can also decide not to do SWL altogether, but then you also need to accept that rail will be inaccessible to many smaller companies and that the freight base will be smaller.