What's Switzerland's secret for successfully shifting the bulk of transalpine cargo transport from road to rail within 25 years? The answer is clear: a host of innovative policy and funding measures have incentivised that switch.
In the early 90s, the Swiss were already laying the tracks for shifting cargo transport from road to rail – years before the launch of international initiatives such as the Kyoto Protocol and the Paris Agreement calling upon government and industry to commit to stringent environmental targets to combat climate change.
Today, Switzerland’s enviable 70/30 rail-road modal modal split for transalpine cargo transport sets a benchmark for other European nations. For example: the country’s alpine neighbours, Austria and France, still have a road-heavy modal split of 90/10 in this sector.
By implementing various measures, Switzerland has established itself as a trailblazer in developing more sustainable transport. The so-called "Alpine Initiative," which was voted into federal law in 1994, was the most comprehensive resolution. It drove additional policy changes, all contributing to a more favourable environment placing priority on rail over road freight:
- Dedicated funding for the modernisation of rail infrastructure: Switzerland has allocated around CHF 24 billion (21 billion EUR) to the construction of the NRLA (New Railway Link through the Alps) and a four-metre corridor expansion of the Gotthard Tunnel rail route. The goal: standardisation of base rail tunnel infrastructure at Gotthard, Ceneri and Lötschberg to better facilitate transit by freight trains and reduce travel times from north to south through the country.
- Disincentivising road transport: Switzerland introduced a distance-related heavy goods vehicle charge (HGVC), and since early 2001, trucks using all Swiss roads pay a distance-, weight- and emissions-related charge. Two-thirds of the revenues from the distance-related heavy vehicle fee (HVF/Leistungsabhängige Schwerverkehrsabgabe, LSVA) are allocated to the Rail Infrastructure Fund (RIF), from which infrastructure projects such as the NRLA project are financed.
- Railway reform to incentivise rail transport: Switzerland liberalised its freight market and opened the rail network to third-party rail companies to increase competition.
- Alignment of transport policy with the European Union: The Land Transport Agreement between Switzerland and the EU (2002) has recognised the Swiss modal shift policy as being in compliance with European policy.
- Government subsidies for industry: Switzerland offers subsidies and grants for unaccompanied combined transport and the Rolling Highway to encourage the modal shift.
These measures have proven very successful in shifting transalpine cargo transport in Switzerland from road to predominantly rail. With a record volume of 209.4 million tonnes transported across the Alps in 2016 (According to statistics by the European Union and the Swiss Confederation Federal Office of Transport - FOT), the modal share of rail in Switzerland reached a new record of 71%.
The figures for its Alpine neighbours, however, look drastically different: In 2016, Austria's rail share comprised just 30%, and in France only accounted for 8% of all goods carried across the Alps. Another milestone for Switzerland: for the first time in 20 years, the total number of heavy goods vehicles (HGV) crossing the Swiss Alps per annum fell to below one million.
Transalpine goods traffic for 2017 also shows an equally diverse mix of rail and road traffic between the three nations.
Whilst the rail share for transalpine cargo remains relatively low in France and slightly higher in Austria, Switzerland's transalpine goods transport in 2017 stood at 70%. The share of combined transport in rail transport in Switzerland rose from 17% to 74% between 1981 and 2017.
The 1994 Swiss law mandated the reduction of number of journeys by domestic and foreign trucks and semi-trailers through Switzerland from 1.4 million in 2000 to 650,000 by 2018. Even though the Alpine Initiative has been criticised for failing its ambitious goal, the overall number of heavy goods vehicles travelling through the Swiss Alps amounted to 954, 000 in 2017 – despite increased overall traffic volume. Without the law, experts estimate that an additional 650,000 to 750,000 trucks would be crossing through the Swiss Alps each year by now.
Switzerland has proven that transitioning cargo from road to rail is feasible and effective on many levels: it has resulted in significant and much-needed reductions in emissions – resulting in better environmental protection. It has also significantly reduced road congestion across Switzerland, leading to substantial savings and cost benefits for the logistics industry.
Switzerland’s success in moving cargo transport off its roads and onto its rails is proof that favourable framework conditions can make rail freight services economically viable. Tools such as funding, incentives and government subsidies could be implemented by other countries to lay their own tracks for a more sustainable, efficient and rail-centric cargo transport system, even without a comprehensive reform of the railway system.
With the success in transitioning the bulk of transalpine cargo transport from road to rail, Switzerland is now focused on effecting a similar shift for the domestic transport of goods as well as for imports and exports. In 2017, the market share of rail in domestic, import and export traffic was only about 25 percent. However, the joint venture between the Swiss consortium Cargo Sous Terrain and Virgin's Hyperloop One aims to develop a fully automated freight transportation system connecting major transport hubs in Switzerland – with the goal of encouraging the shift of cargo from road to rail in the next decade.
This article is part of CS WINdow, Contship Italia Group's quarterly newsletter, featuring insights on the global supply chain, with a focus on European intermodal logistics. You can subscribe to learn more: