Désirée Baer has been CEO of SBB Cargo for 100 Days

Désirée Baer has been CEO of SBB Cargo for 100 days now. This is an opportunity to draw an initial conclusion and establish the resulting strategic directions. Continuing the restructuring and further development, as well as focusing on customer needs, are the less spectacular features. Of course, SBB Cargo has also been significantly affected by Corona.

(Olten) Désirée Baer, CEO of SBB Cargo AG since March 1, 2020, presents her assessments and the resulting strategic directions for the company in her 100-day report. The Corona crisis has left financial traces and led to significant drops in traffic. SBB Cargo is consistently pursuing the path of restructuring and further development to achieve sustainable self-sufficiency. In addition, the freight railway is focusing more on customer needs and improving its adaptability to market changes.

Since Désirée Baer took office as CEO of SBB Cargo AG, the Corona crisis has impacted daily operations. On one hand, the crisis has shown that SBB Cargo, thanks to the large volumes transported, is an important part of the country’s supply and can respond flexibly to changing customer needs. This was evident, for example, in the rapid provision of additional capacities with short-term transports for retail through the significant efforts of SBB Cargo employees. On the other hand, the crisis has left financial traces. SBB Cargo has suffered traffic declines, like the rest of the industry.

Capacity Utilization and Customer-Oriented Offerings

Despite significant efforts in recent years, SBB Cargo has not yet achieved financial sustainability. The Corona crisis and the associated economic downturn are further increasing financial pressure. Additionally, the production system of SBB Cargo cannot respond quickly enough to changes, and the various customer requirements are inadequately addressed.

SBB Cargo is doing everything possible to meet the legal requirement of self-sufficiency. Freight transport remains central to integrating international and national goods flows and as a contribution of SBB to the shift policy.

Strategic Directions

To increase flexibility and profitability, SBB Cargo is focusing on the following strategic directions:

• SBB Cargo aims to respond more to the different customer needs and align its offerings with flexibility demands and specific customer requirements. This is intended to strengthen competitiveness and increase responsiveness to a changing environment. The partnership with Swiss Combi will further enhance the marketability and economic performance of SBB Cargo.
• The self-sufficiency mandated by the Freight Transport Act and the owner will be pursued consistently, which includes continuous optimization of the transport network according to market demands. The goal of self-sufficiency for SBB Cargo is to ensure reinvestment capability. The entrepreneurial thinking and actions of employees will be strengthened and support the cultural change.
• SBB Cargo utilizes the ecological advantages of rail freight transport, which are essential for shifting traffic, but also for the sustainable, climate- and resource-friendly orientation of supply chains.

The goal of restructuring and further developing SBB Cargo, to reduce costs through simple processes and structures, remains challenging in this highly competitive market. In addition to developing efficient supply and disposal solutions for economic areas, the company is investing in automation and digitalization. This is intended to make SBB Cargo more efficient, flexible, and faster. This increases the marketability of the freight railway while simultaneously lowering its structural costs.

SBB Cargo AG

SBB is the leading company in Swiss freight transport, with more than a quarter share of the total freight transport performance. Almost 16 percent is accounted for by SBB Cargo AG, which connects the major economic areas as the pulse of the Swiss economy. Annually, SBB Cargo AG transports around 29.8 million tons of goods net in wagonload, block train, and combined transport within Switzerland – equivalent to nearly 10,000 truck trips per day.

Photo: © SBB Cargo

www.sbbcargo.com

Comment by Andreas Müller

The three strategies of CEO Désirée Baer of SBB Cargo:

 

• Focus on the customer (was this not the case before?)
• Self-sufficiency, meaning generating profits (has long been a barely achievable goal)
• Utilizing ecological advantages (the railway has had these advantages for a long time)

are not really groundbreaking or new.

 

Perhaps the 35 percent stake of Swiss Combi AG – consisting of the logistics service providers Planzer, Camion Transport, Galliker, and Bertschi – will bring the hoped-for leap forward. The question is how this stake will be weighted, as these entrepreneurs are hardly interested in contributing to subsidies; they want a ROI (return on investment).

It will not help if these companies shift their own volumes to the railway unless this has already happened. It can only help if new products come onto the rails. For truly profitable rail freight transport, Switzerland also lacks heavy industry. This has been constantly shrinking in recent years. Actually, growth can only lie in extending the feelers further into the international area. But there is no one waiting for another player there either. One can be curious about the further development of SBB Cargo.