Economic Turbulence and Rail Network Quality Affect Hupac's Sustainable Transport Goals

Hupac Group reports a challenging period for combined transport that has been facing for a while now, with rising prices causing declining demand for environmentally friendly modes of transportation.

For Hupac, 2023 meant a significant decrease in traffic, having transported approx. 975,000 road consignments or 1,866,000 TEU, marking an 11.7% drop compared to the previous year. The downturn spanned across all segments of the Group's extensive European network, with transalpine transport through Switzerland experiencing a comparatively moderate decline of 7.6%.

The company attributes the root cause of this downturn to a declining demand for transport across Europe, further exacerbated by the onset of a recessionary trend linked to the Russian war in Ukraine and the energy crisis, impacting the global economy throughout 2023.

Compounding the challenges faced by Hupac was the deteriorating quality of the rail network, particularly in Germany, where neglected maintenance and inadequate construction planning have led to significant capacity bottlenecks, delays, and cancellations. "We expect that the forthcoming necessary general overhaul of the German rail network will be organized in a market-compatible manner so as not to nip the politically desired turnaround in transport in the bud," comments Michail Stahlhut, CEO of the Hupac Group.

Moreover, the August accident in the Gotthard base tunnel led to the closure of one of its tubes until September 2024, causing a substantial impact, particularly on Italian rail connections, which heavily depend on this route for access to Switzerland and the northern parts of Europe. Unlike in Germany, however, Switzerland's subsidy policy for the rail sector, extended until 2026, offers a glimmer of hope for the long-term market.

Overall, Hupac emphasizes the importance of continuing support for transalpine combined transport without compromising long-distance segments susceptible to reverse modal shifts. The company remains committed to its strategy for advancing climate-friendly combined transport, adapting its European network to meet market demands while focusing on productivity and competitiveness enhancements such as longer, heavier trains, terminal efficiency, and digital transformation.