Switzerland Weighs Risks of Being First to Implement DAC

Switzerland is a key player in rail freight transport and a leader in technological innovation. However, its approach is not purely technological but remains strictly economic and rational.

"Being the first to adopt Digital Automatic Coupling (DAC) may not be an advantage." The governments of Switzerland, Germany, and Austria, along with companies from these countries, are the most active participants in the DAC implementation project. In August last year, the Swiss government pledged a one-time investment of 180 million francs (approximately 190 million euros) for DAC deployment. However, some Swiss politicians, such as Lorenzo Quadri from the Conservative League Ticino party, have expressed concerns about the consequences of Switzerland implementing DAC ahead of the rest of Europe, according to the magazine Railfreight.

"We must consider that these technologies will not be ready in the European Union for another 10 years. If Switzerland is first, it may not necessarily be beneficial," said Quadri. Concerns are also growing about the costs associated with the ambitious goal of shifting a significant share of freight transport from road to rail. The Swiss Road Transport Association (ASTAG), the Swiss Confederation of Arts and Crafts (USAM), and the Swiss Business Federation (Economiesuisse) argue that the national rail freight policy will cost taxpayers 28 billion francs (29.1 billion euros) in public subsidies by 2035.

Even with full implementation of rail projects, they claim the shift to rail would not be significant. According to them, this strategy is a dangerous utopia that carries unintended consequences. ASTAG, USAM, and Economiesuisse assert that prioritizing rail freight too heavily could slow down the decarbonization of road freight transport and lead to higher transportation costs for end customers.

Switzerland Supports DAC and Single Wagonload Transport (JVZ)

The Swiss Federal Office of Transport (FOT) has launched an initiative focused on dialogue with the industry, aiming to improve rail freight operations and promote Single Wagonload Transport (JVZ). Until the end of March, companies can submit proposals on how to improve JVZ management. The FOT will evaluate these proposals and initiate an official tender process (RFO) by August 2025, with contract signing expected by the end of the year. Projects will begin in January 2026.

How Switzerland Evaluates DAC and JVZ Projects

Evaluations will consider multiple factors, with network expansion being the most critical. Every new addition to the railway network increases potential connections and loading points. However, small and even major rail freight companies like SBB Cargo do not always find it financially viable to invest in new access points.

To address this, the Swiss government will sign multi-year "performance-based" contracts with project leaders—primarily SBB Cargo, private operators, and other stakeholders. These contracts will include state subsidies, investment co-financing, or compensation to make rail transport more competitive against road freight. Each agreement will define the duration of state support (typically four years), service specifications, and price regulations. It will also enforce non-discriminatory access for third parties, ensuring fair competition in freight transport. The government hopes that, within two contract cycles, JVZ will become self-sufficient, making long-term state support unnecessary.

Switzerland’s Plan to Reduce Rail Freight Costs

To support JVZ, Switzerland plans to reduce access fees for rail freight terminals. Services at key marshalling yards such as Basel SBB RB, Buchs SG, Chiasso SM, Lausanne Triage, and Limmattal currently cost operators around 20 million CHF per year, with JVZ accounting for 80% of activity at these hubs. To encourage usage, the government proposes cutting shunting fees and infrastructure costs, reducing overall sector expenses by 10 million CHF annually. Lost infrastructure revenue would be fully compensated by the state.

Switzerland’s DAC Support Plan

A similar financial strategy will apply to DAC implementation. The government is moving away from the idea that DAC alone is a "business case" for freight operators. Instead, it acknowledges that migration to DAC will take time, with efficiency gains and cost savings appearing gradually. The Swiss government plans to finance DAC migration for about eight years. After this period, state funding will cease unless Europe-wide delays necessitate an extension.

Swiss DAC investment estimates are based on European DAC Delivery Programme (EDDP) figures and domestic inventory reports. The government has already mapped Switzerland’s fleet, requesting operators update vehicle data by March 31, 2022. Current estimates suggest the DAC migration program will cover 15,000 freight cars and 520 locomotives. The government intends to finance one-third of total DAC costs, allocating:

• 120 million CHF for wagons
• 40 million CHF for locomotives
• 20 million CHF for coordination, workshop, and engineering work

No Legal Changes Needed: DAC Investments Are Greenlit

The Swiss Parliament does not need to amend existing laws for DAC funding. Current regulations already allow state support for technical innovations in rail freight if they improve efficiency, reduce resource consumption, or accelerate the transition to new technical standards. While previous funding was limited to small-scale pilot projects, DAC implementation exceeds these parameters and requires new financial discussions. The full DAC budget will be handled through a separate credit framework, with government contributions outlined in future regulations.

The Swiss government sees fast-tracking DAC migration as a priority to create a network-wide effect, align with EU policies, and maintain interoperability. However, once market adoption reaches a critical threshold, DAC operations should become financially independent, eliminating the need for state support.

Sources:  www.fedlex.admin.ch, www.railfreight.com