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PARIS-In a move that could greatly alter the nation’s logistics business and open new opportunities for development of distribution centers, SNCF, France’s state-owned railway, will invest $1.5 billion in a plan to boost market share for its freight operations. The plan is the first step in an $11.8 billion effort to boost rail’s market share to 25% by 2022 from its current level of 14%.

The plan includes programs to sharply increase container traffic and offer high speed express services that will enable the railroad to better compete with air and truck freight alternatives. The programs will entail redesign of SNCF’s freight business, investment in new truck shuttle trains and increasing international services. SNCF chief executive Guillaume Pepy says the changes will make logistics one of France’s greatest assets. The company, which is expected to lose $885 million this year on top of $2.8 billion from 2003-08, saw its share of the nation’s freight market plunge to 14% last year from 22% in 1996. The market is Europe’s second largest.

Significantly for industrial property owners, the plan will also put greater focus on port traffic and transfer some freight operations to quasi-private subsidiaries with greater flexibility. The railroad plans to double the number of containers it carries to and from Le Havre and Marseilles, France’s largest container ports. Trucks currently handle the greatest share of the container traffic.

The company also will use its high-speed passenger network to increase its share of the express package delivery service. The goal is to divert the equivalent of 100,000 truckloads and 1,000 planeloads to rail. SNCF will phase in four rail/truck shuttles that will be capable of providing 50 daily runs and carrying the equivalent of 500,000 truckloads a year by 2020.

SNCF will also attempt to rationalize its single-wagon business. The sector accounts for about 6% of revenue but 65% of losses. It will offer new services to regular shippers and discourage customers from using rail only or primarily as a backup for trucking.

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