Green Cargo Faces Operational and Financial Struggles Amid Climate Goals
Green Cargo reports ongoing losses and strategic service cuts amid financial pressures and climate targets.
Key Points
- • Green Cargo has faced losses nearly every year for a decade despite receiving state subsidies.
- • Operational stations have drastically decreased from 900 to 200 since 1989.
- • CEO Henrik Dahlin emphasizes the need for a sustainable business model without reliance on state support.
- • Call for reduced track fees and better environmental compensation to enhance competitiveness against road transport.
Green Cargo, a key player in Sweden's freight rail sector, is grappling with significant financial losses while striving to meet the country's climate ambitions. Over nearly a decade, the company has reported continuous losses despite receiving close to 2 billion SEK in state environmental subsidies intended to encourage a shift from road to rail freight. According to CEO Henrik Dahlin, the firm does not hold a societal obligation to maintain service across all of Sweden, prompting a strategic focus on key accounts in the basic industries like steel, ore, and timber for profitability.
Dahlin noted that Green Cargo has drastically cut back its operations, with the number of functioning stations shrinking from approximately 900 in 1989 to just 200 today—an 80% decrease. The company has also been compelled to reduce services on unprofitable routes due to competitive pressures and continues to face challenges related to pricing from rival transport services. He expressed concern that multiple adverse factors could lead the company towards bankruptcy, although these outcomes are avoidable by adhering to strategic plans.
The CEO highlighted a contradiction between Swedish and EU emission reduction goals, which advocate for increased rail freight, and the reality of rising road freight, calling it a "sad story" for society. He underscored the need for policy changes, including reduced track fees and enhanced environmental compensation, to foster a competitive environment favoring rail transport over road. While aiming for profitability independent of subsidies is a few years away, Dahlin remains committed to establishing a sustainable business model for Green Cargo.