Is Spain’s Rail Network Being Privatized? MSC’s Deal Cuts 1000 Jobs?

MSC and Spain’s national rail operator Renfe have moved closer to forming a joint venture to manage the majority of Spain’s rail freight operations. While earlier proposals involved MSC acquiring a 50% stake in Renfe’s freight subsidiary, the revised plan centers on a 50-50 partnership. This new entity will integrate most of Renfe’s freight employees and handle the bulk of their freight services, with Renfe Mercancías retaining a smaller operation for specific strategic needs. MSC’s logistics subsidiary, Medlog, will play a key role, with its rail freight unit, Medway, overseeing the day-to-day management of the joint venture. This development marks a significant step towards restructuring Spain’s rail freight sector after Renfe Mercancías incurred substantial losses over the past decade.

CONTENTS:

MSC may privatize Spanish rail freight.

MSC-Renfe JV for most freight, Renfe retains some.

Is Spain’s Rail Network Being Privatized? MSC’s Deal Cuts 1000 Jobs?

MSC may privatize Spanish rail freight.

Is Spain’s Rail Network Being Privatized?  MSC’s potential partial takeover of Spain’s national rail freight operation, Renfe, seems to be moving forward, with reports indicating a non-binding agreement has been signed.

In September 2023, it was revealed that MSC was interested in acquiring a 50% stake in Renfe Group’s struggling freight arm, Renfe Mercancías, with Maersk and CMA CGM also shortlisted in an international tender. However, recent reports suggest a revised plan, with news of an agreement between MSC and Renfe to establish a 50-50 joint venture.

Spanish media reports indicate that this venture would manage the majority of freight services, while Renfe Mercancías would maintain a smaller operation with a reduced fleet, focused on “strategic transport needs.”

Details of how the venture will operate remain unclear, but initially, MSC’s logistics arm, Medlog, was expected to lead the acquisition. If reports are correct, Medlog could oversee the venture through its rail freight unit, Medway, with the majority of Renfe’s workforce likely to remain employed.

This marks a shift from Renfe’s September 2023 statement that guaranteed the jobs of its 945 freight staff, who could either join the new venture or find roles elsewhere in Renfe Group.

Despite these assurances, unions have raised concerns, warning that the deal could lead to job cuts, and that the involvement of Medlog might effectively represent the “privatisation in disguise” of Spain’s largest rail freight operator.

Is Spain’s Rail Network Being Privatized?  MSC and Spain’s national rail operator Renfe have taken a significant step toward creating a joint venture, moving beyond earlier reports of MSC acquiring a 50% stake in Renfe’s freight subsidiary. Instead, the two companies have reached a non-binding agreement, with plans for a binding contract to follow.

Under this agreement, MSC’s subsidiary, Medlog, will partner with Renfe to form a joint venture, with each party holding a 50% stake. This new entity will handle most of Renfe’s freight operations. Medlog’s subsidiary, Medway, is set to oversee the day-to-day management of the joint venture.

Renfe has been seeking a new structure for its freight division after its cargo arm, Renfe Mercancías, suffered a loss of 360 million euros over the past decade. As part of the agreement, Renfe has guaranteed job security for most of its freight employees, who will be integrated into the joint venture.

Renfe Mercancías will continue to operate but on a reduced scale, retaining some equipment for strategic transportation needs while transferring its steel, intermodal, and multi-product services to the new joint venture.