7 Apr 2010

Improving Green Cargo's locomotives

A new loan agreement between NIB and Swedish Green Cargo for investing in the upgrade of the rail freight company's locomotives also reveals a common commitment of the organisations to strengthening competitiveness and enhancing the environment.

"Green Cargo's mission is to increase our customers' competitiveness by offering efficient and environmentally friendly solutions and securing long-term deals with customers and suppliers. In NIB we have found a stable partner with the same long-term perspective and common mission to strengthen Sweden's competitiveness and create environmentally friendly conditions for growth. It's a perfect match," says Mats Hollander, Green Cargo's Director of Communications.

Half of Sweden's GDP is based on export and without access to effective and reliable transport Swedish businesses could not compete in the global market.

Engines of export

As harbours and freight transport act as the engines of the export industry their level of activity can be seen as meters of the well-being of a country's economy. In 2009, Green Cargo reduced their transport volumes by more than 20%—an indication of the downturn in the economy.

"We are now seeing an upward movement of trade across the transport sector; however, it will take a while before Green Cargo reaches the volume we had in the autumn of 2008," says Mr Hollander.

"Although the financial crisis hit some of our customers hard—the steel industry, for example, saw their transport volumes halved—Green Cargo made deals with 28 new customers that had never used railway transport before," Mr Hollander says, underlining that railway is the mode of transport for the future.

According to Mr Hollander, the increased awareness among customers of the environmental benefits of railway transport is an important factor in the record number of new customers.

"Particularly, companies within the trade sector that work in direct contact with consumers are eager to shift to climate friendly transport," he says.

On time all the time

Mr Hollander believes there is a second reason for the influx of new customers: Green Cargo's on time record.

"We set another record in 2009 when 95% of our trains ran according to schedule for the third consecutive year. After security, punctuality is the most important factor to us. It is by being punctual that we can be a real commercially competitive alternative to air and road transport," Mr Hollander explains.

With the help of NIB's EUR 30 million loan, Green Cargo has invested in the modernisation of 104 of the company's locomotives, a project that will help maintain the same high level of punctuality in the future.

"We had several locomotives that were more than 30 years old, and it would be a huge investment to replace all these with new locomotives. Customers do not worry about how the locomotives look; they want locomotives with high environmental standards that work. It was more economical for us to modernise the locomotives we had, which are adjusted to our geographical area and climate," Mr Hollander says.

The loan project will increase the locomotives working life by approximately 20 years at just one-third of the cost of comparable new locomotives. The overhaul will also improve the drivers' working environment.

"More than 90% of the goods we transport are carried on electrically powered trains. However, we do have some diesel locomotives and the modernisation includes these locomotives. The engines will be replaced and emissions of CO2 are expected to decrease by some 20% due to improved energy efficiency," Mr Hollander concludes.

Related resources

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NIB finances locomotives of a greener future