Business fears heavy costs from tunnel closure

Up to 5,000 commercial vehicles pass throught the Gotthard tunnel every day swissinfo.ch

With Europe's main north-south axis expected to remain closed for weeks, businesses are facing increased freight costs.

The Gotthard tunnel was closed on Wednesday after a collision sparked a fire, causing parts of the tunnel’s roof to collapse, and forcing the 5,000 trucks, which use the route daily, to seek alternative ways of moving goods between Italy and northern Europe.

“We have to assume that the Gotthard tunnel won’t be open for traffic for a long time, perhaps weeks,” said Reto Habermacher, police commander for the canton of Uri.

The tunnel carries the bulk of road freight through Switzerland, and has seen the number of vehicles increase significantly since a fire forced the closure of the Mont Blanc tunnel between France and Italy in 1999. At least 39 people were killed in that disaster.

Andreas Hoefert, an economist at UBS Warburg told swissinfo that the importance of the Gotthard as a route for European freight could not be underestimated.

“Switzerland takes around 20 per cent of the traffic from northern Europe to Italy, the rest being absorbed by France or Austria,” explained Huffert.

Primary Swiss transit route

“The Gotthard is the most important transit route on the road carrying almost 85 per cent of Swiss north-south transit. This represents almost 12 per cent of overall Alpine transit.”

Hoefert warned that the closure of the tunnel, which is used by around 18,000 vehicles a day, would increase costs for transport companies, and could even cause some of them to go out of business.

“It will certainly push costs up for those companies serving trans-Alpine transit as we have not many alternatives to this route. It will have more impact on cost pressures for these companies and some of them could go out of business as they can’t increase prices in this environment.”

However, he is optimistic that consumers will not be affected. “I’m not so sure that this will result in higher prices for consumers, as we are already facing recessionary risks here in Switzerland.

Weakening economy

Benny Kunz, managing director of the Chiasso office of the road-to-rail freight group, Hupac Intermodel, said the weakening economy would have a dampening effect on prices, which would offset any increase in freight costs.

“[Price hikes] didn’t happen with the closure of the Mont Blanc and I don’t think they’ll happen now after this incident in Switzerland,” said Kunz. “This happened during a time of slow down in the transport market so I don’t think it will have any effect.”

The tragic events of Wednesday have already had some political implications for the way goods are transported across Europe, according to Kunz.

Road to rail

“The question of transferring freight from road to rail will be more discussed,” explained Kunz. “This incident has had some consequences already as the European Union’s transport commissioner in Brussels is proposing to transfer more freight on to trains.”

The tunnel’s closure is also likely to affect the regional economy of Switzerland’s Italian-speaking canton of Ticino. Located in the extreme southeast of the country, the canton is cut off from the rest of Switzerland by the Alps.

“The Gotthard is absorbing more than 45 per cent of the transit to and from Ticino,” explained UBS Warburg’s Andreas Hoefert. “So the tunnel’s closure will affect links between this canton and the rest of Switzerland.”

by Tom O’Brien