SBB's freight arm is SBB Cargo AG, which has its headquarters in the northern border city of Basle, a "Euro-hub" handling traffic between Italy and Benelux, northern Germany and Scandinavia.

Although SBB Cargo carried nearly 54 million tonnes of freight in 2007, serious structural problems have prevented it from breaking even.

European expansion

In the past, SBB Cargo traditionally cooperated with other rail companies on cross-border freight transport. Today, it is a Europe-wide transport company, which uses its own locomotives to travel to and from Germany and Italy.
In June 2002, SBB Cargo set up a subsidiary in Germany, SBB Cargo Deutschland, to handle freight transport along the north-south transport route, i.e. from the North Sea ports and Germany to Italy, and back.

A mere six months later, it established another subsidiary, SBB Cargo Italia. Most raw materials are transported to Northern Italy for processing. From the densest industrial region in Europe, the finished goods head northwards via train. 

SBB Cargo agreed a further cross-border partnership in June 2007, this time with the French rail freight company FRET SNCF. Between them, they will transport freight between Mulhouse (eastern France) and the Swiss town of Buchs (on the Austrian border).

Competition

SBB Cargo is not only in competition with international companies like Trenitalia Cargo and DB Intermodal Logistic in Germany. It also has rivals much closer to home too, in particular BLS Cargo.

BLS Cargo, which chiefly operates along the Lötschberg-Simplon-Gotthard route, works closely with Deutsche Bahn to transport freight across the Alps. This strategic partnership allows the privately owned Swiss company to concentrate on alpine transit.

When the structural problems at SBB Cargo came to light, many politicians called for a merger between SBB Cargo and BLS Cargo, a proposition which was vehemently opposed by the latter.