DB Cargo, the freight operator of the Deutsche Bahn (DB) group, has announced a restructuring plan, dubbed “Transformation”. The aim is to optimise the company’s efficiency and competitiveness by reorganising its structure and redistributing its resources.
The aim is to reduce the losses that the business generates for the group, which over the last 10 years have amounted to some 4 billion euros. Although the final figure is not yet known, it is estimated that in 2023 alone it will have made a loss of 500 million euros.
Despite the poor results, between 2017 and 2022 the company has invested €1.7bn in acquiring new locomotives and wagons to make the service more efficient.
DB Cargo plans to ditch intermodal trains
DB Cargo’s strategy now involves delegating certain services, such as intermodal traffic, to its subsidiaries. This will allow the company to focus its efforts on other segments of the business.
Trade unions have expressed concern about the future of DB Cargo’s workers. According to their statements, up to 1,800 employees could be relocated to the company’s subsidiaries or, in the worst case, made redundant.
However, DB Cargo describes these statements as “irresponsible scaremongering”. Nevertheless, it acknowledges that staff transfers between the parent company and its subsidiaries are being planned.
Intermodal trains, which according to the unions account for 20 percent of the operator’s revenues, are the main candidates for transfer to the subsidiaries. Specifically, to TFG Transfracht and RBH Logistics, both owned by DB, and to Mitteldeutsche Eisenbahn (MEG), in which DB owns 80% of the shares.
DB Cargo plans to focus on either block trains (the whole train is from the same customer and makes the same route) or wagonload freight (from several customers, with different origins and destinations that require one or more shuntings on their route). Both account for 52% and 28% of the operator’s revenues respectively.
While the latter segment is not profitable, the company is to receive major financial support from the government as part of the plan to increase rail freight in Germany to 25% by 2030.
