New railway plan may carry less restrictive binding than initially anticipated
The future of DB Cargo, Germany's largest freight rail operator, is shrouded in uncertainty as the company grapples with a worsening crisis in the railway industry, particularly in the freight sector. The crisis has led to a delay in the supervisory board meeting, which was originally scheduled for last week, with an extraordinary meeting now set for October 31.
The crisis is expected to deepen this year, with transport volume decreasing by another quarter and being up to 15 percent below the plan in the freight sector. This grim forecast has prompted DB Cargo to announce plans to close ten workshop branches.
A study by consultancy firm Oliver Wyman recommends largely discontinuing single-wagon traffic, a move that has sparked controversy. The single-wagon traffic is identified as a main problem in the railway industry, but discontinuing it contradicts the federal government's climate policy.
The railway union EVG considers the closures unjustifiable without an overall concept. Cosima Ingenschay, a board member of the union, criticizes DB Cargo's piecemeal approach to cuts. Dirk Flege, managing director of the interest group Allianz pro Schiene, shares similar concerns, expressing worry that the strategic vacuum of the past may continue with the proposed strategy.
The proposed strategy, which Transport Minister Patrick Schnieder will present on Monday, is reported to be a concept from the Ministry of Transport, not the entire federal government. The strategy may not be as binding as hoped, according to a media report.
The new paper on the further development of DB Cargo and the deployment possibilities of single-wagon freight transport was requested by DB InfraGO in close coordination with the Federal Ministry of Transport and Digital Infrastructure (BMV) and the railway sector. The aim is to develop a viable and future-proof ETCS strategy, prioritizing technical and financial feasibility.
The crisis in the railway industry has put pressure on DB Cargo's CEO, Sigrid Nikutta, who has commissioned a new paper from the consultants due to political pressure. However, the EVG had promised concessions during the restructuring, including allowing employees to start and end work at the train, reducing travel time as non-working time. Yet, these concessions are not being implemented by management.
A cabinet decision by the entire federal government would be necessary for the implementation of the strategy. The delay in the supervisory board meeting and the ongoing controversies surrounding the proposed strategy suggest that the path forward for DB Cargo is far from clear.
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