Should more freight be transported by rail

DB Cargo : Why freight transport is the largest construction site on the railway

A colorful initiative: With “Noah's Train”, Europe's freight railways are currently promoting more environmentally friendly freight transport by rail. In mid-December, the train painted by artists started from the World Climate Conference in Katowice, Poland, heading for Vienna, has just stopped in Berlin and is now heading for its destination Brussels via Paris via Paris until mid-February.

The advertising drive has a clear message: Politicians should set the course so that the rapidly growing freight traffic in Europe is shifted more to trains. The goal is to increase the share of freight railways from a meager 18 percent to at least 30 percent by 2030.

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So far, the vast majority of freight has rolled over the streets. And that with an upward trend and Europe-wide consequences: congested motorways, increased accident risks, high air and noise pollution. Truck transports are much more harmful to the climate than trains, but they are often faster, cheaper and more reliable. One reason for this: the years of mismanagement at the federally owned Deutsche Bahn AG, to which Europe's largest freight railway belongs.

DB Cargo has had problems since the financial crisis

DB Cargo AG is “not in good shape”, according to the internal “Agenda for a better railway” from CEO Richard Lutz. The DB top will have to report to Transport Minister Andreas Scheuer (CSU) for the third time on Wednesday. Because the entire highly indebted state company with its more than 300,000 employees worldwide is in crisis. With his agenda, Lutz wants to bring DB back to the front in passenger and freight transport by rail.

“We want to grow - and leave the bad years of the past behind us,” promises the top management in the 200-page strategy paper for the Supervisory Board, which is classified as strictly confidential. DB Cargo will benefit from the growing freight traffic in Europe and the inevitable shift to rail and will "write a successful growth story by 2030". The way will be exhausting, but there is "a real perspective for the future".

The documents also show how dramatic the situation is - and not just since yesterday. DB Cargo's economic situation has been “not sustainable” since the financial crisis, when the global economy collapsed. Since 2008, DB Cargo's market share in Germany has fallen from 79 to 52 percent (2017). Other freight railways operated more successfully and chased away many orders from the ex-monopoly. The losses were "above expectations", it is said self-critically.

The consequences are considerable. Since 2015, DB has made a loss of 555 million euros (EBIT) on its freight train, 200 million last year alone. Although freight traffic is growing rapidly, sales have also shrunk from 4.8 to 4.5 billion euros since 2013. In addition to low-margin businesses, “operational weaknesses” and “unstable production” are expressly named as causes of the misery.

There are too few train drivers

The decline of DB Cargo AG is seen as a blatant example of mismanagement by highly paid managers. Since 2008 alone there have been six restructuring concepts and more than 20 changes on the board, almost half in the most important area of ​​production. 4,000 jobs were cut, locomotives sold and wagons scrapped, and many loading bays closed. All of this “only accelerated the decline”, criticized the EVG union years ago.

Ex-railway boss Rüdiger Grube felt the anger of the employees. There were massive protests against his “Zukunft Bahn” red pencil concept that he had worked out with McKinsey. Cargo boss Jürgen Wilder was relieved and Grube finally threw down in exasperation. Since then, his successor, Lutz, has been trying to get Europe's largest rail freight company back on track with the former Daimler manager Roland Bosch.

That will not be easy. DB Cargo has lost many customers to more efficient private freight railways, and important clients from the steel and chemical industries have repeatedly criticized massive delivery problems at the state-owned company that even endangered production. The week-long closure of the central Rhine Valley route due to the DB Netze AG tunnel accident near Rastatt also put off many partners in the middle of 2017 and caused billions in damages.

It is clear that, as in passenger transport, there is a lack of staff and trains. The "burdened operational quality" at DB Cargo is mainly caused by "acute lack of resources", according to the confidential agenda of the DB management. According to this, almost 3,000 train transports did not take place by October 2018 because there were no train drivers. In addition, for the same reason, an average of 40 trains per day were idle and deliveries were delayed. The "personnel gap" is estimated at 130 train drivers, 330 shunters and 140 wagon masters. There is also a lack of locomotives and wagons to be able to complete orders.

Politicians share responsibility

Better quality and reliability are to be achieved with the acquisition of 100 new locomotives and 4000 freight wagons, more efficient organization and more staff. Across the group, DB plans to hire around 20,000 new employees in 2019 alone, although a similar number will retire. Orders from the automotive, ore and logistics industries are expected to increase freight turnover. There are to be additional transshipment terminals in Europe and the cooperation with China's state railway is to be expanded for even more transports to and from the Far East.

The top of the DB plans to invest 2.1 billion euros between 2018 and 2023 for the hoped-for turnaround at DB Cargo. In 2023, the freight railway is expected to make a profit of 340 million euros and increase sales by a third to six billion euros. Whether this will succeed is completely open. The previous goal of getting out of the red in freight traffic again in 2018 was missed by a long way. One reason why DB boss Lutz had to correct the operating profits of the tight state-owned company expected by 2023 by a total of almost 2.9 billion euros in the new medium-term planning.

From the community

In a word: The freight railway is still a digitization desert in 2019.

... writes user RVahrenkamp

This caused some displeasure, especially among the federal government as the owner. However, in the opinion of critics, the government bears some responsibility for the crisis of their largest corporation. Politicians have largely failed to strengthen rail freight transport in Europe for many years, the European Court of Auditors concluded in a 100-page special report in 2016.

Switzerland is seen as a role model

The shift targets announced since 1992 have repeatedly been missed, instead the share of rail in traffic in the internal market has even decreased further. The auditors criticize state-caused disadvantages of the freight railways compared to truck traffic, unnecessary bureaucracy and the provision of more money for the road than for the rail, among other things in Germany.

Switzerland was given as a shining example of how things can be done differently. Little has changed about that to this day. When “Noah's Train” arrived in Berlin, Cargo boss Bosch campaigned for a new start and better climate protection: “The traffic turnaround can only succeed if we get more goods on the rails.” Experts warn that beautiful words will not suffice see politics as an obligation.

For example, tolls and diesel taxes for trucks could be increased and the authorities could take stronger action against wage dumping, overloading and violations of driving and rest times in the freight forwarding industry. That alone would make the railways more attractive again - especially if the new start succeeds and the expansion of the railways is promoted as much in future as road traffic has been for decades.

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