News / Calls to end 'market distortion' caused by government support for DB Cargo

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German rail operators have welcomed reports that, amid concerns of government support leading to market distortion, the EC is considering forcing a break-up of DB Cargo.

Sources told Reuters that, with losses at the beleaguered German state operator surpassing the half-billion euro mark, European authorities had become increasingly concerned that the government plugging its losses was anti-competitive.

A spokesperson for Die Gueterbahnen, which represents Germany’s private railroads, told The Loadstar DB Cargo only survived through “below-cost prices” subsidised by state financing.

The spokesperson said divesting DB Cargo’s rail freight services that competed with those of other operators would prove “a major step forward for fair competition in rail freight transport”.

But only if those services went to another operator, rather than a subsidiary of DB, a move that had been alluded to last year.

However, despite the strong government support for DB Cargo, the private sector has seemingly shown itself capable of contending, having secured market share of some 59% by 2022. Indeed, Die Gueterbahnen told The Loadstar the recent strikes at DB Cargo had not, despite reports, brought German rail freight to a standstill.

Meanwhile, European regulators have already begun assessing whether the German government’s involvement with DB Cargo was resulting in a market distortion akin to that in France, before the commission forced state-owned Fret SNCF to give up some of its best-performing routes.