News / DB Cargo pulls the plug as energy costs signal red for electrified rail freight

Photo: DB Cargo

Escalating energy costs are holding back electrification of European rail freight, which supply chain insiders warned could force more freight back onto roads.

On Monday, UK operator DB Cargo mothballed its fleet of 24 electric locomotives, CEO Andrea Rossi informing colleagues the decision was based on the “current economic climate”.

He told them: “It simply doesn’t make sense incurring additional cost of running and maintaining the Class 90s when we have an alternative fleet of Class 66 locomotives at our disposal.”

Rail Freight Group (RFG) assistant policy manager Phil Smart drew comparisons between the decision and that of Freightliner, which in 2021 temporarily suspended its electric fleet due to high electricity prices.

However, reports suggest DB Cargo’s decision is a permanent move.

Mr Smart told The Loadstar: “I think everyone in rail freight is frustrated at the pace of electrification, but can empathise with DB Cargo because when energy prices spike, long-term contract rates will go up, which means operators feel this far more suddenly than consumers.

“For those wavering on [using] rail, there is a mantra to repeat, which is that even diesel locomotives are four times less-polluting than road haulage.”

Indeed, RFG figures note that rail emits just 24% of the carbon emitted by road haulage carrying the same volumes, with the latter bringing additional environmental impact with brake and tyre residue.

However, with rail freight, UK operators have to contend with more restrictive loading gauges than their European counterparts, and Mr Smart says there is a need for a sector-wide overhaul.

“Putting wires up is just 20% of the cost; you also have to consider the issues surrounding overhead clearance when it comes to tunnels and bridges. But we have seen an increase in joined-up thinking on this front,” he added.

Nor is the UK alone in its struggle to electrify. While the European average between 2010 and 2020 was a 4% increase in electrified tracks, Germany’s increase was just 2%.

Secretary general of the European Shippers Council Godfried Smit told The Loadstar: “If network operators stop electrification, the business case for shifting to rail will diminish, even a slowdown could have a serious impact on the mode’s attractiveness.

“Rail is seldom chosen just for cost. For shippers it is always a combination of quality, cost, sustainability. My plea would be not to compromise on the sustainable profile of rail.”

Even if shippers consider sustainability when booking, figures show movements by rail, in Europe at least, have stagnated. Rail accounts for 19% of freight movements – as it has for the past decade. And sources say governments’ unwillingness to intervene in the market was wise.

Mr Smart said: “If forced to use electricity, rail operators will have to raise their rates, which will only go to make road more attractive.

“Given rail’s underlying green benefits, any sort of mandate that dissuades shippers from using it only hinders the green agenda. And to ask ‘what about electric HGVs?’ – the technology simply isn’t there, it’s an industry in its infancy.”