Major cuts and job losses could be on the cards at DB Cargo

Deutsche Bahn (DB) is considering severe cuts to its DB Cargo division, according to German media.

Reuters in Germany said cuts in the loss-making division could mean the loss of 3,000 jobs – said to be up to half the German workforce – in the next 10 years.

DB has reportedly hired consultancy firms Oliver Wyman and SCI-Verkehr to draw up new plans for the division. 

Leaked to the media, these mainly concern the car transport unit. But the cuts could also force DB Cargo to withdraw from rail freight in northern and eastern Germany, say reports.  

One alternative envisages government subsidies keeping the division afloat, amounting to several billion euro in state aid, said the document. The freight division could also receive subsidies from the better-performing passenger division, as it has in recent years. 

DB Cargo said no definite decisions had yet been taken, and the ideas were only for discussion by politicians and DB.

The spokesperson told The Loadstar: “There are no resolutions on the proposed scenarios. Instead, the report is initially evaluated internally by DB and discussed with stakeholders. Therefore, none of the scenarios is actually part of the planning.”

None of the plans would be implemented soon, said Reuters. 

There has been no mention of the future for DB Cargo divisions elsewhere, including the UK.

DB Cargo – which has lost half its market share – made a loss of some €341m ($375m) last year, making a total loss of more than €1bn over the past five years. The loss this year is expected to be in the region of €300m. First half results showed DB Cargo’s revenue at €2.1bn, with a negative EBIT of €132m.

However, in an interim results statement, DB said: “Despite a challenging market environment in rail freight transport as well, DB Cargo stabilised its transport volumes, handling 43.7bn metric ton kilometres in the first half of 2019, a decrease of 1.8% year-on-year.”