© DB Schenker

Record profits at DB Schenker have brought the debate over the future of Deutsche Bahn’s (DB) logistics arm into sharp relief again: spin-off, sale, or re-evaluated as a strategic asset within the German state railway utility group ?

At a press conference today, as Deutsche Bahn presented its 2021 annual results, Levin Holle, board member for finance and logistics, gave little away.

“DB Schenker was extremely successful once again. In uncertain times, Schenker kept its customers’ supply chains stable around the globe. And that had financial benefits. Now facing its 150th anniversary as a company, Schenker has delivered excellent results – record revenues of over €23bn for 2021, record profits and a pioneering strategy to further improve its competitive position.”

He continued: “It is certainly true that special circumstances in the air and ocean freight markets were part of the reason for Schenker’s enormous profit increase of more than 75% to €1.2bn ($1.3bn). But DB Schenker’s management also made a number of very sound decisions in the face of great uncertainty.

“For example, they decided to set up their own charter network in the air freight market. They also decided to expand climate-friendly, biofuel-based transport options. And they worked tirelessly to take each of their business segments to the next level. That put DB Schenker in an excellent position for sustained growth.”

Buoyed by the record financial performance in 2021, the question is where does DB Schenker go from here?

Will its exceptional profits last year be available for M&A or re-investing? Or instead, will the company be viewed as a timely ‘golden egg’ by its parent, re-evaluated as a strategic asset, with a good part of its profits going towards subsidising DB’s rail services?

It is understood that these options are being debated at federal government level, and only time will tell but if the latter option is pursued. It would, arguably, put DB Schenker on the back foot and risk increasing the gap between it and the ‘Big Three’, DHL GF, Kuehne + Nagel and DSV, in the sector.

DB Schenker’s 2021 ebit (operating profit) of just €1.2bn compares with almost €2.88bn last year at  K+N, while DP DHL GF’s freight division more than doubled its ebit to €1.3bn and DSV’s €2.1bn.

DB Schenker handled almost 1.44m tonnes of air cargo last year and just over 2m teu.

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