DB-Cargo is undergoing restructuring, resulting in the elimination of approximately 2300 positions.
The logistics branch of Deutsche Bahn's freight division, DB Cargo, has been a topic of concern for the company for quite some time. After a lengthy dispute with the EVG union, an accord has been reached on a reorganization strategy. This involves the formation of new business units and the termination of over 2300 jobs.
The company has declared intentions to establish fresh business sectors to align better with client requirements. These segments encompass steel, automotive, chemicals and raw materials, as well as consumer goods.
Each business unit will operate independently, with its individual workforce, locomotives, and freight cars, the company stated further. This independence will extend to the responsibility for quality, transport performance, and financial outcomes.
Combined transport to remain in-house
However, there is no longer any mention of the proposed outsourcing of combined transport - such as container transport from seaports or terminals - to a corporate subsidiary. Instead, it has been declared that combined transport will continue under the DB Cargo banner. This was one of the major points of contention between the employer side and the works councils.
Nonetheless, the market environment for logistics remains challenging, as a company spokesperson noted. "We will respond to this and anticipate further significant adjustments," the spokesperson said. This could imply more job cuts, particularly in administrative roles.
Works council gives approval
The works council is said to have agreed to the reorganization plan. This signifies an end to months of disputes over the company's future.
"The approval was not straightforward for us," said Cosima Ingenschay, deputy chairwoman of the EVG and the Cargo supervisory board. "DB Cargo was driven into a difficult economic situation due to mismanagement and a lack of political support."
No operational layoffs are planned. Instead, a social plan and a voluntary departure program have been agreed upon, according to EVG. "That was also difficult, but given the current situation, a manageable decision," Ingenschay emphasized. With the agreed measures, the board now has all the necessary tools to steer the company towards a sustainable future.
DB Cargo has been in the red for years
DB Cargo boasts around 31,000 employees. The company has been reporting significant losses for years. Approximately 260 million euros in losses were recorded in the first half of this year alone.
Most of the losses occur in what's known as single wagon traffic. In this scenario, loads are picked up directly from industrial clients, and the wagons are then assembled into long trains on marshalling yards. At the destination station, the wagons are subsequently separated and transported individually.
Many experts deem an economically viable operation of this offer to be impossible. As a result, the federal government subsidizes single wagon traffic.
EU state aid proceedings ongoing
Meanwhile, an EU state aid proceeding is still ongoing. The authority has been investigating since the beginning of 2022 whether the loss compensation provided to DB Cargo by the state-owned railway company is permissible via a so-called result transfer agreement. It is already clear that the commission will prohibit this practice.
DB Cargo will thus need to finance itself independently in the future. It is also possible that the commission will order the outsourcing of specific Cargo business units within the framework of the proceedings.
The company's decision to focus on new business sectors, such as steel, automotive, chemicals, raw materials, and consumer goods, could potentially boost the overall economy by catering to various market demands. However, the continued financial struggles of DB Cargo, with significant losses in single wagon traffic and the potential for further job cuts, remain a concern for the company and the economy at large.
