DB Cargo Chief Highlights Unsustainable Losses in Freight Operations

The ongoing challenges faced by DB Cargo, the freight subsidiary of Deutsche Bahn, have raised serious concerns regarding the sustainability of its single wagonload service. According to Sigrid Nikutta, the company's management is considering discontinuing this service if it does not receive adequate financial support from the government.

DB Cargo, which predominantly handles freight in Germany, has been grappling with significant financial losses associated with its single wagonload operations. This service is critical for various industries, including steel, chemicals, and construction, as it allows for the direct pickup of individual wagons from client locations. However, experts question the viability of maintaining this service under current economic conditions.

Nikutta emphasized that DB Cargo cannot afford to keep operating a service that consistently generates losses. She noted that the company has clear directives from regulators in both Germany and the European Union to become profitable. As a response to these pressures, discussions are currently underway regarding the potential for increased funding to support the single wagonload service.

In recent years, DB Cargo has faced mounting difficulties, including a directive to eliminate 5,000 jobs by 2029 and a requirement to achieve profitability by 2026, as mandated by the European Commission. In 2024, the company's losses exceeded expectations, amounting to over EUR350 million. Nikutta aims to reduce losses to a manageable level in the current year.

The company's situation is exacerbated by a slowdown in economic activity, which has resulted in a 10 to 15 percent decline in transport volume compared to the previous year. Nikutta acknowledged that current market conditions, including anticipated tariffs from the United States, could further impact exports and, consequently, DB Cargo's operations.

While the company strives to implement a new organizational structure aimed at improving efficiency, it remains under the scrutiny of the European Commission. Non-compliance with financial regulations could lead to severe repercussions, including restructuring mandates or repayment obligations.

As DB Cargo navigates these turbulent waters, the future of the single wagonload service hangs in the balance, contingent on securing the necessary financial backing to sustain its operations.