The German government is scrambling to avert a potential insolvency for DB Cargo, the freight transport subsidiary of national rail operator Deutsche Bahn, amidst mounting financial pressures and an ultimatum from the European Commission. Transport Minister Patrick Schnieder, of the Christian Democratic Union (CDU), signaled a strong desire to maintain state involvement, expressing concern over a potential shift of freight traffic to road transport.
Schnieder emphasized the government’s intention to retain ownership stakes in DB Cargo, but stressed the necessity of a viable restructuring plan proposed by the company’s new management team. The EU Commission has stipulated that DB Cargo must achieve profitability by the end of next year, otherwise further state aid will be prohibited, effectively triggering insolvency proceedings.
While acknowledging the formidable challenge, Schnieder conveyed confidence in the new leadership’s ability to devise a solution. A potential avenue for intervention involves the provision of subsidies specifically geared towards the notoriously expensive “wagonload” transport model, a practice already implemented in other European nations. When questioned about the feasibility of this, Schnieder cautiously stated that “everything must be considered” underlining the overarching goal of establishing a “stable foundation” and a commercially viable DB Cargo.
The minister flagged existing commitments within the governing coalition agreement, which prioritize the development of rail freight towards a market-driven “hub-and-spoke” logistics system. This ambition, however, clashes with the immediate need to secure DB Cargo’s survival and raises questions about the government’s long-term strategy for rail freight. Critics argue that merely propping up loss-making operations with subsidies, even if EU-compliant, risks perpetuating structural inefficiencies and delaying necessary reforms within the broader rail network. The situation highlights a tension between political imperatives to maintain rail infrastructure and the economic realities of a struggling freight business, raising serious questions regarding the sustainability of Germany’s rail freight sector.