Deutsche Bahn to Stop Supporting DB Cargo? EU Investigation Threatens Freight Operator’s Future

Deutsche Bahn (DB) may cease supporting its subsidiary DB Cargo, which handles freight rail transport, in 2024, this is reported by the railway transport news portal Railway Supply.

This potential move is due to an investigation initiated by the European Union aimed at determining whether German assistance to DB Cargo has provided it with a competitive advantage in the market.

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According to information provided by Reuters, the EU is expected to make a decision in the coming months, which could require DB to abandon its profit and loss transfer agreement that has been in place since 2012.

Under this agreement, Deutsche Bahn covers the losses of its subsidiary.

In recent years, DB Cargo has lost a significant market share and now handles less than half of all rail freight transport in Germany.

As of 2023, the company’s losses amounted to around €500 million. The primary cause of these losses has been inefficient resource use in transporting small cargo batches consisting of several wagons, leading to high costs.

The EU investigation began in 2022 and aims to determine whether financial support from the German government has created unfair market conditions.

A German government representative commented that a key aspect of the investigation is the potential cancellation of the existing profit and loss transfer agreement between DB and DB Cargo.

The German Ministry of Transport has also highlighted the need to resolve the prolonged crisis related to the operator’s losses.

Deutsche Bahn has not yet provided an official comment on the investigation and the potential termination of agreements.

However, both the government and the railway company agree that the current situation with DB Cargo’s losses needs to be urgently addressed.

Brussels is considering possible measures if it is proven that the subsidies distorted market conditions. A final decision is expected in October.

As a result, DB Cargo’s future remains uncertain, and if the EU investigation proves that the support was inappropriate, it could lead to significant changes in the company’s structure or even its division.

In any case, the situation demands prompt and effective intervention to prevent further financial losses and stabilize the rail freight market in Germany.

Photo: DB Cargo

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