IRJ: DB Cargo cuts freight activities in profitability drive

DB Cargo, which made a loss of €183m in 2015, is currently trying to reduce costs as it attempts to return to profitability and growth. DB Cargo says the 215 locations only generate around 0.4% of its turnover and are not therefore worth serving. It is possible that some will be served by some of Germany’s many small short-line style operators as has happened in the past when DB has ceased serving freight customers.DB Cargo has set itself a target of growing at 1% faster than the overall market per year from 2018, and says it also needs to “enormously improve” both productivity and quality.DB reported in March an overall loss of €1.3bn – its first loss since 2003 – despite a 1.9% overall increase in group revenues to €40.5bn. The underlying cause was the poor performance of its rail freight business, especially in Germany. Despite a 1.4% overall increase in freight tonne-km in Germany during 2015, DB Cargo suffered a 4.3% drop in tonne-km to 98 billion and saw its freight revenue drop by 8-10%.DB has previously admitted that many of its customers switched to competitors during the series of strikes in 2014-15 and have now signed long-term contracts with those operators. DB says that the strikes cost it €360m in total revenue and €300m in overall Ebit profit.”