German industry berates Deutsche Bahn over rail freight problems

Representatives of Europe’s biggest logistics companies have hit out at “systematic” problems at Deutsche Bahn, whose freight business has become so unreliable that German manufacturers are having to use trucks to transport key supplies instead.

Volkswagen and steelmaker Saarstahl are among those who have been affected by disruption at the state-owned railway operator, the companies said, worsening the supply chain problems already affecting industrial production in the country.

According to Deutsche Bahn’s half-year report, only 71 per cent of freight trains in Germany were on time between January and June, compared to 80 per cent a year earlier. Over the past weeks, widespread engineering works, combined with driver shortages and rolling stock and ageing track infrastructure, have brought freight transport in Germany almost to a halt, people familiar with the matter told the Financial Times.

In an attempt to handle the rising congestion, Deutsche Bahn has prioritised passenger trains over freight.

The company said it was in a “close, solution-oriented exchange with rail freight customers in order to find individual solutions for all sectors”.

The escalating problems add to the challenges facing the new German government, which wants to increase rail from 18 to 25 per cent of all freight transport by 2030 and to double passenger numbers, as part of efforts to fight climate change.

Manufacturers rely on freight trains particularly to transport commodities like coal, iron ore, and sheet metal steel.

Deutsche Bahn’s heavily loss making freight unit accounted for a tenth of overall group revenue of €21.8bn in the first half of the year and was responsible for a fifth of operating losses of €975m.

The current congestion and delays have been most acute in the state of North Rhine-Westphalia and along the Rhine Valley, in particular around the Duisburg area, which is home to the continent’s largest steelworks, run by Thyssenkrupp, the Network of European Railways said.

The lobby group, which represents dozens of European logistics companies, cited a recent example where freight trains were delayed by close to eight hours between the Dutch city of Venlo and the south-German city of Kehl.

NEE said that management at DB Netz, the subsidiary that manages rail infrastructure, were responsible for a “de facto systematic restriction” of the network.

In a letter sent last month to DB Netz and Germany’s transport minister, seen by the Financial Times, NEE said management was in danger of causing “lasting damage to confidence” in rail freight.

“As the central infrastructure service provider in the value chain, DB Netz is currently causing freight railways an extraordinary number of problems . . . which require rapid and sustained action on the part of the company’s top management,” the letter said.

“Nothing less than the functioning of large parts of national and especially cross-border freight transport by rail is at stake,” it added.

It claimed that for five days in recent weeks, train path bookings at DB Netz had to be sent by fax because of understaffing and technology problems.

Leading German business lobby, the BDI, held an unscheduled meeting this week to discuss the rail freight bottlenecks.

The new government has also said it will quiz Deutsche Bahn’s executive board over fraud allegations related to the €8.2bn construction of a new station in Stuttgart.

The project has been overseen since 2017 by Angela Merkel’s former chief of staff, Ronald Pofalla, who is now a Deutsche Bahn executive and the head of DB Netz’s supervisory board.