New railway strategy may carry less obligation than initially anticipated
The railway crisis in Germany continues to escalate, with the freight sector particularly affected. According to reports, the transport volume could be up to 15% below target this year, and another quarter drop is expected in the coming months.
The main issue at hand is the single wagon traffic, a business model where individual goods wagons are transported for corporations. This model has been a significant contributor to the industry's struggles.
Under political pressure, DB Cargo's CEO, Sigrid Nikutta, has commissioned a new paper from consultants to address the crisis. However, a study commissioned by Nikutta earlier recommended largely phasing out this business model.
The strategy for addressing the crisis, which was conceptualised by the Ministry of Transport, has been scheduled for an extraordinary supervisory board meeting on October 31. The Federal Minister of Transport, Patrick Schnieder, has the responsibility to implement this strategy, including appointing Evelyn Palla as the new DB chief and enforcing organisational changes.
Despite the impending strategy, there are concerns about its piecemeal approach. Cosima Ingenschay, a board member of the union, has expressed her reservations, stating that the board is pursuing cuts without a clear understanding of where it is heading.
The management's reported disregard for efficiency gains in this regard has also raised eyebrows. Dirk Flege, managing director of the interest group Allianz pro Schiene, has stated that a concept without a cabinet decision would mean "a huge lack of commitment".
The future of DB Cargo is at risk, with auditors refusing to give an unrestricted audit opinion. As a result, DB Cargo plans to close ten workshop branches. The railway union EVG considers these closures unjustified without an overall concept.
In a bid to alleviate some of the workers' concerns, the EVG had promised concessions during restructuring, such as starting and ending employee shifts at the train, with travel time no longer counted as working time.
Transport Minister Patrick Schnieder is set to present the strategy for the ailing railway on Monday. The strategy, if approved, would require a cabinet decision by the entire federal government for its implementation.
As the railway industry grapples with this crisis, the focus remains on finding a solution that will stabilise the industry and ensure its long-term sustainability. The strategy unveiling on Monday is a significant step towards achieving that goal.
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