2024-09-13 13:49:32
The railway is short of money and is now selling its only profitable division. The board can no longer hide behind the profits. This represents an opportunity.
The railway is in crisis: staff shortages, delays, dissatisfied customers and hardly any profits. Only DB Schenker has recently been in the black. Now the group has sold its logistics subsidiary to Danish competitor DSV for 14.3 billion euros. You can read more details about the sale here.
The fact that Deutsche Bahn is divesting itself of this business area seems counterintuitive. Why sell off the only profitable part? But the sale could actually mark a turning point and offer an opportunity. However, it remains to be seen whether the board and politicians will use this opportunity to save the company and implement urgently needed restructuring measures. Time is running out.
The days when the management could hide behind the overall figures boosted by Schenker are now over. The logistics division, which generates a large part of its money abroad and with a high proportion of road, air and sea freight, has been frequently criticized. It is accused of obscuring the view of the German core business. Conversely, the current situation offers the opportunity to shift the focus to rail.
It’s not just money that’s a problem. In the first half of the year, only 62.7 percent of long-distance trains were on time. The company then reluctantly abandoned its annual target of over 70 percent punctuality. The plan is to achieve 80 percent in three years.
To achieve this, action must be taken in many areas of the company. Anyone who has travelled by train recently will already be familiar with a whole potpourri of explanations for delays: broken switches, signalling problems, absences due to illness, staff shortages, delays of trains ahead. Customer satisfaction and – as the last waves of strikes have shown – employee motivation suffer as a result.
Transport Minister Volker Wissing has signaled that he is aware of this, and the traffic light coalition supports the Schenker sale. At the same time, in August Wissing said that the comprehensive renovation plans, some of which involve months of closures, were going “really well.” The fact that these major projects are so necessary and cannot be carried out during ongoing operations shows how much has been left undone in recent years.
In the meantime, Wissing himself has expressed doubts and announced that he wants to take tougher action at Deutsche Bahn in the future. So there is at least some understanding. Deutsche Bahn’s board has reacted to the clear words and drawn up a restructuring plan that is to be presented next week. According to a report in the “Süddeutsche Zeitung”, the plan self-critically describes Deutsche Bahn’s problems; however, how the ambitious goals are to be achieved remains uncertain. But the most concrete solutions are needed to get the ailing state-owned company back on the right track.
One thing is clear: In order to make the rail network, trains and stations fit for the future, further investment is needed and there is an enormous backlog. Politicians must solve this problem: faster approvals and less bureaucracy would be a start. Only then can the railways move forward profitably after the Schenker sale, instead of heading down a dead end.