DB Cargo gets hardest hit from car factory closures
DB Cargo has been hit hard by the corona pandemic. In March, the volumes had decreased by 25 per cent. Halfway April, it showed a 35 per cent decrease in volumes compared to the same period last year. The most important factor has been the shutdown of car factories; a core business for the German rail freight company.
In a webinar about the impact of COVID-19 on rail freight in Europe, Dirk Schade, expert of international railway operations and inhouse consultant of production quality at the company explained: the automotive industry is a customer for us on several fronts. We transport steel that is used in the manufacturing of cars. There is the transport of spare parts, and of course the transport of finished vehicles. The shutdown of these companies resulted in a significant drop of volumes.”
During the webinar, the company elaborated on its contingency plans that it has had in place since March. “It was already in January that we asked ourselves: should we prepared? We started monitoring the situation in China closely, and developed a worse-case scenario plan. In the beginning of March we started the task force corona protection response. It was the first and very strong response to the coronavirus. We centrally distributed masks, germicides, gloves etc. to all staff. This made sure that everyone had access to these materials.
At the same time, adjustments were made on the operational side. “In a time of crisis like the pandemic, single wagon load traffic could be reduced, just as the sidings. This is because the single wagon load segment requires a lot of effort, staff and manoeuvring. These are all risk factors with regards to the coronavirus”, the expert explains.
“We could also reduce maintenance activities. Although maintenance is mandatory, we do ask ourselves: is this really needed now? Or can we postpone it till summer, for example?” He added that measures such these are predefined solutions for irregular situations. “In the winter time, we have around 10-15 per cent less locomotive drivers due to influenza in Germany. We also anticipate accidents, deviations and construction works.
Single wagon load
Although single wagon load is one of the segments that requires more effort and staff, it is a business with growth potential too, as the volumes are relatively less impacted by crises. “DB Cargo is working on a more attractive offer and network concept in order to grow in single wagon traffic”, the Federal Ministry of Transport (BMVI) was cited on the German mediasite eurotransport.de last week.
“In order to be an ecological alternative to the road, single wagon traffic should be massively expanded – for example with faster connections or new industries such as consumer goods”, the Federal Government was quoted.
Moreover, export from China is currently witnessing an upswing. In April, the company reported to see pre-corona levels of at least export from China. In the other direction, volumes have been drastically reduced due to factory closures in Europe. “By the end of April, 70 trains will have traveled to and from China. In March, this number was 50 trains”, said DB Cargo chief Sigrid Nikutta to the German mediasite wiwo.de.