European rail freight companies unite against DB Netz’s cancellation fees
Seven of the largest rail freight companies in Europe are jointly asking German infrastructure manager DB Netz to review their cancellation fee that will be applied in 2024. The companies are Rail Cargo Group, SBB Cargo, SBB Cargo International, Metrans, Lineas, CFL Cargo, and BLS Cargo.
More specifically, the parties are calling for the “mandatory review of reasons for cancellation by DB Netz AG and adjustment of market-compatible cancellation fees”. As a possible solution, they are suggesting that these fees should be based on the total volumes moved by each Railway Undertaking. Multiple representatives from DB Netz were contacted about the reasoning behind the new fee and their next steps in response to the letter, but no answer has been received as of yet.
Under the current scheme, companies that cancelled train paths had to pay a minimum fee of 0,05 euro/path kilometre, with a cap set at 491 euros. The new rule, on the other hand, entails that companies have to pay a much higher fee for all cancellations from 30 November 2023 “for the following timetable year for each cancelled individual train path”. The issue of cancellation fees in Europe was also recently addressed by the European Rail Freight Association, which said they could make the rail freight sector less flexible and predictable.
The new cancellation fee is more expensive and more disruptive
The main issues with the cancellation fee for 2024 planned by DB Netz brought up in the joint letter are various. First, the fee is increasing by 600 per cent, from 0,05 euro/path kilometre to 0,30 euro/path kilometre. Moreover, the signatories find that this initiative shows “strong discrimination against the rail freight sector”. This is because companies offering passenger services only have to pay a 2 per cent cancellation fee, whereas road freight companies do not pay any cancellation fee at all.
Moreover, this new cancellation fee is also likely to disrupt rail freight operations, according to the signatories. Regular train paths in Germany, as they explained, have to be booked in April. However, it is unrealistic to expect that all these bookings will go exactly as planned due to volumes, destination markets, and routes changing. With the new cancellation fee, companies will have to pay the penalty in all these cases. Other disruptions could come from the fact that companies would start booking significantly more short-term orders, making the planning system even more unstable than it currently is.
In addition, cancelling train paths after their scheduled departure has become more expensive than actually running a train, as was mentioned in the letter. There also seems to be a discrepancy when it comes to consequences for cancelling a train path. As the signatories pointed out, DB Netz is not obligated to compensate RUs when the cancellation comes from them. Finally, “the new cancellation regulations do not provide for any special consideration of extraordinary reasons for cancellation that are beyond the RU’s control”, as the letter underlined.