MAKE WAY – FOR HEALTHY COMPETITION COMPETITOR REPORT RAILWAYS 2019/20
CAPACITY SHORTAGES AND REGULATORY IMPOTENCE
. Passenger transportation
MORE OPTIONS – FOCUS ON QUALITY
. Freight traffic
DIVERSE TRAINS DOMINATE
. Human Resources · Innovation · Data Management
PERSONNEL URGENTLY NEEDED EVERYWHERE
CONTENTS
2-11 Infrastructure CAPACITY SHORTAGES AND REGULATORY IMPOTENCE
12 -19 Passenger transportation MORE OPTIONS – FOCUS ON QUALITY
20 -27 Freight traffic DIVERSE TRAINS DOMINATE
28 -32 Human Resources · Innovation · Data Management PERSONNEL URGENTLY NEEDED EVERYWHERE
33 ABOUT US
FORWARD
DEAR READERS,
Politicians and a broad majority of the general public want more rail traffic. We need to significantly strengthen our railways in order to achieve our climate protection targets for transportation, increase transportation safety and reduce road traffic. This has already been verbally highlighted in party platforms, the coalition agreement of 2018 and the recent climate protection concept 2030. The stage is now set for the long-promised renaissance of the railway and we can begin to shift transportation away from roads and air travel.
And it’s high time. Rail transportation has indeed grown since the publication of the fifth “Competitor Report Railways” shortly after the federal elections in the autumn of 2017. However, the modal split shares have not changed significantly in passenger or freight transportation; overall economic growth momentum is likely to have been the main driver of rail growth. Improved rail services, road congestion and the new wave of environmental awareness have all contributed to this development. The majority of the intermodal competitive disadvantages of the railway continue to persist.
25 years after the railway reform, competition in local freight and passenger transportation on the railways remains largely fair. Long-distance traffic, on the other hand, continues to be almost completely dominated by the DB Group, whose infrastructure companies often make life unnecessarily difficult for all railway companies.
Dialogue between DB and the competitor railways has intensified, but everyday problems have only really diminished in just a few areas. We therefore believe that policies need to be implemented to reorganise the railway in the near future.
In the 6th “Competitor Report Railways 2019/20”, we have once again highlighted the competitive situation and analysed measures which could really strengthen the railway. The long version has been published on our website.
We hope you find the report enjoyable and insightful!
Ludolf Kerkeling Christian Schreyer CEO NEE e.V. President mofair e. V.
INFRASTRUCTURE
Infrastructure generates an increasing contribution to the profits of Deutsche Bahn AG.
The revenues of the DB as a whole come mostly from the infrastructure companies. In 2018, this highly regulated companies made up for more than 50 % of the total profit. In the first half 2019, it became a record 69 %.
INFRASTRUCTURE CAPACITY SHORTAGES AND REGULATORY IMPOTENCE
In contrast to road traffic, by far the largest share of the network is in the hands of the federal government; approximately 90% of the German rail network is managed by the network subsidiary of Deutsche Bahn AG, based in Frankfurt, as a “natural monopoly”. There is no competition between railway networks, but rather within the DB rail network between transport companies, which are simultaneously and above all in intermodal competition with private transport and road, air and sea transport companies for passengers and freight.
The previously ubiquitous the legislation has confirmed Federal Monopolies Commission systematic obstruction of access some dire predictions and has recommended, in its biennial to the rail network with the aim of shown a need for action so that sector report, “the favouring DB’s own transport the law can make a contribution implementation of an ownership- companies has become much towards the modal shift to rail. related, vertical separation less commonplace in recent Important fields of action include between the infrastructure and years. Nevertheless, the transport the system of train route pricing transport sectors of the DB Group companies are dissatisfied with and approval, criteria for and [...] the limitation of the the service and performance of scheduling and handling federal government’s ownership DB Netz AG in many respects. timetable conflicts as well as of the DB Group to the regulated They criticise the business policy information and application rights parts of the company.” In the or call on the Federal Network of the Federal Network Agency coalition agreement in 2018, the Agency to intervene. when dealing with the only truly government partners, particularly dominant network operator. The upon the instigation of the SPD, The regulatory authority has legal protection of those with stipulated that the privatisation of made good use of its very narrow access authorisation when the railways (meaning DB AG) scope as defined by the Railway dealing with the infrastructure was as out of the question as Regulation Act (ERegG), which operator must also be improved. splitting the “integrated group”. has been in force for three years. This categorical position has Under pressure from the DB Competing companies not within become the status quo. The Group, the federal government the DB Group continue to previous argument of preventing has guided the development of experience disadvantages redundancies due to business EU directives and their compared to the DB transport operations with an intra-group transposition into national law companies due to the informal labour market is irrelevant in view primarily in the interests of the coordination of the Group of the current staff shortages. An federation, but with minimal Executive Board and at the independent and more network- consideration of user and working level, the continuous oriented company management growth-friendly aspects. The rotation of executives, the lack of of infrastructure operators in fact political evaluation of the law as competitor railway makes more sense for the railway agreed in the Coalition representatives in supervisory system. At the same time, Agreement of 2018 has not yet bodies as well as the sheer size of transport service provider been tackled by the Federal the group and the special competition between DB Ministry of Transport and, attention that the federal companies and other companies according to experts, is not likely government gives its “own” would become fairer if there were to result in any significant company. no longer any systematic proposals for changes if it is advantages for DB Group carried out by the Ministry of Infrastructure as a service companies. Furthermore, there is Transport itself. However, from provider for rail transport? simply no need for public the perspective of the competitor transport companies. In a first railways, initial experience with In the summer of 2019, the step, the rail transport companies which are bundled within the DB
Group and which currently threshold (2009: 50.3%). The at the “Construction Site compete with each other could value was just 45.6% in 2017, 38% Management Round Table”, in be opened up to further, in 2008 and only 18% in 2004. technical discussions and, since sustainably oriented investors. the summer of 2019, also at the Secure and environmentally The resulting excessively high newly established “Capacity sound capital investments are in train route prices made it Round Table”. However, high demand, particularly in the possible, for example, for DB Netz substantial progress takes time. areas of fixed-income and AG’s profits to increase from EUR The concern is that railway pension funds. 119 million in 2017 to EUR 509 operations which, according to million in 2018. DB the intentions of politicians, are There can be no going back to Station&Service posted a profit of expected to provide significantly organisation within an authority EUR 176 million in 2016, EUR 186 increased transport services, will for the competitive and growth- million in 2017, with a slight suffer for many years from the oriented operation of the rail increase in 2018 at EUR 190 consequences of the improperly infrastructure. However, the million. Following a EUR 35 million dimensioned infrastructure. It is newly founded surplus in 2016, DB Energie therefore all the more important Bundesautobahngesellschaft closed the year 2017 with a profit that the implementation of all GmbH gives a hint as to how this of EUR 59 million before reporting capacity-increasing measures be type of task can be organised – a significant decline to EUR 12 tackled in parallel and that a namely profit-free, as expected million in income after tax in simple financing and planning by citizens and the economy and 2018. solution be found for smaller in contrast to the approach taken measures such as additional by DB infrastructure companies. Bottlenecks reflect many years of switches. Other forms of organisation are missed expansion opportunities conceivable, but due to In the 25th year after the railway categorical resistance from DB There has also been only a reform, there is a wide range of and some politicians, these have moderate increase in average estimations: while DB AG and the not even been assessed using a capacity utilisation in the federal government celebrated scientific systematic comparison previous two years. According to the modernisation, traffic growth under the current conditions. The DB Netz AG, total operating and debt relief of the railways, federal government also benefits revenue increased by 0.6% in the German Federal Court of from the current situation in 2017 and by 1.1% in 2018, Auditors insisted that almost all various ways. First of all, it draws whereby freight traffic grew at of the objectives associated with contributions from the rail the strongest rate at 3.4%, the railway reform had been transport market with respect to followed by long-distance missed – in particular shifting the user charges of the railway transport at 2.8% and local transport to rail. Trade unions and network users, which are used to passenger transport at 0.9%, the associations of the partially finance state calculated over both years. competitor railways pointed out infrastructure responsibility. The that the federal government had “railway financing loop”, which is The number and length of the – never made progress with its unique in the transport sector officially recognised – commitments to modernise the and disadvantageous to the “overburdened railways” has infrastructure with the railway, especially when increased significantly, investment funds allocated for competing with road and water conspicuously in precisely those this purpose. The regularly transportation, channels the DB areas where long-delayed updated European country Group’s corporate profits into the expansion measures should have comparison of per capita financing of replacement been implemented. This is now investment in the rail network investments in the existing taking a toll. This is compounded shows that Germany continues to network. DB profits are mainly by the many years in which rank in the lower midfield. The derived from the surpluses of the infrastructure components have decelerating revitalisation of the infrastructure companies, which been dismantled, with the infrastructure, including routes, are in turn stimulated by law and consequence of poor flexibility in switches, passing tracks and political supervision or the event of disruptions and sidings, has continued in recent intervention to achieve surpluses. necessary construction years, so that despite some In 2018, the share of measures. Short-term commissioning the route network infrastructure companies in the infrastructural, scheduling and is still shrinking. For example, EBIT of the entire group once planning measures have been almost 350 switches were lost in again exceeded the 50% discussed since the end of 2016 2017, thereby reducing flexibility
in terms of operating costs, in the infrastructure has continued over up agreement, which was event of breakdowns as well as the past two years. During the negotiated in the spring of 2019, during temporary removals from term of the Performance and will be valid for a total of ten service. Financing Agreement (LuFV) II, years, thus significantly the average age of existing increasing planning security and No traffic transition without facilities as an indicator of the creating efficiency potential for inventory network m odernisation degree of modernisation has the planning and implementation and expansion continued to increase despite of construction activities. increased investment from the However, the astronomically high Despite ambitious LuFV II between the federal amount of around EUR 86.2 announcements in party government and DB, partially due billion which has been manifestos, the coalition to increased construction costs announced is not only due to the agreement and political and partly due to necessary fact that this is a long period: the contributions, the state’s corrections to the site directories. provision of around EUR 23 billion emaciation of the rail Many bridges appear to be much for non-modernisation older than expected. The follow- “maintenance costs” also distorts
OPERATION Despite some commissioning, the route network which has LENGTH shrunk since 1994 has not been growing IN KM
The graphic shows the predicament by way of an example Not one line on the Berlin S -Bahn is unaffected by reconstruction measures
the picture when compared to government, which is responsible Deutsche Bahn AG’s “own previous figures. In the same way for constitutional infrastructure, contribution” of the total amount as the network operation, increased its original annual which it needs to raise is around maintenance is covered by train contribution in 2020 by a good EUR 9 billion without including route price proceeds and thus by EUR 1.1 billion (or around a third) maintenance funds. In concrete the rail transport companies. compared to 2019, and is not terms, “own contribution” means Describing these funds as DB’s committed to another one-off that the users of the railway “own resources” is both increase of EUR 700 million or infrastructure would need to pay confusing and euphemistic. 15% until 2025. The volume will this part themselves through Likewise, EUR 3.85 billion from therefore increase noticeably increased infrastructure usage the “requirement plan premise” over time. It is still unclear fees (train route and station should only be generously whether the sums are sufficient prices, terminal fees, transfer allocated to the task of to reduce the backlog of tariffs in the traction current modernising the existing network maintenance in light of the network), as the “own for its continued operation. After number of projects, the age of contribution” is made up of all, these are funds that are the facilities and, above all, the dividends amounting to EUR 6.75 provided on the basis of planned increase in construction costs. billion euros and other new and expansion projects by Two reports, commissioned unspecified funds, the existence removing the funds from another independently by the DB and the of which and future ability to government pot (requirement federal government and which generate income for DB AG is plan/Federal Railways are reported to have determined highly doubtful. A deficiency of Development Act). higher overall funding this amount would in all likelihood requirements, have not been lead to the abandonment of It is a fact that under the new published. However, it is necessary modernisation agreement, the federal particularly problematic that measures. Furthermore, the
funds for the regional networks, LuFV III now provides for EUR 80 inevitably lead to the following where competing railways are far million in federal resources and trains being late and sometimes more common than average, EUR 20 million in DB’s “own cause further delays in a remain practically at the same resources” per annum from 2022 snowball effect, especially in level when adjusted for the onwards to this end. This will busy network sections. In increase in construction costs cover the additional costs of addition to the backlog in the (EUR 2.8 billion over ten years more complex construction maintenance of forest stands instead of the previous EUR 1.1 methods, which mean fewer along the tracks which are at risk billion over five years). As a result, restrictions for travellers and of storm damage and routes important for the tourist freight. infrastructure-related disruptions industry, which would often also such as switch and signal be considered as diverting routes, There has also been a long malfunctions, the high number of will be systematically struggle for a statutory financial vehicle and maintenance-related underfunded. incentive system for both delays of long-running long- transport and infrastructure distance trains, which also tend Long -term nuisance of companies to reduce disruption to be given priority in the network construction sites and increase capacity. While this in the event of a disruption, play a was largely achieved by mutual significant role for the The rail transport companies agreement on 1 June 2019 in continuously poor punctuality have directly criticised the passenger transport, no situation. Staff shortages in network operator about the fact agreement has yet been reached maintenance is often the true that, in view of the growing regarding freight transport. The cause of what eventually number of construction sites, the particularly important increase in hampers train traffic as a lack of coordination and construction planning efficiency technical failure. efficiency have unnecessarily and improved coordination and hindered continued operation. communication with the railway In addition to the newly designed This often leads to annoyance companies will not be incentive systems, the liability of and concerns about losing implemented until 2019 and is still the infrastructure operators must passengers and shipping agents. being prepared by DB Netz AG. be improved with regard to Furthermore, many public damages incurred by the railway Within the framework of the transport operators in regional rail transportation company and, “Construction Site Management transport have not implemented where applicable, also its Round Table”, which brought DB the redistribution of risks from customers due to insufficient Netz, the railway companies, the construction sites between them service. In its sector report German Federal Network Agency and the rail transport companies submitted in 2019, the and the Federal Ministry of in the transport contracts, as had Monopolies Commission Transport together, it was been proposed at the Round demanded liability based on the calculated that in 2016 alone, Table. originator’s liability for delays. construction sites would result in Above all, it is important that additional costs or reduced The competitor railways continue railway companies are no longer income for rail transport to have serious doubts as to allowed to bear the majority of companies amounting to EUR whether the most important the risk of failing infrastructure in 428 million per year. These costs causes of primary delays are such a heavily used network on are likely to have risen in the actually being sufficiently tackled the basis of the limited legal meantime. In its final report within DB. According to the latest liability, which is only enforceable presented in June 2018, the published “Infrastructure Status with high procedural risk. The Round Table essentially made and Development Report”, heavy burdens resulting from four suggestions. Firstly, infrastructure-related disruptions passenger rights, penalties for capacity-based construction have risen in both volume and operators and additional should be made possible with resolution time since a “low” in operating costs are weakening additional funds through the 2014; although case numbers the railway companies, which are LuFV III; for this purpose, it was have only risen by 4%, the already operating with low initially postulated that EUR 200 “disruption periods” have margins, above all in the highly million of additional federal funds increased significantly – by 31.2% competitive markets for goods per year would be required. The from 2012 to 2017. Primary delays and passenger transport.
INFRASTRUCTURE
New construction and expansion In recent years, the expansion of average, however, only 1.3 are not progressing the rail network has almost come kilometres of new railway lines – to a standstill. The highlights corresponding to one 150th of The federal government only include the central section of the the constructed road kilometres – provides about EUR 1.6 billion per connecting route between were put into operation each year for the construction and Munich and Berlin (VDE 8) from week during the same period. expansion of the rail network. The Erfurt to Ebensfeld near This is approximately the length much smaller country of Austria Bamberg, which was decided of the cycle path network in issued EUR 1.3 billion for this upon 28 years ago and was put Germany’s second largest city purpose in 2018, which is a far into operation at the end of 2017, Hamburg. higher amount in relative terms. in addition to the development However, DB Netz AG was also and electrification of the route The main reasons were the fact unable to fully implement the between Horka and Knappenrode that the long-term focus on a EUR 1.6 billion in construction for German and Polish goods and few expensive high-speed lines, projects in recent years. passenger traffic in 2018. especially in the wake of the Infrastructure is still being According to an analysis based financial crisis, stunted planning dismantled rather than on public data, the German road of the new construction and modernised in order to reduce network has been extended by expansion anchored in the operating costs, and the over 250,000 kilometres since Federal Railroad Development commitment to install the 1994. More recently, about 10,000 Act and several planned new European Train Control System kilometres of new roads have start-ups for expansion projects ETCS in stages starting in 2002 or been completed each year – the in the regions, which had been 2006 has so far only reached equivalent of 192 kilometres per insufficiently discussed for tens of millions, despite total week. decades – such as the four-track financing requirements of EUR 32 expansion of the Rhine Valley billion per annum. On Railway or the seaport interior connection in north Germany. Since the railway reform, an average of 150 times more road kilometres have been completed per week than new railway routes
INFRASTRUCTURE
The economic assessment of a passenger traffic and the them to set aside provisions. large number of projects in 2018, significant increase in the market Competing electricity suppliers which had been allocated to share of the railway in freight cannot provide reliable forecasts “Potential Needs”, a new transport by 2030 in terms of and therefore need to purchase category, in the decision of the infrastructure. According to the more balancing energy at a Federal Transport Infrastructure government’s draft budget, the higher cost. Plan and Federal Railways amount of funds will be even Construction Act in 2016, made lower than in previous years in However, the decisive factor is the applicable Federal Transport 2020 and 2021. that DB transport companies are Infrastructure Plan (FTIP) 2030 not charged using the new something that ought to be a Billing chaos caused by DB Energie system and still rely on the old thing of the past: a wish list that The integrated Deutsche Bahn stable system. The group did not is financially unfeasible in terms Group and its subsidiary DB want to move its own group of budgets. However, this is Energie GmbH have another companies to the new, vulnerable hardly noticeable at present, as infrastructure segment in system. As a result, all the federal government and DB addition to the rail network and competitors – railway companies Netz AG have also cut back on the stations. They control the and energy suppliers – the plans. For example, six years entire traction current network. experience significant after the proposal of a But unlike any medium-sized disadvantages. An abuse case programme for the moderately utility company, DB Energie’s opened in autumn 2017 by the complex extension of passing roles as an electricity supplier and Federal Network Agency ended in tracks to the maximum length of network operator are not July 2019 with the threat of a the European freight train of 740 separated under corporate law. penalty payment of EUR 1 million meters, only three of the 75 The purchase of electricity from against DB Energie if it fails to planned projects have now been another supplier only became comply with the statutory initiated. Only a few grid-related politically possible in 2014 due to deadlines by November 2019. In commissioning operations are impending antitrust proceedings. the future, the Federal Network expected to have been started by Agency wants to prescribe a the middle of the coming decade. binding new billing procedure. There is as yet no stable traction current accounting system in In the medium term, however, a place which meets the needs of 20 September 2019 significant increase in funding, in the complex conditions. There are Resolution of the Climate Cabinet particular for new construction regular failures to comply with and expansion, is required at an the statutory obligation of the THE FEDERAL GOVERNMENT initial level of EUR 3 billion in the network operator to bill for PLANS TO ALLOCATE AN first half of the 2020s and network usage six weeks after ADDITIONAL EUR 11 BILLION BY beyond. Unlike in previous years, the end of the delivery month. 2030 TO STRENGTHEN THE the projects listed in the FTIP are Issued invoices often contain EQUITY BASIS OF DB AG. undisputed within the industry. mistakes. The system is faced However, the federal with particular challenges when it Equity increase of DB AG government’s decision not to comes to detecting border finance “pure” local transport- The consequences of a lack of crossings – from that point, the related infrastructure projects distinction between the monopoly railway operator of the other with funds from the Federal and competition sectors are country is responsible – or when Railways Development Act is particularly evident here. The the operator of a vehicle highly questionable in terms of “Climate Cabinet” of the federal changes. This is the case, for transport policy. It ignores the government does intend to example, when a rail transport fundamentally different promote the robustness of the company lends a vehicle to a organisation of rail infrastructure, system, i.e. the infrastructure, with locomotive rental company or in contrast to road traffic, where the additional equity investment. another rail transport company. federal states and municipalities However, it raises the question of play almost no role. The federal why it does not do so directly, for Incorrect or extremely delayed government does not yet have example by increasing the LuFV III any conclusive answer to the invoices lead to considerable or enhancing the funds for the additional needs arising from the audit work for the rail transport expansion and new construction companies involved and require political objectives of doubling work.
The nature of a capital increase in Firstly, it is not sufficient to government. Vehicle pool models a corporation is that these funds merely identify the “system could be considered here to create can be freely used by the routes” in traffic planning. It must a counterbalance, which could corporate management. It cannot also be ensured that trains can provide vehicles to new operators. be ruled out that the total of EUR then travel on these routes. It is 11 billion will be used to finance highly likely that international Transport requirements: projects affecting the area of traffic would be of higher priority competition. For instance, the under the current precedence . Increase of federal funds for purchase of new long-distance rules stipulated by European law, expansion and new trains and freight locomotives which could displace intra- construction has already been publicly German connections. . Establishment of a rail mentioned. As other railway infrastructure fund instead of companies pay for their own Above all, however, it must be an equity increase for vehicles and these are not ensured that the system routes Deutsche Bahn AG provided by the federal are actually all covered and that . Unbundling of DB Energie government, this would represent there is sufficient capacity for a massive distortion of growing short-term freight . Reduction of unjustified competition. It would be a traffic. In the order model for intermodal benefits of other different matter if the federal regional rail transport, this can be means of transport, such as government procured the easily implemented by means of low levels of inspections for regulatory compliance in road vehicles themselves and granted corresponding tenders. This has transport them to the winner of a not been the case so far for long- “competition” for the vehicles or distance rail transport. If it is not . Expansion of the single wagonload traffic tendered profitable to operate a low- infrastructure based on a in the future. In regional rail passenger long-distance route coordinated Deutschland Takt transport and freight traffic, there without subsidies – the argument concept, new FTIP with is the concern that DB will be used by DB to cancel the different goals and di fferent able to calculate their bid prices Interregio connections by 2006 – evaluation methodology significantly cheaper due to its other incentives are required. . Sufficient funding for the equity injection. The government This could be achieved, for infrastructure tasks of needs to rule out the use of the example, through a significant inventory network capital increase to cover cost reduction of the train route price modernisation, new overruns for Stuttgart 21 or to towards the direct costs of the construction and expansion, guarantee the payment of the train service. replacement of existing dividends provided for in LuFV III, control and safety technology as surmised by various experts. However, if long-distance system in the infrastructure and on routes are so attractive that traction units Deutschland Takt as a yardstick several parties are interested in . End financ ing loops – the for infrastructure planning operating the route, there must principle of traffic finances The implementation of also be clear rules on who is given traffic Deutschland Takt – a national the opportunity. This cannot . Profit -free operation of timetable – is now widespread. always be DB Fernverkehr, as has infrastructure The vision of interlinking long- been the case in the past. Competitive solutions are possible . Timely review of the Railway distance and local traffic using a Regulation Act much smarter approach with and necessary to ensure high better connections, providing quality and acceptable costs to the . Alignment of train route prices freight traffic with additional public sector – in this case the to the marginal costs federal government – and capacity and using the target . Representatives of the attractive fares for passengers. In timetable as a basis for further competitor railways on the this context, access to rolling infrastructure development, is supervisory b oards of the (DB) expected to make an important stock, especially high-speed trains, infrastructure companies contribution to the achievement needs to be clarified. Only the . Separation of the of climate protection goals. A state-owned company DB AG is currently able to procure such infrastructure companies from (provisional) final version of the the group and opening of the “Timetable 2030plus” should be trains, mainly because of the favourable financing conditions transport companies of the DB available by early 2020. Now is Group to further investors the time to clarify the difficult that it receives with the regulatory issues. creditworthiness of the federal
PASSENGER TRANSPORTATION
Passenger traffic: Market shares of rail transport companies in regional rail transport in 2019
PASSENGER TRANSPORTATION MORE OPTIONS – FOCUS ON QUALITY
Since the railway reform of the 1990s shifted the responsibility for regional rail passenger transport to the individual states, their transport organisations and railway companies have worked together to significantly expand the available services.
During this process, the financial resources. As a western states in Germany. contracting authorities result of the dynamisation, At that time, the were able to redeem a regionalisation funds also distribution key of funds to substantial “competition recovered after the decline the 16 states was revised. dividend” through due to the Koch-Steinbrück At the same time, it was competitive awards and paper in 2006/07. The ensured that a decline in acquire more (and adjustment of the eastern states would qualitatively better) regionalisation funds not take effect until the regional rail transport provided a further boost in 2020s, so that the affected services with fewer 2016, in particular for some states had time to adjust.
Development of operating and transport service In regional rail transport since 2002 (forecast from 2019) Transport service in billion p/km operating service in million train/km
PASSENGER TRANSPORTATION
There were no dips in terms of demand for capacity in rail but not least, the stations demand or traffic volume, passenger transport – not only themselves must create more measured in passenger because more people live and spacious, new entrances and kilometres. It increased steadily. work in metropolitan areas, but clear obstacles out of the way. This shows that contractors and also because rising property railway companies have prices and rents in metropolitan Tenderi ng competition increases effectively developed the supply. areas force people to move quality and service If the traffic (demand) increases further away and make their significantly more than the commute even longer. And However, regional rail transport operating capacity (supply), finally, politicians and the sector services since the railway reform capacity utilisation will increase. have set themselves the goal of have not only “grown in number”, However, this development encouraging more people to but above all, are now “better”. cannot continue indefinitely. switch to environmentally The old, creaky “Silberlinge” of Trains are currently often more friendly railway services, as a the sixties and seventies have than full, especially in result of which the modal split is given way to modern, air- metropolitan areas. In the finally changing significantly. conditioned trains with competition among the modes of From the perspective of outstanding passenger transport, overcrowding is also an passenger transport, many information. The operators’ encumbrance. Nevertheless, the smaller aspects have to be customer satisfaction surveys modal split of the railways has considered in addition to the confirm this trend. Those only risen from 6.5 to 8% since expansion measures. The transport companies in 1991, and for public transport as a capacity of the trains themselves competition received good whole, the figure has actually can be increased: longer trains or ratings in these surveys. The fallen from 15.8 to 14.8%. double-decker trains, where the increased focus on providing platforms allow, while passenger good service is especially praised. One of the major challenges for information can be improved for the coming years is the growing faster entry and exit of passengers at the stations. Last
Infrastructure costs in passenger transport Station fees per train km In relation to operating service, 2002 = 100 Route fees per train km Total (weighted)
Prior to the entry into force of the Market share of the competitor first competitive allocations on Railway Regulations Act (ERegG) railways continues to increase less frequently used secondary in the summer of 2016, the “cap routes. The strong Regional on train route price increases” in Particularly since the turn of the Express routes were then Section 37 (2) ERegG was subject millennium, the market share of gradually introduced into the to intense discussion. In the non-federal railways, i.e. railway competitive market. DB has done years before, the regionalisation companies competing with everything possible to prevent funds gradually fell in value, as Deutsche Bahn, has increased the particularly high-volume S- the infrastructure usage costs significantly in regional rail Bahn networks, above all Berlin, had risen far beyond the transport. Although the share of Hamburg, Munich, Cologne, dynamisation. Operators have services operated by competitor Rhine-Main, Stuttgart and generally ordered fewer services, railways was only 8.2% in 2002, it Nuremberg, from being awarded as an increasing proportion of had increased to 21.1% by 2010. to other companies – and it is service charges needed to be This year, in 2019, it will be continuing to do so. passed on as continuous items around 36%, before exceeding by the rail transport companies to the 40% mark for the first time in The term “competitor railways”, DB Netz and DB Station&Service. 2020 and growing to 45% by which refers to all railway The cap on train route price 2024. This development can be companies that are not part of increases was introduced shortly predicted relatively reliably due to the DB Group, is a mixed bag: it before the legislative decision the competition procedures includes municipal or public rail was made and has since linked which have already been transport companies that have the increase in the costs of train decided. existed for a long time and have routes and station stops in expanded from their home base regional rail transport to the In comparison, the development after regionalisation and dynamisation of the of traffic performance measured liberalisation. Examples of this regionalisation funds, thus in passenger kilometres (p/km) is include the Albtal traffic company setting it at 1.8% pa. This does not lagging behind. Here, the share of or the Erfurt railway as a include stations for which competitor railways was only municipal separate financing agreements 3.9% in 2002, rising to 13.6% in have been concluded with states 2010 and is almost exactly 25% in or municipalities. It is evident that 2019. The market share of the infrastructure costs have competitor railways, measured in continued to rise briskly since train/km and p/km, is expected THE MARKET SHARE OF THE 2016. Although the increase in to continue to converge in the COMPETITOR RAILWAYS train route prices has been coming years. Historically, the IN OPERATING ERFORMANCE contained during the past few difference is due to the fact that WILL GROW TO 45% BY 2024. years, station fees have the operators tended to make the increased even more rapidly.
Market share of competitor railways Proportion of competitors in train/km on the basis of operating and transport performance Proportion of competitors in p/km
company or SWEG and Hesse S-Bahn Hannover. Two other tested in principle, it still needs to state railway as a state company. “climbers” are National Express be further developed. In the first Then there are subsidiaries of with further services on the RRX few competitive contracts, the foreign state-owned railways lines in North Rhine-Westphalia contractors were able to such as Abellio (Netherlands), and Go-Ahead. The company has consistently achieve better Netinera (Italy), Keolis (France) or, now won a total of five transport quality and more performance at somewhat smaller, VIAS contracts in Baden-Württemberg lower costs. They generated a (Denmark). Finally, there are and Bavaria, which will be remarkable competitive dividend companies owned by large operational in the coming years. for the public sector and for institutional investors (Transdev) passengers. Meanwhile, many of and purely private, listed So all is well in regional rail the transport contracts have companies (National Express, Go- transport? Not necessarily, as the been awarded for the second Ahead). high number of contracts time. In some cases, there have awarded directly in the past two been further cost reductions – DB Regio and its subsidiaries will years is striking. Many of these but these are often accompanied continue to maintain their top were small allocations in by a loss of quality. The reasons position in the coming years. secondary networks. But they are manifold; the inadequate There will be some “climbers” in also included the major “interim quality of the infrastructure, the the following areas: Abellio will assignments” of the S-Bahn density of traffic and frequent significantly increase its market networks in Berlin and Munich. problems, especially with new share in Baden-Württemberg and vehicles, are the most important North Rhine-Westphalia, the Nevertheless, several very factors. Staff shortages are an latter by taking over some lines of interesting networks are set to be additional problem that has S-Bahn Rhein-Ruhr. As a result, re-awarded in the coming years, already resulted in shortfalls in Abellio will reach a market share some of them for the first time in some regions. of about 7.6% and thus the level competition. Although the of Transdev, which in turn can competition model in regional rail The tendering practice of the look forward to the acquisition of transport has been tried and past few years has caused some
issues, with the operators making federal state and local authorities, time. In some cases, there have more and more detailed i.e. the municipal award model been further cost reductions – specifications. The award (usually directly awarded to the but these are often accompanied decision ultimately falls almost municipal company), so that it by a decline in quality. The exclusively in favour of the offer also includes the inseparably reasons are manifold; the lack of with the cheapest price per train connected regional rail transport, infrastructure quality, the density kilometre. In the future, however, is also highly problematic. This of traffic and frequent problems, the expertise of the transport would also noticeably reduce the especially with new vehicles, are companies must once again be competitive market. the most important factors. Staff utilised to a greater extent and shortages are an additional quality criteria and the innovative Nevertheless, several very problem that has already resulted year 2017 must counter the interesting networks are set to be in shortfalls in some regions. principle of competitive tendering re-awarded in the coming years, through massive political some of them for the first time in The tendering practice of the past interference. Berlin’s S-Bahn competition. few years has caused some issues, alone accounts for over 5% of the with the operators making more total German regional rail Although the competition model and more detailed specifications. transport market. Contract in regional rail transport has been The award decision ultimately falls extensions have also been tried and tested in principle, it still almost exclusively in favour of the agreed with the S-Bahn railways needs to be further developed. In offer with the cheapest price per in Stuttgart and Nuremberg and the first few competitive train kilometre. In the future, new assignments have been contracts, the contractors were however, the expertise of the issued to DB Regio, without this able to consistently achieve transport companies will need to having been necessary. The better quality and more be utilised to a greater extent and intention of expanding the performance at lower costs. They quality criteria and innovative approach of directly awarding rail generated a notable competitive concepts of the bidders need to be systems for urban and dividend to the public sector and given more weight. The transport surrounding areas (such as passengers. Meanwhile, many of companies want to achieve Karlsruhe) on the basis of the the transport contracts have something, not just act as construct of a “group of been awarded for the second chauffeurs. authorities” consisting of the
Regional rail ransport
Still almost no competition: long - company has further plans for again until last year 2018! distance transport expansion beyond the existing Nevertheless, the increase in routes (Hamburg-Cologne, Berlin- passenger numbers in long- The situation in long-distance Cologne, Berlin-Stuttgart). distance transport during recent passenger transport is quite years is very notable when different: There is still no Although demand in regional compared to developments in the noteworthy competition, as DB traffic is steadily rising, the long-distance bus sector. Fernverkehr still accounts for situation in long-distance Although long-distance buses more than 99% of the traffic. transport, which is characterised were previously only permissible However, night traffic has been by the monopoly supplier DB on cross-border routes and to and established by Austrian Federal Fernverkehr, is different. There from Berlin during the time of Railways (ÖBB) and is growing has been no correction in this German separation, the market slightly. Flixtrain, the train market by a purchaser nor (so far) was liberalised on 1 January 2013. subsidiary of Flixmobility, has also by any substantial competition. However, the concern that cheap established itself as a new Contrary to what the “passenger long-distance buses would leave company on the market in the records” have suggested in recent trains empty has not materialised. past two years, which clearly sets months and years, long-distance There was a small drop in itself apart from the previous traffic has experienced ups and numbers, but this had market entry attempts in the downs. A boom market in the disappeared by 2016 at the latest. long-distance transport market. 1990s, marked mainly by the new At the same time, the number of The company is trying to build a high-speed routes and the long-distance bus passengers combined network for long- introduction of the ICE, was has stabilised at a level of around distance bus and long-distance followed by years of massive 23 million per year. The long- train services. It does not have failures at the turn of the distance bus market has any trains of its own and leases millennium. The austerity consolidated strongly after just a locomotives and wagons from programmes of the 2000s few years: Flixbus has a market other rail transport companies, resulted in an unsteady fare policy share of well over 90%. therefore acting as something of a and the elimination of the “Predatory pricing” has fallen “purchaser” itself. It essentially (supposedly) economically significantly. At the same time, occupies marketing and traffic unproductive IR traffic led to a however, DB long-distance traffic planning as parts of the value drastic fall in passenger numbers has taken up the fight and chain and leaves the other parts using long-distance transport. The significantly increased the to service providers in a similar level of 1997 was not reached number of saver and super-saver way to the bus sector. The tickets.
Long-distance passengers per year in millions
This is not good news for the recognise the tickets with the tariffs). Overall, the current regional rail transport companies reduced fare, but also receive a structure in which the DB tariff is in the pre-carriage and post- significantly lower share of the merely “applied” as the “rail tariff” carriage of these long-distance proceeds as there is less to by the other rail transport transport connections as well as distribute. In some cases, the companies, is no longer up to the relevant authorities savings on long-distance travel date and needs to be replaced by responsible for gross traffic are lower than the regional tariffs a standardised cross-company contracts. They are required to (C price of rail tariffs or network rail tariff.
Long-distance bus passengers Passengers in long-distance traffic Long-distance rail transport passengers in millions Total long-distance traffic
Transport requirements:
Allocating regional rail In particular, achieving Gradually introducing transport consistently in appropriate risk the competition model competition distribution between the to long-distance rail responsible authorities transport within the Aligning the competition and the rail transport context of Deutschland model in regional rail companies, especially for Takt transport back towards personnel and quality goals infrastructure
FREIGHT TRAFFIC
DIVERSE TRAINS DOMINATE
Market shares of the largest rail freight companies in Germany with more than a billion tonne kilometres (t/km) in 2018
FREIGHT TRAFFIC
Rail freight performs strongly in increasingly being questioned as transport market as a whole; but the area of building materials, it does not effectively represent above all, roads are handling although the transport of power the change in the transported more and more traffic and station coal is in decline. At any goods. Discussed alternatives increasing their share. According rate, it is not possible to identify such as turnover, train kilometres to federal government experts, an energy or transport transition and the value of goods, however, the growth of road traffic was from the extensive rail transport also have conceptual 3.3% in 2018. The percentage of road and air transport fuels. weaknesses or are not even growth itself was therefore three Rail freight traffic experienced a collected at present. Moreover, times as high as that of rail minor boom in 2018 as a result of the trend is not consistent in the freight transport. Based on a road the continued low water level in transport of heavy goods. The market share of around 72%, the high-revenue Rhine continuing construction boom is absolute road traffic has catchment area. On the whole, also bringing therefore increased by ten times experts commissioned by the the volume of growth in rail. Federal Ministry of Transport Rail freight transport continued to According to the experts, rail’s estimate the growth of rail freight grow in the reporting period. This market share in freight transport transport to be modest in 2018 seems indisputable, although the remained at 18.5% in 2018. and estimate that transport information about the scale of performance will only be 1.1% growth has been inconsistent for Contrary to long-term policy higher than in 2017. A decline is a long time, even with the two objectives, a modal shift from even expected in 2019, which the authorities conducting primary road to rail has only occurred in experts primarily attribute to surveys among railway individual cases. The losers in the declining steel production and companies, and uncertainties market tend to be inland traffic shifting back to inland remain as to whether the waterway vessels. The slight waterways. This argument is not information is complete. economic slowdown in Germany completely convincing when is not reflected to the same looking at the developments in Market shares of the largest rail extent in freight transport by rail the steel industry and the freight companies in Germany in 2019. Federal government renewed low-water situation, with more than one billion tonne experts expect growth in the total which is slightly less severe, as kilometres (t/km) in 2018 market for freight transport of well as in light of the feedback 1.2% in 2020. They forecast a from the competing railways. Not LIMITED MOVEMENT IN further increase in the market INTERMODAL COMPETITION share of road transport and a According to the Federal Network decline of the rail share by 0.4%. Agency and the Federal Ministry The appraisers mentioned the of Transport, rail freight traffic considerable difficulties The freight transport market is rose to a good 129 billion tonne experienced by DB Cargo AG in still a long way from a traffic kilometres in 2017. This is despite fulfilling their allocated contracts. transition, even if the experts are the fact that the seven-week Staff shortages, a lack of right and rail freight only grows at closure of the Rhine Valley resources and IT issues seem to the same approximate pace as Railway caused significant delays be the main reasons for this and, the rest of the market in the following the accident on the despite improved framework future. Road traffic continues to Rastatt Tunnel under conditions, may have resulted in grow intermodally towards “three construction on 12 August 2017. the railway being unable to fully quarters” of transport According to the survey, the exploit its potential in the performance – with all the increasing average transport transport market. Traffic was negative side effects such as the distance continues to be the likely to have been higher than heavy use of infrastructure, driver, rather than the transport expected. further increasing CO2 emissions, volume which is already declining high accident rates, slightly. The trend away from bulk comparatively low compliance No movement in the road/rail ratio goods, specifically heavy goods, and, especially in the case of towards lighter transports in foreign companies, low social combined transport, in addition to There has been hardly any standards and negative aspects motor vehicles and parts, is intermodal changes to the such as shut-off emission control particularly evident here. The key situation, with rail growing at the systems and brake assistance metric “tonne kilometres” is same average rate as the freight systems.
Share of DB freight ra ilways falls Agency, the “intramodal” market during the year of crisis. Their below 50% share of competitor railways was market share exceeded the 50% 47% in 2017. Competitor railways mark in 2018 and is expected to According to the latest available grew intermodally in 2018 and also rise in subsequent years. survey by the Federal Network appear to continue this growth
Return on sales Return on sales Forecast of intermodal market shares in 2019 of all railway companies in The competitor railways (Intraplan on behalf of the BMVI) rail freight traffic in rail freight traffic (2014 – 2016, in %) (2014 – 2016, in %)
he Federal Network Agency has competitor railways rose slightly available up to 2016. The stated that turnover in rail freight in 2017, as did the consumer economic momentum at DB transport for 2017 in Germany prices (by 0.4%). While DB Cargo Cargo is becoming increasingly amounted to EUR 5.7 billion, i.e. AG slid deeper and deeper into dramatic; in 2018 the EBIT was – only a slight increase compared the red despite or because of EUR 190 million, and many to EUR 5.6 billion in the previous some aggressive pricing policies, observers are expecting even year. This is also likely to be the competitor railways appear to worse figures for 2019. While DB case in 2018, not least because of have continued to achieve a low Cargo’s operations in other the federal government’s funding but stable return. However, European countries was the main of train route price payments in figures from the full survey of the driver of the deficit in previous the second half of the year. The Federal Network Agency are only years, the fall in earnings is specific increasingly also affected by revenues Transport performance of DB Cargo traffic in Germany, which has of the Transport performance [billion t/km] of which in Germany [billion t/km] been declining since 2011.
The poor economic performance rank order of the largest rail between road and rail, the of DB Cargo AG has affected freight companies in Germany persistent great scepticism of politics and society in such a way once again changed slightly in the many shippers and political that all rail freight traffic is reporting period. But above all, it decision makers towards the incorrectly assessed as remains to be noted that half a railways and, in contrast to the irreparable or treated as a phase- dozen companies behind the intensive discussions at a political out model. The federal three front runners TX Logistik, level, how rail can be government and DB have worked Cap-train and SBB Cargo strengthened in the transport closely together in recent years in International provided a relatively market in order to relieve the various areas where public homogeneous group in terms of burden on the roads and achieve support programmes appeared to their traffic performance. climate protection goals. Behind be of special benefit to the Company takeovers are still rare; this, the federal government as struggling DB Cargo business, most competitive railways are owner and the DB company particularly with the aim of growing organically. The management are very keen for DB boosting route and plant prices, significance of the shortage of Cargo and DB as a whole to make implementing new incentives to skilled workers, especially train a profit, which is hardly surprising. increase energy efficiency, drivers and technical staff in The “Rail Freight Traffic promoting innovation and also vehicle servicing, increased Masterplan”, presented in June using hybrid drives. Most recently, considerably during the reporting 2017 by the former Federal DB introduced the idea of the period and the shortage of skilled Minister of Transport, Alexander permanent subsidisation of this workers is the most important Dobrindt, and has been widely production system into the obstacle to growth. The wave of praised, although only the train political discussion by providing a additional free time, which was in route price support has been report on the future of wagonload particular triggered by collective implemented as a short-term traffic, which was assessed as a bargaining agreements with effective measure. Other projects, deficit driver. Exclusive direct Deutsche Bahn AG, has further such as accelerated track funding of wagonload traffic, aggravated the staffing electrification, have made no which is operated to a requirements. Furthermore, the progress during the reporting considerable extent by DB Cargo shortage of staff, with and period and are likely to fail due to AG alone, is practically without the inclusion of attractive a lack of federal funds in the inconceivable without collective bargaining agreements, following years. An example of discrimination. The alternative of has also led to a significant this is the Cabinet’s decision to tendering for partial services, increase in personnel costs. lower the budget for the particularly for the chemical and construction and expansion of the metalworking industry and also The training of internal staff has route network from EUR 1.64 to for the desired growth, was increased noticeably and the 1.52 billion in the federal budget presented during the debate from question of how to avoid, or at for 2020. the ranks of the competitor least financially compensate for, railways. In a similar way to the costly mutual poaching of The federal government laid the regional rail passenger transport, long-term skilled workers and foundations for a Rail Future efficiency and innovation could newly trained employees has Alliance and a Rail Masterplan in be better supported by often been discussed as a result. the coalition agreement agreed in competitive railways than by Agreements to reimburse training 2018. An essential change subsidisation, which would costs are being prepared. consisted of the Parliamentary require both tough cuts and State Secretary in the BMVI, Enak technological stagnation. Barely any drive towards Ferlemann, who was also modernisation entrusted with the function of Diversified train market “Rail Commissioner” as a result of With regard to the other factors the coalition agreement, making it The number of companies in the relevant to success, the clear that rail’s market share in German market has stabilised at a persistently weak performance of freight transport would increase high level. Capable railway the infrastructure is striking. to 25% by 2030 as a result of the companies from neighbouring Furthermore, the few truly policy of the federal government. countries, such as the Belgian fundamental modernisation The adaptation of political Lineas or companies from Poland measures stand out, as well as instruments to achieve this goal – and Austria, have particularly the closing cost gap of some the Federal Transport intensified their activities. The infrastructure usage charges Infrastructure Plan only predicted
a market share of rail of an almost until the beginning of 2017. This emissions trading due to a unchanged 18.3% – continued for was combined with stable low reduction of emission allowances the whole year in 2019. It is mineral oil taxes and exemption has also had an impact on the unclear whether it will prove to be from levies associated with costs of the fossil element of a success. climate protection and the energy traction power generation, as the transition, which in turn make up costs have recently risen from Energy cost increase for the most the bulk of the charges in rail under EUR 6 in some cases to climate -friendly means of transport freight transport. around EUR 25. Since the spring of 2016, electricity procurement The largest cost block on average In 2018, the EEG surcharge fell costs have risen on the electricity for rail freight transport, along slightly for the first time, and the exchange, so that rail has also with the significant increase in strain of rail network charges, had to cope with rising energy personnel costs, is mainly energy which had risen significantly in costs. The development of diesel costs. Although it was possible to previous years, was noticeably prices, however, also showed a compensate for the rising costs of relieved as a result of the Network steady upward trend during the levies and network usage charges Fees Modernisation Act (NeMoG). same period, so that the relative with the dampening effects of the While the EEG surcharge fell again burden on the two most comparatively low price of in 2019 and is unlikely to change competitive modes of transport is procurement until 2017 and the much in the next two years, the likely to have changed only largely constant cost burden for network charges relating to slightly. In the future, this trend is the almost exclusively electric rail traction current have again likely to continue without strong freight transport network, trucks climbed above the inflation rate in state intervention, with rail as a benefited from a historically low 2019. The tightening of European whole enjoying a relative level of advantage due to its significantly diesel Greenhouse gas emissions in freight transport lower specific energy prices Figures in grams per tonne kilometre, 2017 consumption.
In September 2019, the Climate Important step for Federal Association of Cabinet announced key points for infrastructure costs Forwarding and Logistics was, for example, almost 53% higher in CO2 pricing, the entry level of Another important cost factor – 2019 compared to 2018 for which would mean a diesel price and the most varied among the general cargo traffic. However, that is about three (3) cents modes of transport – is charges due to the much smaller share of higher, which could rise to ten for the use of infrastructure. After tolls in terms of total costs (10) cents by 2025. This measure many years of falling truck tolls, compared to rail (4.4% after the is not expected to include a they increased by approximately toll increase), this very high one- relevant incentive to change 50% on 1 July 2018 to off value only made itself felt logistics concepts and the official approximately 18–19 cents per with an overall cost increase of objective of strengthening rail, kilometre due to the inclusion of 1.6% in this market segment. The even in combination with further all federal highways. The average cost effects per shipment are on projects of the Climate Cabinet. increase announced by the average less than one percent.
The fact remains that, unlike in differences, for example the exemptions for green trucks, rail freight transport, only a small removal of vehicles from service which have been in place since part of the road network – now overnight (rail: always, trucks: 2018 and have been provided for 5.7% instead of previously 1.9% – sometimes), tend to be more in the 2019 climate protection is tolled at all. Not only is 100% of expensive in rail freight transport package, are once again the rail network subject to a toll, compared to transport by truck. distorting fair competition, even but the less frequently used In rail freight transport, track though they have had little connection routes are particularly charges were close to 20% of the impact in practice so far. expensive. Other systematic total costs for a long time. Toll
Development of freight traffic Transport performance within Germany in billion t/km Source: Intraplan on behalf of the BMVI, 2019
Unclear train route price signals put a strain the market
The grand coalition has initiated a occasion for the majority of freight from its customers. In contrast to the significant reduction in train route traffic and ordered a 5% lower price announcement of former Federal charges on the federal network for standard freight trains. The Transport Minister Alexander with the coalition agreement. In development of the approved train Dobrindt, the Railroad Regulation Act 2017, the Federal Network Agency route prices, however, followed DB has therefore not helped to reduce only rejected DB Netz AG’s train Netz AG’s objective to demand an train route access charges. route price increases on one average annual increase of 2.4%
Deutsche Bahn has filed an action clear that moving away from the railway network was adopted for with the Administrative Court tried-and-tested civil law legal this purpose with effect from 1 July against the decision of the Federal action of the Railway Regulation 2018. This sum reduces the cost Network Agency of 2017. Just over Act was a mistake. burden related to train route prices two years later, there has still been for railway companies by around no trial at first instance, which Relief was granted only for rail 50%, which has since improved means that each year, freight freight traffic after several competitiveness compared to road railways need to create higher attempts in the form of a train transportation. However, funding is provisions and postpone the route price subsidy offset by DB initially limited to five years. The financing of investments. Netz against the respective train effects in the transport market are Meanwhile, more than EUR 100 route price. A federal subsidy currently difficult to assess due to million of potential additional claims amounting to EUR 350 million per many impact factors and statistical also need to be taken into account. year for journeys on the federal uncertainties. Just like a pressure cooker, it is
Route charge for standard freight trains in euros per train kilometre and average increase
Freight railways and their on the state funding of available participants and a subsequent customers also expect a greater space, technical upgrades optimised slot management service focus from DB Netz’s own (automation and control system. Continuous 24/7 company DUSS GmbH and other technology, extension of the operation is also recommended container terminal operators. The tracks, etc.), expenditures for the to make combined transport most important solutions for the acquisition of crane-able trailers more economical. The federal rapid improvement of combined and replacement investments, government should also promote transport have been identified in including investments for the positive marketing for combined a collection of 14 suggestions for repair of tracks. The digitisation transport and the transfer of improvement under the auspices of terminals was also identified knowledge in educational and of the Federal Ministry of with the introduction of a data research institutions. Transport. There is a strong focus standard for all process
Transport requirements:
Grid expansion based on the Extension of the truck toll Rail as a backbone for goal of doubling the train and avoidance of any new modern city and other kilometres in rail freight benefits for trucks relating to logistics concepts for small- transport by 2035 infrastructure usage charges volume goods
Additional capacity and Massive innovation drive for Reactivation and upgrading reduction of maintenance the technological of track connections, outages due to modernisation of rail freight terminals and charging implementation of transport points to acquire more cargo Deutschland Takt for rail Orientation of the level of Permanent lowering of train monitoring for road transport Comparable conditions for route prices and expansion towards the efficiency of the construction and to non-federal routes and railway controls operation of rest areas facilities (trucks) and parking facilities Coordination of the (rail) Tendering open to development and companies for individual standardisation of transport Strengthening of the role of service elements of vessels including below the short-term freight traffic in wagonload traffic standard container timetable creation
28 PERSONNEL / INNOVATION / DATA MANAGEMENT
LABOUR COST DEVELOPMENT INDICES OF THE FEDERAL STATISTICAL OFFICE VS. SPECIFIC RAIL TRANSPORT COMPANY VALUES
RAILWAY COMPANIES ARE FOCUSING ON FUTURE FACTORS
Personnel is urgently needed position and have been able to In the railway sector, digitalisation everywhere. Train drivers have negotiate significantly improved has not yet made much headway. been classified by the Federal conditions for their employees. In order to keep pace in the Employment Agency as a This has led to certain problems, modern mobility and logistics bottleneck occupation for a especially in regional rail market, the sector needs to begin number of years. In the past two transport. Price adjustment harnessing the enormous years, however, the search for clauses for labour costs are potential inherent in digitalisation. good staff has once again included in the long-term There are essentially two levels of intensified. Train drivers are now transport contracts (up to 15 possible application: relationships the most difficult job to fill in the years). However, these are based between the various technical market with 23 applicants for 100 on official indices that do not components, i.e. “machine-to- positions. Deutsche Bahn AG reflect the regional rail transport machine communication” on the expects around half of its train market. In particular, the indices one hand, and communication drivers to retire in the next ten “only” contain the monetary between the system and years. The situation is not much components of the collective passengers or freight forwarders different for the competitor agreements, i.e. increases in the on the other. There are special companies. In regional rail scale wages and structural challenges posed by the transport, some regular routes changes to remuneration integrated Deutsche Bahn Group have been cancelled due to an (higher-level groupings, for at both levels. The generation acute lack of staff. example). However, they do not and analysis of data by the cover working time reductions, infrastructure monopolist or All transport companies have holiday leave extensions or existing monopolist in ticket sales intensified their efforts to attract changes in what counts as can create new distortions in young talent and are investing in working time (e.g. set-up times). competition which did not training – including for career In particular, elective models previously exist. changers – at levels far above between money and free time are any previous estimations. Many not considered. But these The European Train Control rail transport companies have agreements, which increase System (ETCS) can further begun to extend their feelers demand at a time when there is increase the capacity of the route abroad, increasingly outside the already a lack of available staff, network at crucial points and EU. Some workers have even are particularly problematic. improve traffic safety, particularly been recruited from Vietnam. in combination with electronic The dramatic situation is interlocking systems and, in In order to avoid a situation illustrated in the chart, which future, with 5G networks. But not where companies train compares the development of only that, the new safety individuals who are then the Federal Statistical Office’s technology can help with modern recruited by other rail transport index with the actual wage cost driver assistance systems to companies as soon as they have development based on an make railway operations even passed their exams offering example rail transport company. more energy-efficient: from the “joining bonuses”, training For rail transport companies with optimisation of each individual alliances have already been long-term obligations, there is a train using the existing “green established in several federal risk that the existing low contract function of route controls” to states, which ensure that if staff margins may turn negative, as it route-based optimisation (several switch from one rail transport has not been possible to trains on one route in a row) and company to another, their calculate the increased labour a network-related analysis. Every training costs will be reimbursed costs and there is consequently train should run at optimal speed proportionally. This recognises no compensation mechanism. at all times to keep to schedule. that training is an industry Finding this balance is therefore Energy is thereby not lost responsibility that individual essential for the stability of unnecessarily, as trains do not companies cannot avoid. The regional rail transport. run too fast or slow. The network earning potential has increased capacity should also be optimally significantly by approximately Big Data on track: saving energy, used. 50% in the past 10 years. Faced tickets from door to door and with staff shortages, the unions much m ore have a strong negotiating
Use of digital communication on the network
However, this optimum only Reorganising tariffs and sales Vertrieb GmbH also acts as the becomes possible if network “sales subsidiary” for providing users are given direct and non- The integrated group also has an services for other companies, it is discriminatory access to the data advantage over its competitors not based in the “neutral” collected the infrastructure when dealing with passengers. infrastructure within the operator at all times. There are The current rail tariff with A, B integrated group, but rather still no adequate regulations in and C prices and package deals within the competing passenger the current railway regulatory law. are technically a “proprietary transport division. Among other tariff model” of Deutsche Bahn things, this set-up makes it The federal government is AG, which the competitor difficult to establish the responsible for financing vehicle railways only “apply”, but are comprehensive “door to door” conversions, i.e. for the unable to develop on an equal ticket sales requested by installation of ETCS on-board footing. Attempts have been passengers and policymakers. In units during the network made to introduce a German order to significantly reduce the switchover to ETCS and digital tariff association for a long time, barriers hindering access to the actuators. The fact that signals but have not yet been successful. public transport system, the travel from the track to the commercial framework conditions vehicles does not change the fact This is one reason why the for reciprocal and equal sales that they are infrastructure. If the competitor railways are still not must in principle be agreed upon federal government indirectly allowed to sell tickets at all rates by all transport companies within passed this responsibility on to for rail travel. For example, the scope of discussions the rail transport companies or, in competitors are only permitted to between the various DB the case of regional rail transport, distribute long-distance tickets companies, competitor railways, to the operators, this would using machines, and only if the transport associations and the reduce competitiveness in the machine has been approved by public authorities. railway sector compared to road the transport authority. transport and reduce services in Online/mobile, which is an Strengthening the innovative regional rail transport rather than increasingly important digital power of rail! increase it, as regionalisation distribution channel, especially funds would need to be diverted the use of apps, is still only The plan announced in 2017 to for the conversion of vehicles. available to DB itself. While DB put together a total of EUR 1
billion for investments in existing, effects are to be expected. For age of 30 without any problems but not yet economic, many years, all modes of arising, while freight wagons can modernisation projects with the transport in Germany have had a run for 60 years. At the same sector within the scope of a research institution that time, the railway industry does “Federal Railways Future Rail promotes and evaluates traffic- not generate profits very quickly. Freight Programme”, which has a related innovations and supports In the past few years, many rail timeframe of five years, has been “their” modes of transport with transport companies have not postponed several times and is scientific work. Rail is the only made any profits at all. It is scheduled to be launched by the mode of transport without such therefore impossible to finance federal government in 2020 – an institution. he innovation innovation or even basic albeit with only EUR 20 million cycles for rail are also particularly research. per year, so that no relevant long. Rail vehicles can reach the
Share of rail transport companies with a positive operating result
in % Regional rail transport Rail freight services
In May 2019, the “German Centre public-sector projects which aim savings is very difficult; for Railway Research” was to promote the expansion of consequently, only one company founded, headquartered in ready-to-use technology in the has actually applied for funding. Dresden, although it is not yet market. Freight wagons which fully functional. Increasing were previously too loud have A directive for the promotion of scientific rail research at been successfully converted so alternative propulsion systems, universities and colleges is that they meet the strict which aims to promote, for equally important. At the requirements of the Rail Noise example, the “hybridisation” of moment, there are only six Act. The funding guidelines for diesel railcars and the purchase professorships in Germany “energy efficiency”, which aimed of two-system locomotives in dedicated to railways. This is not to promote the switch to energy- freight transport, is not yet in enough. saving power units and the place, but previous drafts have adoption of energy-efficient been adapted to DB’s structures. In addition to basic research, driving, were not successful. Above all, funding also needs to there are a number of funded Finding evidence of the actual be significantly overhauled. It is
currently too bureaucratic and is fixation on the rail kilometre price contracts. They would be defined barely able to keep up with when awarding contracts, by the authority before the market developments. independent further development conclusion of the contract. The at a later stage does not appear specific application would then Innovations in long-term to be an option. In addition to a be coordinated between the transport contracts in regional rail return to more qualitative criteria authorities and transport transport are particularly in the awarding process, future companies during the contractual challenging. In view of the “innovation budgets” could be period. The transport company planned for the duration of the would contribute its own ideas.
Transport policy demands
Securing non- Establishment of a discriminatory access for company-neutral all rail transport German tariff for local companies to all relevant and long-distance traffic data collected and processed by the Unlimited right to the infrastructure companies sale of all rail tickets for all rail transport Financing of European companies on fair and Train Control System reasonable terms vehicle conversion during the roll-out of ETCS and Massive expansion of digital signal boxes by railway research by the the federal government federal government
ABOUT US
mofair e.V. Reinhardtstraße 46 10117 Berlin Tel.: 030 53149147-6 www.mofair.de
Netzwerk Europäischer Eisenbahnen e.V. Reinhardtstraße 46 10117 Berlin Tel.: 030 53149147-0 www.netzwerk-bahnen.de
Responsible for the content:
Dr Matthias Stoffregen (mofair) and Peter Westenberger (NEE)
Publishers: mofair e.V. and NEE e.V. Reinhardtstraße 46, 10117 Berlin The Competitor Report Railways 2019/20 is based, among other things, on research by Hanseatic Transport Consultancy (HTC) and BSL Transportation Consultants, Hamburg.
The editors have exclusive exploitation rights to the content and its presentation. The use of sections of or the full unamended Competitor Report Railways 2019/20 for third parties’ own publication is permissible if the source is cited. However, the explicit agreement of the publishers is required for commercial use.
Copy date: 9 October 2019