Development of business units

Business units in the integrated rail system

Developments in relevant markets

The developments described below are based on preliminary data available to date and data which sometimes have different time horizons, since full information about developments in the first half of 2020 was not available as at the time of writing.

German passenger transport market

  • In the first half of 2020, the Covid-19 pandemic had a serious impact on German passenger transport, with mobility providers either restricting their services or sus­pend­ing them completely. The extent to which this happened differed across individual market segments.
  • Motorized private transport reduced at some points by up to 40% in large cities and up to 60% on federal highways, but recovered faster than other modes of transport as public life and economic performance resumed. The underlying reasons for this are an increased preference for private transport, along with low fuel prices.
  • Even at the beginning of 2020, journeys on domestic German air transport had significantly reduced; the Covid-19 pandemic saw volume sold fall by up to 99%. Supply and demand are increasing again, albeit slowly.

Rail passenger transport

  • Following an abrupt collapse of demand, rail passenger transport saw a significant reduction in volume sold (–14.1%) in the first quarter of 2020.
  • Regional rail passenger transport experienced a considerable decline (–15.9%) due to a lack of private and commuter journeys; DB Regional saw a corresponding decrease in performance (–17.3%) in the first quarter of 2020.
  • Long-­­distance rail passenger transport saw substantial increases at the beginning of 2020 due to a number of fac­tors including a reduction in VAT on long-­­distance tickets, however from mid-­­March 2020 it experienced sig­nificant losses due to a sharp fall in the number of private and business journeys; DB Long-­­Distance recorded a corresponding loss of volume sold (–12.2%) in the first quarter 2020; FlixTrain has suspended its range of services since mid-­­March 2020.

Public road passenger transport

  • Public road passenger transport experienced significant losses in volume (–10.4%) for scheduled services in the first quarter of 2020.
  • Local bus transport declined less sharply (–9.5%) due to publicly ordered basic services; DB Regional Bus saw a significant drop in volume (–26.8%) in the first quarter of 2020.
  • Long-­­distance bus services completely ceased operations between mid-­­March and the end of May 2020; market leader FlixBus has offered services on limited routes since the end of May and BlaBlaBus since the end of June 2020.

German freight transport market

The reduction in demand that was already evident during the previous year, due to the economic slowdown and decline in industrial production, continued at the beginning of 2020. This means that even before the Covid-19 measures, which were implemented in March 2020, there was a decline in performance across the different modes of transport, which then became massively more pronounced in subsequent months.

  • Domestic and foreign demand dropped sharply in almost all industrial sectors. Production and incoming orders fell in terms of percentage, in some cases noticeably in double digits, for example in the steel and automotive industries.
  • Special items not related to the economic situation – for example, structural changes as part of the ongoing energy transition and initial shipping restrictions in the Rhine and Elbe due to low water levels – also had a negative impact.
  • Overcapacity across modes of transport as a result of the drop in demand has led to a noticeable increase in price pressure. This applies not only to inter- and intramodal transport, but also to the forwarders.
  • In the inland waterway sector, volume sold has already fallen by about 10% in the first quarter of 2020. Particularly affected were transport in the coal, ore/building materials, coke/petroleum products and chemical sectors. The situation has worsened further over subsequent months; according to the Federal Office of Freight Transport, this was also reflected in sharp volume declines in seaport hinterland transport.

Rail freight transport

In accordance with previous publications by the Federal Statistical Office, the volume sold for rail freight up to April 2020 fell by almost 9%. The most significant decreases were observed in the automotive, coal/coke, ore and steel sectors. In light of the developments of DB companies during the subsequent months and the train-­­path kilometers, a double-­­digit percentage drop in performance is expected for the first half of 2020 across the entire rail freight transport sector. Intramodal shifts between DB companies and non-Group railways were observed in both directions.

  • At the DB companies, the weak performance of the previous year, primarily due to recession, continued in the first quarter of 2020 and was significantly aggravated from mid-­­March 2020 onwards by Covid-19-­­related measures. The assumption of additional supply transport during the Covid-19 lockdown was only partially able to mitigate these effects, as the sectors and industries with a high transport share also recorded the sharpest declines. These include, in particular, combined transport as well as the steel, ore, coal, automotive and chemical industries.
  • According to our calculations, the non-­­Group railways also remained considerably below the previous year’s level and experienced a comparable situation to DB companies up to April 2020. Losses were particularly evident in automotive and coal/coke operations.

Road freight transport

Truck transport also exhibited a decline in performance; however, this was less pronounced than for rail freight and inland waterway, not least due to the significantly different freight structure. The increased transport share from consumer goods and construction industries had a stabilizing effect, as did parcel shipments, in particular relating to e-­­commerce. The difficulties and uncertainties of the haulage companies are also reflected in the significant decline in new truck registrations. Although the reduced cost of diesel compared with the previous year is relieving cost pressures in the industry, this is being offset by a number of increased costs, including higher organizational expenses. The issue of driver shortages also continued during the crisis.

  • According to our calculations, volume sold fell by about 5% until June 2020.
  • This development is also reflected in toll statistics from the Federal Office of Freight Transport in the first half of 2020. Mileage fell by 4.5% on the toll road network. In contrast to previous years, the development of vehicles registered abroad was weaker than that of trucks from Germany.

European rail freight transport market

Volume sold in European rail freight transport (EU 27, Switzerland, Norway and Great Britain) fell by about 10% in the first months of 2020. The main reason for the drop in demand for transport is the Covid-19 pandemic. As a result, routes via the North Sea ports of Antwerp, Rotterdam and Hamburg also lost their stabilizing function. The continuing decline of coal transport has put an additional burden on the rail freight market.

  • Rail freight transport volume sold in Great Britain fell by about 13% in the first half of 2020. The most severe decreases were observed in the coal, petroleum and building materials sectors, along with international transports. At DB Cargo UK, as well as in the overall market, volume sold declined significantly in the first half of 2020.
  • In Poland, rail freight transport volume sold fell by more than 14% up to May 2020. This decline in volume impacted all industrial sectors, while the most significant declines were seen in ore, metal and building material transport. According to the UTK rail transport office, combined transport has developed above average with a share of about 12% of the total market volume. DB Cargo Polska also recorded a double-­­digit percentage decline in volume.
  • In France, volume sold for rail freight fell by more than 15% in the first quarter of 2020, mainly due to nationwide strikes against pension reform that took place at the beginning of 2020. A sharp decline in demand for transport is also expected in the second quarter 2020 as a result of the Covid-19 pandemic. At the end of March 2020, freight transport in France had already fallen to between about 50 and 60% of its normal volume. A weak development of volume sold was also seen in Euro Cargo Rail (ECR), which experienced a drop well into the double-­digit percentage range.

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