Developments in the relevant markets

The developments described below are based on available data, which sometimes has different time horizons, since full information about market developments in the first half of 2023 was not available at the time this report was prepared.

In the first half of 2023, the German passenger transport market recorded a sustained increase in volume sold. However, the ramp-up of demand varied greatly across the individual market segments.

• In the first half of 2023, motorized private transport gradually approached pre-Covid-19 levels again. The still high level of fuel prices was initially of little importance.
• At the beginning of 2023, domestic German air transport recorded further recovery effects, but remained significantly below the pre-Covid-19 level. The very high growth rates are the result of a very weak base in the previous year.

Rail passenger transport

Rail passenger transport showed significant growth in volume sold (+36%) in the first quarter of 2023 compared to the same period in the previous year. There were Covid-related restrictions in the first quarter of 2022. DB Group’s volume sold also increased by 36% in the same period. The positive development in volume sold for rail passenger transport continued in the second quarter of 2023.

• Regional rail passenger transport increased in the first quarter of 2023 (+29%) despite continued effects from people working from home and a corresponding reduction in business trips and commuter journeys. DB Regional saw a similar increase in performance (+30%). Compared with the second quarters in each case, there is a moderate in­­crease of around 1% at DB Regional. This was strongly influenced by the 9-Euro-Ticket valid in June 2022 and by the Germany-Ticket which has been in force since May 2023.
• Long-distance rail passenger transport also significantly exceeded the level of the same quarter of the previous year in the first quarter of 2023 (+43% for the sector as a whole; +42% for DB Long-Distance). In comparison with the second quarters of 2022 and 2023, DB Long-Distance also recorded an increase in volume sold (+4%).
• FlixTrain significantly expanded its range of services and stops portfolio in the first half of 2023 and also increased its volume sold.

Public road passenger transport

The first quarter of 2023 saw the overall market for public road passenger transport record a noticeable increase in volume sold (+20%) compared to the corresponding period in the previous year.

• In the first quarter of 2023, the growth in regional bus transport was around 12%. DB Regional Road recorded an increase in volume sold (13%) in the first quarter of 2023 and was also able to improve in the second quarter by 30% compared to the same period in the previous year.
• At the beginning of 2022, long-distance bus transport offered a greatly reduced service due to Covid-19. In the first half of 2023, the range of services was again significantly expanded and was well above the level of the same period in the previous year. For example, FlixBus significantly improved its volume sold in the first half of 2023, however the corresponding period in the previous year was still characterized by Covid-19 restrictions.

After the weak end to 2022, freight transport was also exposed to a negative market environment in the first quarter of 2023 and developed significantly below the previous year across different modes of transports. High factor cost increases weighed on the cost side of transport companies and caused transport prices to rise significantly. After transport prices for trucks had already risen considerably in the course of the previous year, train operating companies followed suit at the start of 2023. High inflation and the resulting decline in consumer sentiment, as well as weak impetus from industry, resulted in spare capacity and strong competition across different modes of transports, especially in the case of container transport. In addition to the price, transport quality was also increasingly in focus. The construction economy, which was burdened by high interest rates, and the weak development of energy-intensive industries led to significant reductions in transport. The supply chain problems caused in particular by the war in Ukraine have weakened markedly, but are not yet completely resolved.

After the poor development that is expected in the second quarter of 2023, demand development will recover from the second half of 2023 at best; however, in relation to the entirety of 2023, freight transport in Germany is expected to perform below the previous year.

Rail freight transport

According to previous publications by the Federal Statistical Office, the development of rail freight volume sold of –5.0% until April 2023 was well below the corresponding period in the previous year. This market situation reflects both the negative baseline effect, due to the strong months of the previous year, and the current negative environment.

Transport for the chemical, steel and paper industries, which have been affected by the energy crisis, recorded sharp declines. Coal and mineral oil transport provide positive stimuli, as does a marked increase in automotive transport after extreme slumps in previous years. Combined transport, which is so important for rail freight transport with a share of around 45%, fell considerably in volume compared to the previous year on account of high inflation and the resulting weak consumption stimulus.

Road freight transport

Road freight transport started off weakly in the first quarter of 2023. Although a slight recovery has been evident since April 2023, volume sold remains below the previous year’s level. This is due to negative economic stimulus and a reduced order book in the construction sector, which is particularly relevant for roads:

• According to our own calculations, by May 2023 volume sold showed a significant decline of 3.5% compared to the corresponding period in the previous year.
• A similar development is reflected in the toll statistics of the Federal Agency for Freight Transport. On the toll road network, performance up to May 2023 decreased by 4.4% compared with the same period in the previous year. The development of trucks registered in Germany was worse than that of foreign trucks.

Inland waterway transport

Following a bad year in 2022 due to low water levels, inland waterway transport continued its negative development in the first months of 2023 with volume sold in the first quarter of 2023 almost 10% below the previous year’s level.

Unlike the development in rail transport, inland waterway transport was not able to benefit from the strong short-term demand for coal and declined in almost all key sectors.

In the first quarter of 2023, volume sold in European rail freight transport (EU 27, Switzerland, Norway and the United Kingdom) declined significantly by 6% compared to the same period in the previous year. The market was burdened by weak economic development and high costs, especially in the energy sector. Declines were observed in particular in energy-intensive industries such as chemicals and steel, as well as in combined transport.

• Volume sold for rail freight transport in the United Kingdom declined by around 3% in the first quarter of 2023. Metal and mineral oil transport in particular developed negatively. Construction materials and intermodal transport, on the other hand, played a supporting role on the market. At DB Cargo UK, transport performance declined more strongly than in the market.
• In Poland, as of May 2023, the rail freight transport market increased by around 2% on the basis of volume sold compared to the same period in the previous year, but fell by around 7% on the basis of traffic volume in tons. The reason for the increase in volume sold is the change in flows of transport as a result of the war in Ukraine. The transport distance has increased significantly in some cases. Transport for the energy-intensive metal and chemical industries declined in particular. As a result of the slump in transport to China, combined transport also saw a sharp decline. DB Cargo Polska’s volume sold developed above the market.
• In France, volume sold in rail transport fell sharply by over 25% in the first quarter of 2023. In addition to the economic weakness of the industry, the strikes on pension reform at the start of 2023 had a particularly negative impact. In line with the market trend, DB Cargo France’s volume sold also declined.
• The market for international rail transport between Asia and Europe experienced a sharp decline as a result of the war in Ukraine. The war severely reduced the volume of Eurasian rail transport, with low ocean freight rates in 2023 causing a further burden on Eurasian rail transport.