The Deutsche Bahn holding, DB Cargo’s parent company, published its annual report for 2025 last week: a good occasion to dive deeper into the circumstances at its freight subsidiary. Things are looking better, but not exactly rock solid. Further restructuring changes could provide the needed push to get DB Cargo back on track.

DB Cargo’s restructuring proceedings, which started in 2022, are not immediately visible when looking at the company’s basic financial indicator: revenue. Note that this number includes data from all of DB Cargo’s subsidiaries, including outside of Germany. Revenue has remained relatively stable, hovering between 4.5 billion and 5.5 billion euros since 2017.

EBIT is more ‘all over the place’

How different does that picture look when looking at Earning before Interest and Taxes (EBIT). EBIT is an indicator of operating performance, but does not yet include expenses such as taxes and interest payments. DB Cargo has not achieved a positive EBIT during any of the assessed years, with lows recorded during the pandemic years. In other words, the company’s operations are fundamentally unprofitable.

This is underscored by the operator’s performance figures. During the pandemic, DB Cargo broke the downward volume and operational performance trends. It transported more freight and did more transport work in terms of tonne-kilometres. Despite that, the finances were worse than ever. The more the company transported, the more money it lost.

That is clearly not a good sign for a rail freight operator – especially when it can no longer count on money transfer from its parent company Deutsche Bahn. But for all the criticism that DB Cargo has received, there has been a turnaround in 2022 in the company’s financial performance.

When looking at the EBIT figures, there is a clear change starting in that year. Since then, DB Cargo has only recorded year-on-year improvements on EBIT. In 2025, the operator came very close to operational profit at -7 million euros. There are various reasons for this, and there are also reasons to think that this may continue into the future.

Subsidies contribute most

The main windfall, which cannot directly be ascribed to sound business management or a restructuring, came in the shape of subsidies. Germany approved a 300 million-euro subsidy for single wagonload (SWL) traffic in 2024. DB Cargo received 163 million euros from those funds, which are also reflected in the EBIT figures. Moreover, DB Cargo received millions in track access charge (TAC) subsidies. In 2025, federal subsidies totalled 305 million euros (195 million for SWL, 78 for TAC, 32 for investments).

Additional federal funding has clearly helped DB Cargo to substantially improve its operational result. This, of course, is not necessarily a solid long-term plan. In order to continue cutting costs, the freight operator has put several plans on the table. These pertain to some of the biggest expenditures: personnel, maintenance and unprofitable contracts.

Halving the workforce

DB Cargo is planning a massive workforce reduction of over 6,000 employees. That would shrink the size of the workforce (in Germany) by around 50%. Across Europe, DB Cargo has over 25,000 employees. Terminations have helped to save 149 million euros on personnel costs in 2025.

The company has also been ending unprofitable contracts. This deliberately shrinks the company’s business, while improving operational performance. It has also sold the intermodal business of its subsidiary Transfesa.

This is reflected in the rolling stock fleet of the operator. Its size is shrinking, and has been shrinking consistently for a couple of years. Simultaneously, DB Cargo has sold 60 locomotives to Beacon Rail and around 6,000 wagons to GATX in sale-and-leaseback agreements. The share of leased and rented wagons in the overall wagon fleet has seen an uptick in 2025 – despite volumes declining.

The increase in the share of leased and rented wagons during the pandemic years coincided with a growth in volume. That is not the case now. If DB Cargo continues to pursue this path of operational flexibility, its owned wagon fleet could keep shrinking in size.

As a result, the provision of locomotives and wagons should become more flexible. This creates financial flexibility as well – DB Cargo won’t need to pay for their maintenance. The operator also gained 300 million euros from the sale.

Together, the termination of unprofitable contracts, reduction in volume and decline in maintenance costs (along with some other things) helped to shrink material costs by 292 million euros, DB said.

Will it be enough?

The DB restructuring proceedings will continue going forward. Decentralisation in several business units that have their own rolling stock and personnel at their disposal should help improve operational efficiency. Further workforce reductions, bonuses for long-haul drives for train drivers and far-reaching SWL remodelling (going to four central shunting hubs) should also aid financial performance.

DB Cargo will need to “clarify details” on its restructuring plan in the summer of 2026. Only then, gradual implementation of the newly proposed plan will begin. With -7 million euros in EBIT in 2025, the company is close to achieving a positive operational performance. However, its net financial result was around minus 40-60 million euros, according to CEO Bernhard Osburg. There is some way to go to profitability by the end of the year.

In Germany, the freight operator’s earnings grew thanks to several factors. These included higher revenues from compensation payments for locomotive supply contracts and infrastructure-related train cancellations. Additionally, government subsidies for single wagonload traffic, infrastructure, and track access charges contributed to the increased earnings.

On the other hand, DB Cargo saw a revenue decline of 434 million euros (-8%). This was driven primarily by performance in Germany and the United Kingdom (including metal transport), as well as in Spain (partly due to the sale of subsidiaries). Price adjustments, however, partially mitigated this reduction. When adjusted for negative currency effects, the decrease in revenue was slightly less significant, says the DB report.

Positive cost developments

At the same time, DB Cargo underwent some significant positive changes in the cost picture. Material costs shrank by 292 million euros. Lower activity levels, particularly reduced expenditure on maintenance services, energy, and purchased transport services, were the main contributors to the decline. The drop in maintenance costs was primarily a result of lower volumes.

Personnel costs were 149 million euros lower than in 2024, primarily due to reductions in the German and Spanish workforces. Depreciation also declined by 95 million euros – a result of an extension of the useful lives of locomotives and freight wagons in the balance sheet, as well as the sale of rolling stock.

Sale-and-leaseback

The latter point (at least partially) relates to the sale-and-leaseback of some 6,000 wagons (GATX) and 60 locomotives (Beacon Rail). “The sale and subsequent leaseback of part of the rail vehicle fleet is a contribution to the transformation of DB Cargo, making the provision of locomotives and wagons more flexible. The proceeds from the sale also contribute to improving the financial situation of DB Cargo”, the 2025 report specifies.

The Swiss freight operator SBB Cargo recently undertook a similar step, indicating that it improved operational flexibility. In the long term, the sale-and-leaseback will help reduce depreciation write-offs and reduce maintenance costs.

“Positive one-off effects from sale-and-leaseback transactions served as a bridge in 2025 until the implemented operational measures took effect”, explains DB. In total, DB Cargo got 300 million euros from the sale of the wagons and locomotives.

With its relatively strong financial position, Nurminen Logistics defies external uncertainties. “Several geopolitical uncertainties and the re-routing of international flows of goods affected negatively on the development of the Baltic business and volumes decreased clearly”, Pohjanvirta writes in his review.

“Although the economic development in the markets was weak, we were able to achieve good results in all areas and continue to invest in international growth, especially in railway logistics.”

Nurminen Logistics also acquired Essinge Rail at the end of 2024, which led to growth compounded by organic growth in the Swedish and Finnish markets.

Rail becomes key

The rail business saw significant growth: net sales grew from 57.3 million to 78.2 million euros. Profitability increased to 13.6 million euros, up from 10.1 million euros. The Essinge Rail acquisition played a substantial role in this development. Rail now accounts for 71.5% of the Nurminen Group’s net sales. In 2024, that number was 54.7%.

However, there are also some Group-wide drawbacks to be noted: operating profit declined from 19.3 million (2024) to 14.6 million euros (2025). Moreover, depreciation and amortisation nearly doubled: from 5.4 million in 2024 to 10 million euros in 2025.

Financially stable

Still, Nurminen Logistics remains in a financially stable position, as evidenced by a healthy equity ratio and gearing. The equity ratio remained at a “good level” at 43.9% (40.7% in 2024), the company says. This indicates that the company is not severely reliant on debt to finance its assets.

Gearing excluding IFRS 16 fell to 14.2% (from 35.6% in 2024). This also suggests a decrease in financial risk. Similarly, the net debt to EBITDA ratio fell to 0.87 from 1.19, meaning that EBITDA could cover the entire net debt over the course of 87% of a year.

Nurminen Logistics explains that its Gothenburg-Northern Finland service, launched in 2025, was rapidly adopted by international customers. However, demand in Finland was below the expected level. The company saw itself forced to reassess the route and discontinued operations.

Heading into the future, Nurminen Logistics focuses on growth investments in larger markets, like continental Europe and Sweden. “This demonstrates the company’s willingness to try new things, learn quickly, and make decisions that support long-term and sustainable growth in the years ahead”, the CEO comments.

“The bypass routes offered were typically very long, frequently inferior in their technical parameters and inadequate in their capacity”, UIRR explains. “Moreover, the infrastructure manager has not indemnified the operators for their extra costs of operations, which translated to 50% more traction hours and 50% more rolling stock for the same performance output as in previous years.” Consequently, both intermodal rail freight operators and transshipment terminals suffered financially.

Better times coming?

After a 10% decline between 2022 and 2023, the combined transport sector has recorded growing figures for three of the past five quarters. The past couple of years have been quite tough for the combined transport sector, especially due to the closures of the Gotthard and Frejus axes in August 2023. Now that that is past, more stable times could be on the horizon. Combined transport registered a 1,76% growth in the first quarter of 2025 compared to the same period in 2024.

Overall, the company’s net loss adds up to 554 million euros. PKP Cargo ascribes a big chunk of that loss to impairment losses at 483 million euros.

Why such losses?

“Last year’s results are the result of many years of omissions and lack of action, which on the one hand led to a loss of market position, as well as to a mismatch of resources to the changing transport market, and consequently a decrease in the margins of operating activities”, PKP Cargo writes. It lost 30 per cent of its market share in Poland in recent years, and the loss of freight volume is in large part due to a decline in coal transport.

The deteriorating financial situation at PKP Cargo led the operator to enter into restructuring proceedings last year. Financial hardship was expected throughout most of the year. The company said that it expected improvements only from November 2024 onwards.

When approaching performance by looking at train-kilometres, the picture looks slightly different. That indicator ended 2024 at 51,2 million, which is half a million less than 2023.

The estimated growth in tonne-kilometres and decline in train-kilometres, according to Fermerci, suggests that there are improvements in operational efficiency. “This increase in tonnes transported per train can be influenced by several factors, such as the adaptation of the railway infrastructure to European standards, which continues to increase the capacity of existing lines, and also the adoption of advanced technologies in rail traffic control and management systems allowing greater operational efficiency”, the association says.

Modal share

When compared to the road sector, the above numbers show that Italian rail freight is weakly positioned in the transport market. In 2022, its modal share was only 12,4 per cent. Italy dangles somewhere around the bottom of the list of EU member states.

Fermerci points out that the 12,4 per cent may not even be entirely accurate: research shows road traffic is underreported, and so the true modal share of rail may even be smaller than the official number. A mere 15 per cent of freight is realistically “contestable” by rail, mostly on longer distances.

Transalpine traffic

Internationally, things are looking better and worse at the same time. Expectedly, rail freight traffic between Italy and France collapsed in part as a result of the Frejus tunnel closure: -38 per cent. Similarly, traffic to Switzerland fell by 8,1 per cent. That is also partially attributable to infrastructure problems: the Gotthard Base Tunnel reopened for traffic in September after a year-long closure. It stands to be noted that in the case of both countries, a decline in cross-border rail freight with Italy has been ongoing since 2021.

Nevertheless, transalpine traffic overall grew by 1,7 per cent. The problems in France and Switzerland were compensated by Austria (+5,3 per cent), which also accounts for more than half of all Italian transalpine rail traffic, and Slovenia (+33,6 per cent).

Rail freight needs certainty

This year will also bring challenges to Italian rail freight. Major works in 2025 will affect capacity on vital routes, such as Milan – Domodossola and Genoa – Ventimiglia. Improvements are much-needed, since 14 per cent of Italian railways are saturated over four hours every day, says Fermerci. However, they themselves are present obstacles in the form of closures and downtime, for which the industry cannot count on proper compensation.

“The rail freight sector needs certainties”, says Fermerci president Clemente Carta. “It is essential to ensure a stable and predictable regulatory framework, so that companies can plan investments and operate efficiently.”

The performance improvement was a welcome development, because 2023 was a low point in the corridor’s history.

Customer satisfaction

Despite the upswing in punctuality, customer satisfaction fell significantly. In its report, the ScanMed Corridor points out that it had a fairly low number of respondents, which may not be representative of its entire customer base. However, the decline is noteworthy nonetheless. ScanMed recorded a satisfaction drop of 47 per cent (from 77 to 30 per cent). Meanwhile, the share of respondents that are “slightly satisfied” grew from 15 per cent to 40 per cent, and unsatisfied respondents now amount to 30 per cent (up from 8 per cent).

The corridor’s customers are relatively enthusiastic about the C-OSS (Corridor One-Stop Shop) service, which facilitates train path management and is the single point of contact allowing applicants to request and receive answers regarding infrastructure capacity for international freight trains. By contrast, they were not satisfied with train performance measures and the corridor’s commercial offer.

Capacity grows, demand falls

The ScanMed corridor grew its capacity for 2025 thanks to fewer temporary capacity restrictions. In 2024, it offered 10,9 million Pre-arranged Path (PaP) kilometres. For 2025, ScanMed has 13,5 million kilometres available. Despite the bigger capacity, the corridor has not seen a rise in the requested PaP capacity for the year. Rather, there is an 8 per cent drop compared to 2024.

DB Cargo incurred by far the biggest share of the loss in the first half of the year: 291 million euros. The remaining 65 million euro losses appeared on the balance sheet in the second half of the year. It must, however, be noted that DB Cargo received single wagon load subsidies during those months, which amounted to approximately 180 million euros. That suppressed the financial damage for Q3 and Q4.

Improvement from 2023

Even though a 350 million euro loss is nothing to brag about, it is an improvement compared to 2023. In that year, DB Cargo made a 497 million euro loss (EBIT). All in all, 2024’s result would be around 30 per cent better than that.

Martina Niemann told DVZ earlier this year in which areas DB Cargo has been able to make financial improvements. She mentioned administrative and production management expenses (60 million euros), as well as portfolio streamlining. “We divested ourselves of loss-making transports, achieved price increases in all areas, and were thus able to offset losses from cyclically driven downturns”, Niemann is cited as saying.

There is some time pressure for DB Cargo to start turning profits. This is because the rail freight operator may need to start paying back government aid by requirement of the EU, which set a deadline for profitability of 2026. that will prove to be a challenge. The company’s restructuring programme does not seem to be going great: “These restructuring concepts are unconvincing, cause an annoying number of operational problems, and there is still a lack of adherence to the plans”, a supervisory board member is quoted as saying in Tagesspiegel.

DB Cargo’s restructuring

Moreover, the EU banned any financial aid to DB Cargo from parent company Deutsche Bahn. The freight operator will have to make do with its own financial resources. However, the EU did approve 1,9 billion euros in government aid to help the company implement its restructuring programme.

DB Cargo’s restructuring entails breaking up the company into six separate business units. They will be Steel, Automotive, Liquids & Bulk, Full Load Solutions and the largest single wagon network in Europe. Combined Transport (maritime and continental) will also remain within DB Cargo’s task, after some pressure from trade union EVG. The restructuring will lead to 2,300 jobs being cut.

The Hamburg port was not handed this result on a silver plate. Rather, it faced abrupt route closures for almost an entire month in the summer of 2024. Rail freight traffic was only possible for exceptional cases during the day, RailFreight.com reported at the time.

Even before the summer came to an end, misfortune struck the port once more. Terminal staff went on strike, after which the port could not accept any freight trains coming in. Delays then grew to be as long as 24 hours. Despite this, 2024 turned out to be a good year for rail at the Hamburg port.

In other aspects, the company did not do so well either. Freight turnover shrunk from 3,3 trillion tonne-kilometres in 2023 to 3,1 trillion in 2024. However, the company notes that freight turnover in the east was higher than it had ever been. With container traffic also growing to 7,9 million TEU (5,9 per cent increase) and setting a new record, that is not entirely surprising.

RZD’s total revenue, EBITDA and total asset worth all grew compared to 2023. The total revenue grew to 2.834,4 billion rubles (an 8,6 per cent increase). When adjusted for the official rate of inflation at 8,9 per cent however, that revenue constitutes a decline in real terms.

Loading decline

A major component of RZD’s business problems is the continuous decline in loading on its network. February 2025 brought a noteworthy 9,3 per cent drop in loading volume on the Russian network when compared to February 2024. The loading decline is nothing new, with monthly numbers often ranging from minus 4 to minus 6 per cent, but the 9,3 per cent drop was unprecedented.

Russian media rightfully pointed out that leap year 2024 allowed for a bit more freight to be loaded in the month of February. The daily average decline amounted to a slightly less surprising figure at 6 per cent. Nevertheless, when compared to 2023, the decline still sat at 12 per cent.