Mass Layoffs Loom as DB Cargo Cuts SWL Operations

Germany’s largest rail freight operator faces a storm over plans to downsize and abandon key cargo services.

DB Cargo is preparing to lay off thousands of employees and reduce single wagonload traffic. Trade unions are sounding the alarm, warning not only of severe social consequences but also of potential chaos in European rail freight and a surge of lorries on the roads.

At the end of July, German economic daily Handelsblatt reported that DB Cargo was internally preparing a drastic reduction in staff numbers as a result of cancelling a significant part of its single wagonload traffic, which has been chronically loss-making despite the blanket subsidy approved for the German government by the European Commission. The report was based on internal company sources.

DB Cargo Confirms Layoffs

"Based on current economic forecasts, we expect a loss of 5,000 jobs by 2029," said DB Cargo CEO Sigrid Nikutta in an official statement. In 2025, 1,000 employees will leave the company, mostly through retirement, and a further 650 have received or will receive offers to transfer to other positions within Deutsche Bahn. In addition, 700 employees will leave under a voluntary redundancy programme. By 2029, the workforce will need to be reduced by a further 2,500.

At the same time, DB Cargo announced it was selling its stakes in container terminals in Cologne and Düsseldorf. The buyer is HGK Logistics and Intermodal GmbH. Through its subsidiary DB Intermodal Services, DB Cargo held a 22.5% stake in the CTS terminal in Cologne and a 51% stake in the DCH terminal in Düsseldorf. The transaction price remains confidential.

"More Liquidation Than Recovery" — Experts Criticise Strategy

DB Cargo’s actions have sparked debate in Germany. Public broadcaster ZDF aired a report featuring commentary from rail expert Professor Thomas Ehrmann of the University of Münster. According to Ehrmann, DB Cargo has no viable business model.

"Since 2009, DB Cargo has reported only losses. DB Cargo’s costs per kilometre are 33% higher than its competitors. Without a future target business model, the company has embarked on restructuring. Much has not been made public, but from what is known, the measures sound more like liquidation than recovery: locomotives are being sold and drivers are being laid off," Ehrmann said, adding that the company "wants to get rid of about 25% of its staff and is doing everything that does not lead to positive business results."

ZDF noted that DB Cargo is losing market share. Industry data show that more than 60% of all freight on the German rail network is now carried by operators other than DB Cargo. Moreover, DB Cargo still handles most of the complex and low-margin freight — namely single wagonload traffic.

Industry magazine RailFreight spoke to experts Martin Metz, economist and long-time specialist in international rail finance, and consultant Dirk Munder. Munder warned: "It seems the DB Cargo management has no idea what their statements about winding down a substantial or complete part of single wagonload traffic could trigger. Hopefully, it was just another political signal and an indirect call for more financial support for SWL." He added that today’s situation was the result of years of misguided assumptions, even at the highest level.

According to Metz, German — and by extension international — rail freight could be on the brink of chaos. "The market has been predicting this for more than 20 years. From a corporate governance perspective, the fault lies with German transport ministers. They failed to use the government’s role as owner of DB effectively and did not take the oversight role of their supervisory bodies seriously. They should have forced DB to define a basic business, sectoral, and corporate strategy," Metz said.

He recalled Europe’s joint decision to shift more freight from road to rail. "If politics wants rail freight, DB must be pushed to formulate a strategy," Metz argued. "From a purely economic and free-market perspective: where private operators can achieve better results, DB Cargo does not need to run block trains."

Metz stressed that DB Cargo should become the carrier of last resort. State railways must do what no one else can — train formation and single wagonload services. Most small and medium-sized companies cannot dispatch full block trains by rail. If they are to use rail, they must rely on SWL, which is inherently unprofitable. This requires locomotives to pick up one or two wagons, take them to a marshalling yard, and form them into a train — a process that is costly and labour-intensive.

"If we want to capture significant freight volumes and support modal shift, rail must be accessible to smaller firms. If there is political will for rail freight to play a leading role, a separate system for SWL must be established," Metz said.

Currently, DB Cargo’s role in the German freight market is declining. Private operators delivering better results have taken over market share, but DB Cargo still dominates SWL with roughly 90% of the segment. As a state-owned company, it long defined itself as a universal provider — including unprofitable services. If it now abandons SWL, it could effectively mean the end of this segment in Germany.

Experts Warn of Supply Chain Disruption

Munder said cutting SWL would be the wrong move to stabilise rail freight. "If you want profitable rail freight, you need more single wagonload services," he argued. Many companies, such as those in the chemical industry, depend on SWL to send products to smaller customers who require deliveries in individual wagons. Without SWL, they would no longer be served.

Reducing SWL services would also lower overall quality. "Fewer trains mean some wagons could miss daily departures from marshalling yards. If there are currently three daily departures but this drops to one, the chance of delays rises. Customers will not know when their goods will arrive," Munder explained.

He also criticised DB Cargo’s operational inefficiency: "They behave more like a state agency than a business. In these conditions, improvement is difficult. Private companies perform much better, with dynamic and streamlined structures. We need a system reboot — something new from the ground up."

Metz disagreed, insisting that DB Cargo, as a public service operator, must provide SWL even at a loss, because it is part of national infrastructure. "You have to go to a remote village on a hill, pick up the only wagon there, and take it to the yard," he said. Otherwise, rail will become inaccessible to many small firms, and freight volumes will drop overall.

Unions Demand SWL Support and Transfer to Infrastructure Division

The EVG railway workers’ union has also spoken out, declaring its opposition to any drastic reduction of SWL services. According to the union, between 4,000 and 8,000 jobs are at risk. "SWL is the backbone of DB Cargo’s operations. Cutting it will destroy quality jobs and put 40,000 more lorries on our roads every day," the EVG warned.

Instead of "mindless cuts," the union called on DB Cargo’s management to implement the future measures agreed with unions, and on the federal government to ensure effective SWL support. EVG chairwoman Cosima Ingenschay told Der Tagesspiegel that "bad news always comes in slices" from DB Cargo’s leadership.

The EVG proposes declaring SWL a public service obligation and transferring loss-making operations to DB InfraGo, the infrastructure arm of Deutsche Bahn. This company would not need to generate a profit. However, DB InfraGo currently lacks formal public service status — it is only "oriented towards public benefit" while still being profit-driven.