DB Cargo Faces EU Deadline: Profitability by 2026 or Forced Restructuring

DB Cargo is running out of time. With EU pressure mounting, JVZ services under review, and 5,000 jobs at stake, Germany’s state freight carrier must prove it can survive in a liberalised rail freight market—or risk being restructured from the top down.

Germany’s state-owned freight operator DB Cargo is under mounting pressure to achieve profitability by the end of 2026, or risk being subjected to a formal restructuring process initiated by the European Union. This warning comes despite the company benefiting from an EU-approved public support scheme for single wagonload traffic (JVZ).

The European Commission has made it clear: continued financial underperformance cannot be sustained indefinitely—even with subsidies in place. For DB Cargo, the next 20 months could be decisive in determining its long-term future within the Deutsche Bahn Group.

🚨 @DB_Cargo continues its deep restructuring to reverse €350M+ losses in 2024.

🔻 5,000 job cuts by 2028
🔄 Shift to 7 decentralized units
🚆 New work models for train drivers
📉 80% of losses from single wagonload
💶 Track access fees up 16%
🪖 Military logistics back in… pic.twitter.com/m5cauCvA8i

— RAILMARKET (@RAILMARKETCOM) April 8, 2025

Single Wagonload (JVZ) Rail Freight Faces Possible Termination

One of the most drastic solutions currently being considered is the termination of JVZ services. Speaking to media last week, DB Cargo CEO Sigrid Nikutta stated, "If we fail to structure JVZ in a financially sustainable way, we will no longer be able to operate it." The potential cut has triggered concerns across the sector, as single wagonload traffic plays a crucial role in connecting regional industries to the wider European freight network. However, for DB Cargo, cutting loss-making services may be the only viable path forward to avoid deeper structural reforms.

This echoes the precedent set in France, where Fret SNCF was forced into restructuring following EU findings that state support had distorted the market. The EU’s approval of JVZ subsidies for DB Cargo was contingent on methodological alignment with the principle of covering external costs—such as comparing the environmental and social impacts of road vs. rail freight.

DB Cargo’s EUR 350 Million Loss Triggers Freight Sector Shake-Up

As RAILTARGET previously reported, DB Cargo began 2024 with a EUR 350 million loss, triggering the launch of a wide-reaching restructuring programme. By 2029, the company expects to cut approximately 5,000 jobs as part of its recovery plan. CEO Nikutta described the pace of reform as emotionally and physically taxing. "The speed we need to maintain during this restructuring is almost beyond our strength,” Nikutta said. "We are asking a lot from our people. Sometimes there are tears. I know it, and I acknowledge it. But it has to happen, because the future of DB Cargo depends on this pace."

Despite moving less freight than forecasted—15% below expectations—the company managed to meet revenue and EBIT targets in January and February 2025. This suggests that short-term stabilisation goals may still be achievable. For 2025, DB Cargo has set an internal goal of limiting losses to a double-digit figure, a significant improvement from last year’s three-digit loss. Achieving this target is seen as a critical milestone in building credibility with EU regulators and avoiding more aggressive intervention.

The Bigger Picture: Market Survival or Structural Reform?

The situation facing DB Cargo is emblematic of a broader dilemma within European rail freight: can traditional state-backed operators compete in a liberalised market while meeting public service expectations? The answer may hinge on how quickly and decisively DB Cargo can adapt.

The EU has shown a willingness to support environmentally beneficial rail services, but only under conditions that preserve fair competition and financial transparency. For DB Cargo, this means walking a fine line between public interest obligations and commercial viability—and doing so under intense regulatory and political scrutiny.

As 2026 approaches, the stakes are high. A successful turnaround could serve as a model for publicly owned freight operators across Europe. Failure could reinforce the case for breaking up or privatising state rail freight assets, a scenario that would dramatically reshape the EU’s logistics landscape.

Sources: Yahoo finance; RAILTARGET