Deutsche Bahn is Definitely Looking for a Buyer for DB Schenker

As various media outlets, including Handelsblatt, report, Deutsche Bahn is definitely looking for a buyer for its logistics subsidiary DB Schenker. This was no longer a rumor, even though there was much discussion about alternatives to a sale. A revenue of 16 to 17 billion EURO is on the table. With such large sums, the pool of potential buyers is limited.

By: Andreas Müller

(Bonn) Various media report today that Deutsche Bahn has finally decided to sell its logistics subsidiary DB Schenker. The search for a buyer has begun. With the expected or hoped-for revenue of 16 to 17 billion euros, Deutsche Bahn primarily aims to reduce its debt. However, given the level of debt and the necessary investments, these amounts are just a drop in the bucket and can disappear quickly without long-term impact. Moreover, the previous dividends from DB Schenker will also cease, and one must not underestimate the potential loss of contracts from DB Schenker’s customers, depending on who the buyer turns out to be. A quick resolution is not expected; a longer-term process is anticipated. Many candidates are not viable given the sums involved.

The Railway Should Focus on Its Core Business

The usual phrases are being thrown around, such as “The railway should focus on its core business.” But this core business, namely the transportation of passengers and freight by rail, are the trouble spots and loss-makers. In this area, there are Herculean tasks waiting. On one hand, there is the dilapidated existing infrastructure, and on the other, the rail network is supposed to be massively expanded at the same time. DB Cargo has been advertising for some time with the slogan: “Freight belongs on the rail,” which, in times of sustainability and climate debates, is particularly well received. One also reads here and there about success stories, but these are marketing actions, as the reduction of connecting tracks and the closure of railway lines, etc., always require trucks for the pre- and post-haulage. Often, such transports are also “subsidized.” Even with a massive toll increase on December 1, 2023, goods cannot be forced onto the rail, as certain goods simply do not belong on the rail, and such “coercive measures” are usually accompanied by an increase in rail freight rates.

“Freight belongs on the rail,” which sounds simple, is difficult to implement.

Alternatives and Outlook

What would the alternatives to a sale have been? There was the possibility of bringing part of DB Schenker to the stock market while Deutsche Bahn would have retained shares. The current state, another alternative, has apparently also been discarded. This would have at least provided certainty and perspective for the approximately 75,000 employees of the logistics company worldwide. Now, the big race for customers and employees begins, many of whom will embark on a “flight forward.” Once it is known who the buyer will be, it may be too late or the alternatives may dwindle. Given the much-discussed shortage of skilled workers in logistics worldwide, this is a bonanza for competitors. Various customers will also be considering their options.

“Crown Jewels” Are at Risk

In the end, it remains open what impact this will have on the global logistics market. But one thing is certain; it will keep the industry on its toes, and from today, the hunt is on, and perhaps the “crown jewels” will be gone before a buyer is found.

Photos: © Deutsche Bahn