Logistics And Frieght Forwarding

DB Cargo plans to cut 893 jobs in face of ‘unprecedented’ market changes

UK: Deutsche Bahn subsidiary DB Cargo UK has announced changes to its business model and proposals to eliminate 893 roles in response to what it says are ‘rapid and unprecedented changes’ in the freight market. The measures announced on October 17 include revising of the number and locations of operational sites, and further reductions in the locomotive and wagon fleets. No final decisions have been taken, and all proposals are subject to collective and individual consultations.

The company said the rail freight industry was facing a ‘dramatic decline’ in core markets such as coal. Government energy policy had resulted in the early closure of coal-fired power stations, with reduced running hours planned at those which remain from 2023 and complete phase out of all UK coal-fired power plants is planned by 2025. In the first nine months of 2016 DB Cargo UK ran 1 353 coal trains, a 78% reduction on the 6 163 in the same period in 2015.

UK steel volumes are also dropping at a much quicker rate than predicted, with the industry hit by high energy prices, the extra cost of climate change policies and competition from Asia. DB Cargo UK said there was ‘significant structural instability’ in the UK steel manufacturing sector, with closures and reductions in capacity. The number of steel trains run by DB Cargo UK in the first nine months was 5 820, down 33% from the 8 733 for the same period in 2015.

However, the operator recognised that ‘overall UK steel demand remains stable’, adding that it was ‘continually exploring opportunities for growth within this important market sector’. ‘Responsible and successful businesses must evolve and reshape as their markets change and sometimes this means making tough decisions’, said DB Cargo UK Chief Executive Hans-Georg Werner on October 17. ‘Whilst this is a difficult time for all of us at DB Cargo UK, reshaping the company will enable us to build a business for the future and protect the majority of jobs. We are fully committed to supporting colleagues who may be at risk of redundancy.

‘We firmly believe in the future of rail freight in the UK. Our motorways and roads are becoming more congested and rail offers fast and clean supply chain solutions. Our new business strategy will ensure we are a perfect logistics partner of choice for customers across all sectors, including construction, automotive and intermodal, long into the future.’

DB Cargo UK said it was ‘proactively investing in key areas’, including the rollout of mobile devices to front line and management staff, and the launch of interactive applications to improve fuel efficiency.

It plans to further enhance efficiency and service levels for its customers by introducing order-track-and-trace, end-to-end planning and proactive and pre-emptive service issue systems and technology.

Responding to the announcement, Mick Cash, General Secretary of the RMT trade union, said ‘this is devastating news brought on through a combination of cut-throat practices in the UK rail freight industry and a shocking lack of government support for this key section of our transport infrastructure.’ He said RMT’s executive would be meeting to consider its response, but ‘it is imperative right now that the government intervene to save skilled jobs in the rail freight industry which are being butchered before our eyes due to a lack of action to protect steel, coal and the rest of our manufacturing base.’



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