The German rail freight operator DB Cargo is one of the hot topics in the industry. Besieged by EU law, but mostly also hindered by its own inefficiencies, the company has set out to become profitable in 2026. How is DB Cargo now developing? A look at finances, business development and rolling stock.
DB Cargo is on a tight deadline to become profitable. It has to do so before the end of the current year, or otherwise the operator’s future looks very shaky. RailFreight.com wrote an explainer about the situation earlier.
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.