Deutsche Bahn is focusing solely on Strong Rail
Management Board presents new strategy to Supervisory Board • DB Group aims to double patronage and make a major contribution to meeting climate protection targets in Germany • DB CEO Richard Lutz: "We are committed to fulfilling our responsibility to society" • Massive efforts now needed by DB, the rail industry and policymakers
The Management Board of Deutsche Bahn AG has presented its new "Strong Rail" strategy to the Supervisory Board in a day-long extraordinary meeting. In the future, the company will focus on consistently upgrading its core business. "Germany will only meet its climate targets if we succeed in shifting traffic to rail on a massive scale over the next decade," said DB CEO Dr. Richard Lutz. "Germany needs Strong Rail: for the climate, for people, for the economy and not least for Europe. DB acknowledges the responsibility we bear in society and we are focusing all of our efforts on building a strong rail system." The extraordinary meeting of the Supervisory Board was held in the Kaiserbahnhof in Potsdam and concluded on Tuesday evening.
Late last year, the DB Management Board introduced its "Agenda for better rail service" program, which was designed to increase capacities, raise quality and punctuality and improve customer satisfaction. The new overarching strategy, Strong Rail, will now provide a larger framework that makes it clear what the DB Group stands for and what direction it will take in the future. The new strategy tackles key transport and climate policy targets of the German government.
According to the company, these ambitious goals can only be achieved if Deutsche Bahn, the entire rail industry and policymakers tackle it together. In the coming months, important decisions will have to be made to implement these ambitious projects, including concerning the new Performance and Financing Agreement (LuFV III) that will come into force in 2020. Here, progressively digitalizing Germany's rail network will play a key role, as will building new lines and upgrading existing ones.
Supported by digital technology, the Group will consistently aim for growth in both passenger and freight transport in the coming years. DB will invest tens of billions of euros in new trains and increase operating performance on the network by 30%. In addition, more than 100,000 new employees will be hired in the next few years alone. Deutsche Bahn has also advanced toward its goal of using 100% renewable energy and will reach it already in 2038, far ahead of its original goal of 2050. The 173-page "DB's overarching strategy: Strong Rail" will replace the DB 2020 strategy that had been in place since the beginning of the decade.
The aim is to make DB more robust, more powerful and more pioneering.
"Our Strong Rail strategy will provide direction for our actions," said Dr. Richard Lutz. "But of course it is clear that a strong rail network has to be linked with other modes of transport and has to take an international perspective, since our passenger and freight customers' expectations don't stop at our own borders and can't be fulfilled with rail services alone. We will assess our major shareholdings based on how they can contribute to building a strong rail system. DB Schenker strengthens our European rail freight transport business and is thus an integral part of our Group portfolio."
The ten core messages of the new strategy at a glance:
1. Germany's climate targets can only be met with Strong Rail.
No other mode of transport is as eco-friendly or as strong in electric mobility. If we want to meet Germany's climate targets, traffic needs to be shifted to rail on a massive scale. That's why Deutsche Bahn is making an additional significant contribution to reducing CO2: Although DB had originally planned to achieve 100% of traction power from green sources by 2050, it will reach this goal already in 2038.
2. Strong Rail focuses on DB's core business.
The Strong Rail strategy and its implementation serve to guide DB into the future. DB will consistently assess its shareholdings based on their contribution to Strong Rail. As such, DB Schenker is viewed as providing key support to DB Cargo on its path to profitable growth. DB Arriva has little strategic relevance to building a strong rail network and should thus be sold.
3. Long distance transport will double its patronage.
DB's long distance transport will double its number of passengers to over 260 million per year. This will take an enormous amount of effort, but the addition of more direct connections and more frequent trains will help to meet this goal. When it is implemented, over 30 major cities will enjoy twice-hourly connections between cities in Germany.
4. DB will add one billion new regional and local passengers.
DB plans to add over one billion regional and local rail passengers by strengthening its local rail services and integrating new forms of mobility. To reach this goal, it will also be introducing smart services for transport in cities and particularly in rural regions.
5. DB Cargo will raise its rail traffic volumes in Germany by 70%.
The goal for DB Cargo is clear: to increase traffic volumes in German rail freight transport by 70%, for example by purchasing more than 300 new locomotives. DB Cargo still has a long and arduous period ahead to achieve this turnaround. However, DB is determined that Cargo will make a contribution to climate protection, specifically by increasing its market share in rail freight transport from the current 18% to 25% in a growing market. DB is also working with policymakers to find an economically viable, sustainable solution for single freight car transport, for example by investing in modernization and making it easier for customers to access the rail network.
6. DB will work with the German government to expand rail network capacity by 30%.
To be able to handle the growth in passenger and freight transport, DB will add 350 million train-path kilometers (t-p km), a 30% increase in capacity, to the German rail network. This will be achieved by upgrading the system, utilizing technological innovation and digitalization, and through more efficient use of existing capacity. Capacity-friendly construction will play a key role here.
7. DB will enter a new era with Digital Rail for Germany.
The kick-off packet of DB's Digital Rail for Germany Group program will help the company enter the digital era in rail operations. This represents a technological quantum leap and will improve capacity, quality, reliability and efficiency.
8. DB's stations will become hubs for state-of-the-art mobility.
Stations will be hubs of multimodal mobility and the center of life in the city. The goal is to double station capacity to host up to 40 million guests a day and to create seamless transitions between rail travel and travel by bike or bus or using new mobility services (carsharing, e-scooters, etc.).
9. DB will hire 100,000 new employees in the coming years.
DB is hiring at a time when most major companies are reducing their headcounts, and doing so on a massive scale. Over the next few years, some 100,000 employees will need to be recruited, trained and integrated for DB to reach its ambitious goals.
10. DB will have more trains and offer more connections than ever before.
DB is aiming to raise seating capacity in passenger transport by up to 100% by bringing the total number of trains in its long distance fleet up to 600, with a focus on investing in new high-speed trains. In addition, seven million more people, and therefore some 80% of the German population in total, will have access to the long distance network. This major jump in access will be achieved by linking more small and medium-sized cities with connections at least once every two hours. DB will also work with the client bodies to modernize nearly 1,000 trains in regional and local transport, enabling them to transport up to 12% more passengers.