Strikes on Deutsche Bahn add to German logistics problems

DB Group reported its half-year results with total Group revenues of €21.8bn, up 12.2% compared with the same period in 2020.

More problems for Deutsche Bahn and Germany… The workers of the EVG union (Eisenbahn und Verkehrsgewerkschaft), that represents a number of different types of employees in Deutsche Bahn, staged a one-day strike over pay and conditions.

The effect was to bring much of the rail network to a halt, especially cargo services but also long and short distance passenger operations. By late on Monday the workers had ended their industrial action and Deutsche Bahn’s described the condition of their network as stable, however some effects are expected to continue into Tuesday and Wednesday.

Rather ominously the action was described as a ‘warning strike’, with the union making it clear its action is designed to run alongside negotiations with Deutsche Bahn. Amongst other demands, the union is asking for a 7.5% increase in salary for its members. Deutsche Bahn has offered 5.1%. It also appears that in addition to issues around wages there is a general sense that the workforce is suffering from the state of the rail system which is perceived to be lacking in investment.

Combined with the issues on the Rhine, the German freight transport system is suffering problems. The effects of the former have been seen in the chemical producer BASF’s profit warning issued this week. It was due in part to interruptions in production caused by the restrictions in freight on the Rhine. Problems on the railways can only compound such issues.

In terms of the wider macro-economic picture Germany is facing questions over both the labour situation in the economy and the effectiveness of its infrastructure. Somewhat higher demand in the economy has changed the balance of both over the past few of years, after a couple of decades of deflationary conditions that drove down real wages and led to lower levels of capital spending. Deutsche Bahn is at the centre of this issue. It needs higher investment and re-invigorated direction if it is to match the logistics demands of its freight customers. Whether Germany is up solving such questions is unclear.

Source: Transport Intelligence, December 11, 2018

Author: Thomas Cullen