Combined Transport Reports a Decline in Freight Volume in 2023

Despite contrary announcements, the federal government continues to turn away from climate protection goals in the transport sector. This is particularly felt by rail and combined transport. This was stated by the management of Kombiverkehr KG during the announcement of the 2023 business figures.

(Frankfurt/Main) “Steadily rising track prices, the elimination of track price subsidies, and the federal government’s refusal to cover the additional burdens arising from the renovation of high-performance corridors are poison for the shift targets,” said Managing Director Armin Riedl. The 2023 financial year has already been challenging. Only 815,467 truck shipments (one shipment corresponds to the capacity of a truck) or 1.63 million TEU have been shifted from road to climate-friendly rail. The reasons for the overall decline in traffic of 15.9 percent, the current shipment development, new traffic, IT projects, and especially the risks in service procurement starting in 2025 were reported by the supervisory board and management during today’s shareholders’ meeting.
The positive trend in shipment development from previous years could not be repeated by Kombiverkehr KG in the 2023 financial year. With a total of 815,467 truck shipments (one shipment corresponds to the capacity of a truck) or 1.63 million TEU, a total of 15.9 percent fewer containers, swap bodies, and semi-trailers were transported compared to the previous year. Within the two business areas of national and international transport, the shipment volume was 186,856 truck shipments (-10.1 percent) and 628,611 truck shipments (-17.5 percent). “Nevertheless, we have managed to largely survive the crisis year without significant damage to the substance of the company. In close cooperation with our service partners, we have maintained the train program without major restrictions through intelligent network management,” commented Managing Director Armin Riedl on the company’s development last year. The company generated 435.2 million EUR in revenue from its intermodal transport activities. Compared to the previous year, this was 27.5 million EUR less. After deducting all taxes, a net loss of -332,000 EUR was incurred in the 2023 financial year.

Unpredictable Performance Quality of Railways

The struggling economy in Germany and Europe, with extensive production declines, affected shipment development just as much as the often unpredictable performance quality of the railways. This did not reach the level necessary for satisfactory intermodal transport execution, particularly due to construction measures on German infrastructure. In the summer of 2023, punctuality rates of around 70 percent were temporarily achieved in some weeks. However, in spring, autumn, and winter, the performance level was significantly below this mark, with monthly averages below 50 percent. “We are more than dissatisfied with this performance quality. Because planning on the part of the freight forwarders remains extremely difficult. Better reliability can only be achieved on their part through more use of equipment and personnel. In order to still participate in combined road-rail transport, freight forwarders and transport companies bear the associated additional costs themselves. This simply cannot and must not be the case,” appeals Managing Director colleague Heiko Krebs to politics, which continues to be called upon to support the users of the combined transport system.

Rising Procurement Conditions Across the Board

Increased procurement conditions for traction services and higher production costs for railway companies due to diversion traffic further complicated the framework conditions in the past financial year. Additionally, there were months-long strikes in France, tariff disputes between EVG or GDL and Deutsche Bahn, the closure of the Gotthard Base Tunnel, and the halving of track price subsidies at the end of 2023. “The challenges for operators and freight forwarding customers were and remain diverse. Therefore, we have little understanding for the reduction of track price subsidies in these times. A targeted promotion to significantly increase the market share of rail in terms of CO₂ savings thus loses efficiency,” commented Krebs on the measure of the Federal Ministry of Transport.

Transport Volumes Stabilize

In April and May 2024, Kombiverkehr recorded an increase in volume and surpassed the shipment level of the previous year on some routes. “We are seeing an improvement in demand for the first time and, due to a comprehensive train offer, an overall stabilization of transport volume,” Riedl explains. “However, the transport industry is still lacking orders from industry. There are, however, first slight signs that the German economy may now be at an economic turning point. Our outlook for the near future is therefore cautiously optimistic, and we continue to fight with our partners for better conditions in our transport segment so that initial trends towards more growth are not nullified again.”

Challenges: Track Prices, Corridor Renovations, and Changed Service Procurement

In combined transport, the development of production costs will remain challenging in the coming years, especially in light of the planned corridor renovations. By 2030, a total of 40 sections are to be completely overhauled. “The financial impacts on railway companies, operators, and freight forwarders have recently been quantified. ‘That only passenger transport is financially subsidized in the question of additional burdens arising from the renovation of high-performance corridors while freight transport is left empty-handed is another indication that the federal government has likely turned away from climate protection in the transport sector,’ says Krebs. The same applies to the increase in track prices in 2025 by more than 16 percent while simultaneously halving the track price subsidy from the federal government. Both measures together lead to a doubling of costs for track usage, which puts additional pressure on combined transport, especially in economically difficult times.

For the 2025 financial year, Kombiverkehr expects a significant increase in expenses for services rendered, caused by a major provider. “We are therefore forced to seek alternatives, which can fundamentally succeed but is difficult to realize in a very short time frame. For the vast majority of transports, this is manageable. However, at this point, there is still a need to find market-compliant and also viable solutions for Kombiverkehr for about one-third of the shipment volume in the short term,” describes Riedl the current situation. “If this does not succeed, we will, in the worst case, have to suspend traffic,” Riedl also points out the consequences for the transport sector. “We have discussed this matter several times with the Federal Minister and his department. We have called for support for a transitional period. Unfortunately, all efforts have so far been unsuccessful. The federal government’s shift target is thus moving further out of reach.”

Complete “Digital Customer Journey”

By connecting freight forwarding customers to both web-based portal solutions and B2B interfaces, Kombiverkehr is driving digital transformation and standardizing business processes and information flows in transport processing. “Compared to other industrial sectors, combined transport has a significant peculiarity: To successfully organize and operate the transports, a multitude of companies must reliably inform and cooperate with each other. Combined transport is therefore inherently a cooperative product, and we are working on common industry goals to exchange data at a consistently high quality level,” says Heiko Krebs. “We have set ourselves the goal of developing Kombiverkehr into a ‘Digital Operator’ and realizing a fully ‘digital customer journey’ that improves the simplicity, efficiency, and reliability of combined transport. We work on this every day.”

An example of this is the new data hub KV4.0, which has been in operation since March 2023. It is marketed jointly with partners through the company DX Intermodal. First large freight forwarding customers are already successfully using the new platform, with many more in technical preparation. The basis is the EDIGES 4.1 data exchange format. Meanwhile, all transport information exchanged is known from CESAR-Next. Through the web-based portal meinKOMBIVERKEHR, more than 2,000 users are now working digitally with Kombiverkehr. Since the go-live in March 2023, the portal has been expanded to include email services, a dedicated area for terminal fees, a construction site preview, and delivery and release codes. In addition, the company is committed to automating terminal access with the aim of further accelerating terminal throughput times through the use of modern digital technologies.

New Traffic from and to Benelux and Southeast Europe

With new train offerings, individual transport areas are to be sustainably expanded. For example, the Benelux traffic. With the newly established route Cologne-Eifeltor – Rotterdam RSC v.v. in March 2024, the KV operator is further exploiting its network advantage. Cologne-Eifeltor is one of the largest hub terminals in Germany with numerous national and international forwarding options, for example, to and from France, Spain, Italy, Slovenia, and into Turkey and Greece. In early autumn, a new direct connection between Belgium and Spain is also set to complement the train schedule to and from Benelux. In the traffic to and from Southeast Europe, Kombiverkehr has expanded transport services to and from Serbia with the network integration of the terminal in Niš. At the same time, the company is repositioning itself from this central location directly on the pan-European transport corridor 10 for network expansion into other Southeast European countries.

Freight Forwarding Customers Have a Significant Share

The total volume transported on Kombiverkehr trains decreased from 22.87 million gross tons in 2022 to 19.11 million gross tons in the 2023 financial year (-16.4 percent). Freight forwarders and logistics companies that have used the company’s intermodal offering to transport their trailers, containers, and swap bodies have relieved the highways by more than 678 million vehicle kilometers and 15.89 billion ton kilometers, with an average transport distance slightly increased from 830 to 832 kilometers. They all made a significant contribution to achieving the climate goals within the framework of the European Green Deal. With more than 3,200 daily trips on the environmentally friendly rail, emissions of 1.19 million tons of harmful greenhouse gases were avoided over the course of 2023.

Photo: © Kombiverkehr