Monday 24th Oct 2016 - Logistics Manager

German railways buys EWS

Deutsche Bahn, the German state-owned rail operator, is to buy EWS. It is also taking a majority stake in Spanish operator Transfesa.
The move will give DB Logistics direct links to the transport and logistics markets in Western and Southern Europe and will thus strengthen the south-west corridor. The integration is intended to lead to a noticeable boost in rail’s market share in Europe. Deutsche Bahn believes DB Logistics, EWS and Transfesa complement each other ideally, especially in the rail logistics, automotive, industrial and bulk goods segments.

Deutsche Bahn chief executive Hartmut Mehdorn (pictured) said the de facto liberalisation of the rail network was a crucial requirement for growth and economically efficient operations. Germany was a perfect example of how open access to the network, which is used by more than 330 rail companies, could lead to a substantial increase in rail traffic, and added that DB would continue to encourage European liberalisation in future, he said.
EWS is the largest rail freight operator in Britain, providing a range of freight, engineering support and hire services. It has sales of some £500m a year and operates more than 1,000 freight trains a day accounting for 70 per cent of all rail freight in Britain. It also operates services to mainland Europe through the Channel Tunnel, and recently expanded into France with a rail freight company called Euro Cargo Rail.
EWS, based in Doncaster, was formed in 1996, following the privatisation of British Rail’s rail freight divisions. Over the last eleven years, rail freight in Britain has grown by 60 per cent. It is currently owned by a consortium of investors from the UK, North America and New Zealand.
EWS chief executive Keith Heller said: “We can build on the platform we have created in the UK and France for rail freight growth, offering our customers a comprehensive European rail freight network. This agreement between DB and EWS will allow greater volumes to be moved by rail.”

DB Logistics hopes the EWS acquisition will improve its business position in France, where EWS is already represented by its subsidiary Euro Cargo Rail. At the same time, Deutsche Bahn says it aims is to continue its close cooperation with SNCF, which is already successful in the single wagonload segment, and win a higher volume of transport for rail by offering attractive products.
The Euro Cargo Rail business was launched in October 2005 becoming only the third rail freight operator in France. It targeted new services on a number of routes in northern France, particularly on routes to and from the French border, such as the Calais to Tourcoing, and Calais to Dunkerque rail routes.
Deutsche Bahn is a major player in the logistics market. Its logistics division has annual sales of some £11billion through brands such as Schenker, Railion and Intermodal. It is the European market leader in rail freight as well as being among the leaders in the road, air and sea freight markets.
Railion, Deutsche Bahn’s rail freight business, has sales of some £2.3bn. It has 25,000 employees serving 3,300 customer sidings in Germany alone.
The Railion Group consists of Railion Deutschland, Railion Nederland, Railion Danmark and Railion Italia focusing on block train, single freight car and combined transport segments, principally for bulk freight for the iron and steel, chemical, mineral oil, fertiliser, agricultural and forestry products, consumer goods, building materials and waste disposal sectors. 
The European rail freight market has been open to competition since 1 January 2007 and Railion has been looking to exploit the opportunities offered by a liberalised market.
It already provides cross-border rail freight services from a single source, operating 100 freight trains non stop across the European continent daily.
Norbert Bensel chairman of DB Logistics said: “The expansion of our Europe-wide network is our answer to the increasingly complex demands of our customers. EWS and Transfesa will enable us to close important gaps in the DB Logistics rail freight network. As a result, we shall be better equipped in future to offer our customers attractive products.”

Deutsche Bahn’s land transport, air and ocean freight, contract logistics and supply chain management business units operate under the Schenker brand. The combined transport business is an independent business unit operating under the Intermodal brand with a clear focus on seaport hinterland transport services and the main continental transport corridors.
At the end of 2005, Deutsche Bahn bought Bax Global, the US-based freight forwarding and logistics business from The Brink’s Company for £623m in cash. This has now been merged into the Schenker business.
Madrid-based Transfesa has a fleet of 7,900 special wagons which are equipped with interchangeable axles enabling them to transit trough Europe’s different rail widths eliminating the need of freight transhipment. It has sales of some £180m a year.
Over the past ten years, Transfesa has developed its intermodal transport services and built its own fleet of more than 2,000 swap-bodies. Its road-based transport services are increasing and it now has 250 trucks and 270 trailers of its own as well as sub-contracting work.