DB Cargo and Toshiba enter into cooperation agreement

Jan 10, 2017: DB Cargo has signed a cooperation agreement with Toshiba, one of the leading Asian suppliers of rail vehicle technology. The agreement involves a feasibility study for the joint development and subsequent purchase of an initial 100 new hybrid locomotives by DB Cargo.

The hybrid vehicles will be used in regional transport operations and, in addition to a significant reduction in diesel consumption and lower maintenance costs, will raise the average fleet availability.

The first test vehicles are expected to be available by the end of 2019. The partners agreed not to disclose the purchase price.

Toshiba is also a member of a partner consortium lead by the Munich locomotive leasing company RailPool (a subsidiary of OAKTREE and GIC) which will take over older Class 151 and 155 freight locomotives belonging to DB Cargo AG into an asset pool, with the aim of making use of these resources in the form of a capacity leasing model. The asset pool will contain 200 locomotives and give DB Cargo the chance to lease locomotive capacities efficiently in line with changing demand.

“The objective is to promote the development of the supplier market for freight locomotives and components in cooperation with Toshiba. This will provide DB Cargo with access to sunrise technologies that are not currently available in this form in our home market. In return, we – as the largest rail freight operator in Europe – can pave the way for Toshiba to enter the European market. In other words, this is a classic win-win situation,” said Jürgen Wilder, chairman of the Management Board of DB Cargo.

As part of its asset management activities, the consortium has thus also created the first market for used rolling stock which will enable it to lease locomotive capacities flexibly and at short notice. Deutsche Bahn will remain responsible for maintenance of the locomotives.

DB Cargo’s fleet of switching locomotives has an average age of 40 years, which means they will soon have reached their maximum service life. DB Cargo has therefore opted for innovative hybrid technology at an early stage to cover its replacement requirements and at the same time to accumulate its own expertise in maintenance and repair.

With this collaboration, DB Cargo seeks to overcome obstacles such as slow pace of innovation in the rail freight business, low competition and eventually, make the European market for rail vehicle technology a more attractive proposition for the future.