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10 <strong>Deutsche</strong> bahn group Freight transport and logistics The economic recovery noted in the second half of 2009 accelerated in the first half of 2010 and had a correspondingly favorable influence on the international transport and logistics markets. The relevant markets for our business recorded substantially favorable development following the sharp decline seen in the first half of 2009. German freight transport market After taking into consideration the favorable influence generated by economic conditions on one hand, and the dampening effects the severe winter weather had on the construction industry on the other, coupled with existing preliminary data, we estimate that the volume sold figure for the entire market (rail, road, inland waterway transport, and long-distance pipelines) rose slightly in the first half of 2010. Figures for rail transport, which basically collapsed in 2009, recorded above-average growth as rail transport correspondingly improved its market position once again. The market’s pace of growth has accelerated significantly. Despite the reappearance of capacity bottlenecks in certain market segments, and a trend indicating rising freight rates, the market is still characterized by intensive inter- and intramodal competition as well as an unchanged low level of prices. Following the sharp drop noted for volume sold in the rail freight transport sector in Germany in the first half of 2009 due to the economic crisis, a significant rebound took place in the first half of 2010, with international transports performing slightly better than domestic transports. Performance still remained notably below the pre-crisis level despite the substantial increase. Non-Group railways, which had posted a relatively moderate decline in the first half of 2009, posted a comparatively slight increase in their volume sold in the first half of 2010. Our companies were able to record notably stronger development in the same period. The road freight transport sector was still experiencing a weak development at the start of the year as volume sold remained below the same year-ago level due to inclement weather conditions that dampened the construction industry, as well as notable declines in petroleum-based products, as well as lower figures for food and specialty food products. Due to the strong rebound seen at the end of the first half of 2010 it may be assumed that a slight increase has taken place. Foreign trade activities had a favorable impact and, above all, led to the strong growth of business for foreign-owned trucks, which dominate the cross-border routes. Despite the appearance of capacity bottlenecks in some segments of the market, competition remains extremely intense. Freight rates have not kept pace with rapidly rising cargo volumes. At the same time, cost pressures facing carriers have increased due to the sharp rebound in the price of diesel fuel since the start of 2010. It is estimated that volume sold noted for inland waterway transport were slightly higher than the same year-ago figures. This view is based on favorable economic effects, which have led to substantial gains especially for reception transports that more than offset the negative effects from weatherrelated restrictions. European rail freight transport Based on preliminary information, all of the major European rail freight transport companies, with few exceptions (state-owned railways in France, Italy and in some other countries), were again able to post notable gains following the sharp declines seen in 2009. Total volume sold in the European rail freight transport sector are estimated to have risen by a double-digit rate.
Chairmanʼs letter 11 Major events Interim Group management report Consolidated interim financial statements Volume sold in the rail freight transport segment in Poland expanded initially at the beginning of 2010, whereby this growth was solely generated by the state-owned PKP. Just as in Germany, the development of the iron and steel industries had a major effect on Polish results. Results recorded by the other TOCs have so far remained lower on a year-on-year basis. DB Schenker Rail Polska has maintained its level of performance. During the remaining course of the first half of 2010 the favorable effects generated by the economic recovery were offset by the serious effects of flood waters, which also impacted on rail freight transport. Coal and automobile transports were among the affected product categories. Even after the flood waters receded, work required to repair the infrastructure is still facing restrictions. In France, the third largest rail freight transport market in Europe after Germany and Poland, volume sold fell by nearly 20 % in 2009. Preliminary information indicated that no notable recovery took place in the first half of 2010. While our subsidiary company, Euro Cargo Rail SAS, Paris /France, was able to substantially increase its volume sold even further, it is estimated that state-owned Fret SNCF posted a further decline in their volume sold. Favorable economic effects were confronted with cuts in the availability of single wagons, as well as nationwide strikes. Development noted in the first half of 2010 in Great Britain was marked by the unchanged weak development of the traditionally very important coal transports, even though the important intermodal transport segment was able to rebound from the weak development seen in the first half of 2009. DB Schenker Rail’s UK volume sold remained below the same year-ago level. European land transport The economic recovery in Europe also led to solid year-on-year increases in volume transported in the European land transport market in the first half of 2010. The price level, which had fallen notably in 2009, is still, however, low. At the same time, the general increase in demand led to bottlenecks on various routes, which in turn meant that at least moderate price adjustments were again possible in some areas. This is offset by the fact that customers are generally refraining from asking for bids in order to keep the low level of 2009 prices intact for as long as possible. In addition, the unbroken level of very intensive competition is limiting the scope for price increases. Air freight Rising demand noted in the air freight market at the end of 2009 continued in the first half of 2010 and even strengthened further in some markets. It is estimated that the market grew by more than 20 % in the first half of 2010. Growth was particularly impressive in Asia, the biggest market, where it advanced at an above-average rate. Furthermore, the flights lost due to the volcanic ash clouds only slowed growth in the European market and did not stop it. Despite notable gains in all markets, airlines are being very cautious about bringing idled air freight capacity back to the market. This has resulted in demand rising faster than capacity as air freight space is only growing at a marginal rate, which in turn has already led to bottlenecks and rising rates.
Page 1 and 2: Deutsche Bahn Interim Report Januar
Page 3 and 4: chairman’s letter DR. RüDIGER GR
Page 5 and 6: Chairmanʼs letter 3 Major events I
Page 11: Chairmanʼs letter 9 Major events I
Page 15 and 16: Chairmanʼs letter 13 Major events
Page 59 and 60: IMPRINT CONCEPT, EDITING DEUTSCHE B

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