Production and technology
If the production quality of passenger transport services (in particular punctuality) suffers, this has an impact on service quality and can lead to the loss of customers. In rail freight transport, too, punctuality is a key factor for our customers when selecting a mode of transport.
Due to the condition of the infrastructure or as a result of unknown weaknesses in the condition of facilities, unplanned maintenance measures are possible (e.g. ad-hoc bridge repairs or replacement of defective concrete ties). This can lead to higher costs and restricted speed sections.
The availability, capacity and the condition of the track infrastructure are significant prerequisites for a competitive rail transport. To ensure that rail remains fit for the future in the long term, it is also necessary to digitalize and automate the infrastructure. The intensity of use on the German rail network has increased significantly. The capacity of the track infrastructure has not been expanded in line with growing demand. At the same time, the condition of the infrastructure has deteriorated. Construction is being carried out at a very high level to drive modernization. However, this construction work requires the sacrifice of additional capacity while the work is in progress. As capacity utilization increases, the effects of traffic jams and delays are increasing exponentially. The intensity of construction activity in the network has already increased noticeably and is expected to continue to increase. This can also have a pronounced impact on the operating programs and the production quality of the carriers, which cannot be compensated for in some cases. Due to the implementation of the planned extensive general modernizations, the impact on performance and revenues may exceed the level included in planning. In addition, further expense risks may arise as part of the implementation process. Overall, a general risk is a loss of competitiveness. A key component in facing the competition is improvements in service quality. To this end, we are implementing the S3 restructuring program within DB Group and a transformation program at DB Cargo. Digitalization offers key opportunities for improving performance:
- more efficient and customer-focused processes,
- improved and new digital services, and
- easier access with online portals and apps.
The range and quality of our services depend to a significant extent on the availability and reliability of the production resources used, intermediate services procured and the quality of our partners’ services. We therefore maintain an intense dialog with our suppliers and business partners on the subject of quality. This is of particular importance in the vehicle industry. Postponed deliveries of new vehicles may result in revenue losses and additional expenses, such as due to rail replacement services or penalty payments.
Sufficient availability of our vehicle fleet is particularly critical. Significant restrictions endanger operating schedules. In regional transport, there is the additional risk of penalties if trains are canceled or punctuality is insufficient. We try to minimize this risk by taking preventative actions and also by minimizing the consequences should it happen, such as by providing replacement vehicles or by organizing substitute services.
The technical production resources used in rail transport must comply with applicable standards and requirements, which are subject to change. As a result, we may receive technical complaints concerning our vehicles. This leads to the risk that we may only be permitted to use individual series or rail car types under certain conditions, such as limited speeds, shorter intervals between maintenance or reduced wheel set loads, or not at all. In addition, we cannot accept new vehicles that have defects or for which the necessary vehicle certification has not been granted. As a result of technical defects or conditions, vehicles may need to be refitted, which could lead to significant restrictions on availability or even temporary prohibition of use.
In regional transport, a risk can arise from the redundancy of vehicles following the expiry or re-tendering of a transport contract. As a countermeasure, alternative possible uses are investigated.
Increasing digitalization means that dependence on secure IT that is available around the clock is increasing. This results in potential information security risks, including cyber risks such as the interruption of the availability of IT/OT systems, which can lead to serious business interruptions, or unauthorized access to customer data by third parties.
We counter this with forward-looking information security management that ensures the necessary protection of information-based business processes. Risk management for information security is a key tool in achieving this. The relevant information security risks are identified, analyzed, evaluated and reduced by way of appropriate measures. They will also be documented and, if necessary, reported to the relevant authorities and monitored. Our information security management is based on international standards and is ISO 27001/27002 certified in various scopes at individual companies.
In order to minimize critical technical vulnerabilities, numerous countermeasures (such as firewalls, encryption, appropriate network segmentation and prompt software updates) have been implemented. Appropriate redundancy of the IT systems (including across several locations) increases the overall resilience of critical business processes, applications and infrastructures. The network and cloud infrastructure also has a redundant design, where required, for the purposes of IT security and business continuity. For the most important processes and IT applications, systematic and regular penetration tests and red-team stress tests are carried out in order to detect and eliminate weak points at an early stage.
Overall, these measures are intended to reduce, but cannot altogether eliminate, the risk of successful attacks, the resulting outages of IT/OT systems, the disruption of communications and the theft of confidential information.
Irregularities, such as customs offenses and theft, can occur in freight transport. We combat this, among other things, by involving qualified customs coordinators and using an immediate reporting system for tax assessment notices.