ÖBB Annual Report 2025

Step by step into the future 28 The situation in goods transportation is particularly challenging. Here, the ÖBB Rail Cargo Group (RCG) is not only in competition with other rail logistics companies, but above all with road freight. At the same time, industry in large parts of Europe has been experiencing an economic downturn since 2023 – with direct consequences for the demand for rail transportation services. As a result, competition between logistics companies has gradually intensified in recent years as more providers are competing for smaller transportation volumes in a shrinking market. The trend in energy prices and the intensive construction activity on the railway infrastructure in Europe has brought additional pressure. Moreover, structural differences between the modes of transportation further influence competition. While rail companies pay comparatively high infrastructure charges and often have to work with different technical and regulatory requirements in the different European countries, cross- border road transportation is much easier to organize. In addition, truck traffic does not pay for the external costs it generates, such as the costs of congestion or accidents. Turning things around with Phoenix These conditions contribute to the fact that competition between road and rail is particularly intense in many areas – with corresponding effects on the 2025 result. Developments in the agricultural sector in particular had a negative impact as changes in international trade flows led to a significant decline in the demand for transportation. Unfortunately, this resulted in the Rail Cargo Group falling well short of its 2025 target. As a strategic response to the difficult market situation in European goods transportation, RCG has defined ten work packages in its “Phoenix” program covering various parts of the organization – both nationally and internationally. One focus on the market side lies on reviewing the current product portfolio. Connections that cannot be operated profitably given the current competition with road transportation are being discontinued or reorganized, while successful routes are being further developed. On the expense side, purchased services must be optimized, among other measures. For example, transportation services that are currently carried out in cooperation with partner companies can be internalized due to the current volume trends and once again handled within the company itself. The same applies to IT development services. By restructuring the organization, it should be possible to offer high-quality services at competitive costs. Innovation and digitalization also play important roles. Modern IT systems allow for a more precise design of transportation chains, better capacity utilization and more efficient The Rail Cargo Group faces particular challenges COMPETITION. In goods transportation, ÖBB is competing against other rail logistics companies and must also hold its own against road transportation