German industries brace for record six-day rail strike starting Jan 23

German train drivers' union GDL has announced what promises to be the longest rail strike on record for state-owned Deutsche Bahn, threatening more disruption for the country's industrial players.

In a Jan. 22 statement, the GDL called for cargo strikes from 6 pm German time Jan. 23, to be followed by all other rail services Jan. 24 and end Jan. 29.

The GDL and Deutsche Bahn, the country's largest rail freight operator, have been in deadlock since November over wage disputes and calls for a reduced working week, producing three rounds of strikes to date.

Union boss Claus Weselsky previously told German media that action beyond 3-5 days would be avoided out of concern for the economy, yet a "bogus" wage offer from DB last week appears to have raised the stakes.

"Deutsche Bahn AG has once again shown that it is undeterred in pursuing its previous course of refusal and confrontation; there is no trace of the will to reach an agreement," said GDL in a statement.

An extended disruption could threaten logistics of the country's refineries, power plants, and steel producers relying on inland connections for their operations, and adds to uncertainty around the country's economic health after a 0.3% contraction in GDP over 2023 was announced last week.

In previous strikes this January, a spokesperson from Deutsche Bahn said the company would prioritize "supply relevant trains" while operating skeleton timetables, but warned that the activity would quickly impact vital trade routes.

A spokesperson for the group told S&P Global: "The six-day GDL strike is above all a strike against the German economy. A 144-hour strike has a direct impact on industrial supply chains and disrupts them in the long term."

The spokesperson added that large-sale industry could face a particular threat without access to a DB's cargo network spanning 4,000 access points and nine large freight stations in Germany and often delivering goods direct "to the yard."

According to German Federal Statistics Office data, railway transport accounted for around one-fifth of total freight transported in 2021, making rail links vital to access domestic and European markets.

In the last round of strikes, sources flagged disruption to normal oil product and petrochemical supplies over a three-day period, although healthy inventories provided a buffer.

For the oil sector, the country's southern refineries are particularly dependent on railway freight, including Gunvor's Ingolstat and Shell's Rheinland, alongside Hamburg in the North and Gelsenkirchen in the West. Together, these refineries have some 814,000 b/d production capacity.

Gasoil, LPG and marine fuel oil were among the products experiencing delays earlier this month, but sources have cautioned that renewed strikes over a longer period could prove more disruptive.