Until recently, if you took a train from Munich toward the eastern border with Austria, the chances of avoiding a collision with another locomotive relied in part on a signal station installed in 1899 when Kaiser Wilhelm II still ruled Germany.

Tucked inside the building, roughly the size of a small house, operators manipulated cumbersome levers and turned cranks connected by wires to switches and signals to prevent any combination that could direct two trains onto the same path.

Deutsche Bahn AG finally replaced the 126-year-old installation at Mühldorf am Inn with an electronic system at the end of last year. Yet in a sign of the gulf between Germany’s aging rail infrastructure and the increasingly intelligent trains running on it, nearly a fifth of the state-owned railway’s interlockings are still mechanical.

Closing that gap would free up much more capacity without the need for additional track, according to Siemens Mobility GmbH Chief Executive Officer Michael Peter. Digital signaling and automated driving could enable roughly 30% more trains to use the existing network by running them closer together and adjusting their movements in the event of delays, Peter told Bloomberg in an interview.

“That’s the big debate in Germany today: how do we increase throughput on the existing lines so that we have buffers again and can keep to the timetable better,” he said. “It’s all about punctuality and for that you need end-to-end technology.”The trains themselves increasingly resemble mobile computers. The flagship ICE express has about 1,000 sensors generating roughly 1 billion data points a day, Peter said. Siemens Mobility-managed fleets cover about 1 million kilometers (621,370 miles) daily — equivalent to nearly three trips to the moon — allowing software to monitor rolling stock and spot anomalous behavior before equipment fails.

Other advances from the firm include remote startups for locomotives, or trains that can automatically leave a depot and travel to their first station, braking on their own if they detect an obstacle.

Such technology could help smooth traffic flows around a network struggling with congestion and the delays that have long been a feature of Germany’s much-maligned rail services. Only just over half of Deutsche Bahn’s long-distance trains arrived within six minutes of schedule in September, with an average 6,831 infrastructure-related delays a day last year, according to the company.

By contrast, European nations like France, Spain and Italy, not to mention Austria and Switzerland, have high-speed rail networks with well-deserved reputations for efficiency and reliability.

Germany’s challenge is that smarter trains still have to operate across infrastructure accumulated over more than a century. The network contains around 100 different types of interlocking systems, complicating maintenance and making it harder to introduce one digital standard.

“We have far too many mixed-bag situations on the railroad when it comes to digitization,” said Dirk Flege, managing director of industry association Allianz pro Schiene. “There’s far too little standardization, far too few standardized interfaces.”Technology to upgrade the infrastructure is already available. Newer signaling tech could shift much of the safety logic now spread across local installations onto standardized processors in data centers. The equipment beside the tracks would remain, but software could centrally decide whether routes are safe and send commands to switches and signals.

A separate part of that digital railway is the European Train Control System, or ETCS, which tells a locomotive how far and how fast it may travel, replacing national systems with a common regional standard.

Automated Train Operation, a complimentary component of the umbrella European Rail Traffic Management System, can then control when a train accelerates, coasts or brakes.

AI could eventually coordinate many trains at once — slowing one because the track ahead is occupied, prioritizing another after a delay and recalculating traffic to bring the network back toward its timetable.

Germany has barely begun that transition. At the end of 2025, only 683 kilometers of the network’s more than 33,000 kilometers were equipped with ETCS.

By comparison, Switzerland has had the system across its network since 2018. Austria last month awarded framework contracts worth €2.6 billion ($2.9 billion) to modernize signaling nationwide, including about €1.3 billion for Siemens Mobility, a unit of Munich-based industrial giant Siemens AG.

Deutsche Bahn withdrew its previous ETCS migration strategy in summer 2025, saying the industry could not equip trains within the planned timeframe and that federal infrastructure funding remained uncertain. More than €10 billion from a €500 billion government infrastructure fund has since been earmarked for further rail digitization.

The transition is complicated by the need to upgrade trains and tracks at the same time. Some aging mechanical and relay systems are still being replaced by conventional electronic interlockings instead of the newer generation designed around standardized, networked systems.

The repercussions of failing to improve Germany’s rail system go beyond the issue of punctuality, according to Finance Minister Lars Klingbeil.

“Train delays today aren’t just an investment problem,” Klingbeil, who is also a co-leader of the Social Democrats, said last year.

“They have become a genuine problem for democracy in our country because people are losing faith that things in Germany actually work.”