Cheaper than new infrastructure

The technology would allow for bogies to automatically increase or decrease their width when the rail gauge changes. Ukraine has the same rail gauge as Russia (1520mm). The idea of implementing a standard gauge (1435mm, like most of Europe) was already in the air, but the war intensified the need for solutions. Given the high costs of building new infrastructure, variable gauge bogies gained in popularity.

Spain also has a different gauge compared to the rest of Europe (1600mm) and has been working on variable-gauge bogies since at least 2014. Thus, their expertise could prove significantly useful for Ukraine and its rail freight sector, which is in desperate need of new connections towards the West. Possible cooperation between the two countries was first explored in the summer of 2023 with the signing of a MoU in March 2024.

The wagons belong(ed) to Russian companies and individuals that are now sanctioned. These include VEB-Leasing, JSC State Transport Leasing Company, JSC Nord, as well as other Russian companies in the field of finance and logistics, the Ukrainian government specified.

Despite these challenges, the service, operated through a partnership with Ukrainian Railways and its Polish branch UZ Cargo Poland, provides Lviv with a connection to Hungary and then the rest of Europe. And this is just the beginning, it seems. “We plan to expand this service to additional cities in Ukraine as demand develops”, she added.

‘All terminals should be equipped’

Mirzojeva also analysed what needs to be done to make this sector even more popular. “Three key elements are essential: competitive pricing, supportive policies and terminal capabilities”, she pointed out. The first two are needed to make rail financially competitive with other modes, especially road freight. Whether it is governmental subsidies or stricter emission standards, there are plenty of initiatives that could improve the situation.

Regarding terminals, “Hungary already has a strong foundation”, Mirzojeva said, “several intermodal terminals operate efficiently”. However, there remains room for improvement, especially in the context of semi-trailer transport. “All terminals along the route should be equipped to handle both craneable and non-craneable semi-trailers”. This factor is “crucial for smooth and efficient intermodal operations”, she concluded.

The system used to load the non-cranable semi-trailers onto the rail wagons is the r2L Connector, developed by VEGA and VTG, the most common for this type of operation in Europe. Semi-trailers are driven onto a platform that can be lifted and moved on the train. For example, the r2L system is also deployed for the connection between Mostyska, west of Lviv, to Forst, in Germany.

Ukrainian Railways orchestrated the convoy’s continuation to Kyiv. “The operation required exceptional logistical mobilisation,” according to RLE, who noted that teams worked in shifts to quickly classify and allocate routes, obtaining special transport permits in just a few days while ensuring the security of the transport from France to the Ukrainian border.

The steel industry has also spoken out against UZ’s plans, warning of a modal shift to the road. Even the European Business Association stepped into the discussion – imploring UZ not to raise their freight charges and pointing to passenger services as the real financial “drain”. By contrast, UZ insists that a tariff increase is necessary. It refers to higher prices for electricity, diesel, spare parts and more.

The long and heated public discussion may now end in a new consensus. “We understand that the tariff increase is inevitable, it will happen”, said Deputy Chairman of the All-Ukrainian Agrarian Council Mykhailo Sokolov recently. Rather than slapping an additional 37% on existing rates, UZ is floating another model that is being met with cautious optimism by the agricultural sector.

Cautiously positive

“We are open to dialogue on the model”, commented UZ CEO Oleksandr Pertsovsky during the ‘Doing Agribusiness in Ukraine 2025’ event according to publication Latifundist. “But strategically we seek to move to unified tariffs that depend exclusively on transportation technology, not on the class of cargo, to introduce a transparent formulaic mechanism of annual indexation to ensure predictability for the market.” In other words, UZ no longer wants to differentiate between freight types and charge a single tariff across the board.

“The agricultural community understands that the tariff revision is expected, but the market needs clear rules of the game”, reacts Oleg Khomenko, general director of the Ukrainian Club of Agricultural Business. “It is necessary to transform the tariff formation system into a transparent and productive model, where the cost of services will be based on real cost, and disparities between industries and cross-subsidisation will be eliminated.”

Cross-subsidisation here refers to UZ’s practice of transporting some freight below the cost price. According to Mykhailo Sokolov, the company moves construction materials while making a loss on it, which is then compensated for by profits in other areas, such as agricultural transports. A unified tariff for all freight types would eliminate that disparity.

A careful positive change of tone among the agriculture representatives could signal that there could be a breakthrough in the near future. Deputy Minister of Economy, Environment and Agriculture Taras Vysotsky has also expressed his support for the unified tariff system: “It seems to us that an approach to, albeit gradual, convergence of tariffs and indexation according to the cost structure, rather than proportionally, is a logically correct long-term solution.”

Nevertheless, prices will go up

That is all when it comes to the pricing model – generally met with positivity, at least by UZ, agriculture and the government. However, Reuters reports that UZ is planning to increase the overall freight rate by 27% starting 1 January. It seems that this is not yet set in stone, but a significant increase seems inevitable as the operator’s budget gap would grow to some 728 million US dollars without pricing changes.

Transport Community has published two separate reports, detailing the progress made in the Western Balkans, including their “Next Generation Rail Action Plans”, and in Ukraine, Moldova and Georgia. The organisation thus details the rate of transposition of EU law, but also progress made on broader action plans. Those include not only transposition of laws, but also other measures, like EU cooperation, sustainability measures, infrastructure projects or operational improvements.

Progress in Ukraine, Moldova and Georgia

These reports offer some interesting insights into the state of rail integration in the region. Let’s begin by looking at Ukraine, Moldova and Georgia. Progress on the adoption of EU regulations is very limited, with Georgia taking the lead.

The country has fully adopted half the regulations on train driver licensing and around a third of the acquis on railway safety. It lags behind on interoperability, having adopted none of the regulations. That may not be all that surprising, considering that Georgia is far away from the European rail network. Interoperability is likely low on the priority list, especially considering the importance of transit freight from Azerbaijan and Russia.

The EU integration process of Georgia has essentially halted, and one should not necessarily expect further progress on rail regulation alignment. Due to the country’s location, one could say that this is not exactly a catastrophe. Georgia is of limited relevance to the EU’s rail network, occupying a more important position on the INSTC and Middle Corridor.

No full transposition

Neither Moldova nor Ukraine has fully implemented any aspect of the EU rail acquis. Moldova has made some progress across every area (working time and passenger rights, safety, interoperability, train driver licensing and market access), save one (a regulation relating to ERA). It has not fully implemented anything yet, however.

The same applies to Ukraine, but Transport Community notes that many draft pieces of legislation are currently awaiting adoption. That could significantly boost the rate of EU acquis adoption in Ukraine in the near future.

Progress in the Western Balkans

Let’s move on to the Western Balkans and take a look at the action plan for the region. Note that this goes beyond just the transposition of the EU acquis, but includes additional measures along key pillars: rail market access, interoperability, infrastructure modernisation, safety, driver licensing, regional cooperation and sustainable and multimodal measures. See the graph below for an overview of progress made (hover over the bars to get additional information).

On a national level, it is interesting to look at the rate of transposition of EU rail regulations. There is one clear champion in that area: Serbia. That is perhaps not entirely surprising, since the country has significant EU transit flows. Aligning itself with EU practices helps to streamline those operations, such as imports from the Greek port of Piraeus that travel towards logistics hubs in Hungary.

Serbia is the only country that has transposed a significant share of regulations relating to market access (7 out of 16) and has partially transposed two. The market access rules are supposed to improve competitiveness and create fair business conditions.

Albania follows behind Serbia with 5 regulations on market access fully transposed. All the others – North Macedonia, Kosovo, Bosnia and Herzegovina and Montenegro have barely implemented any market access regulations.

In terms of adopting interoperability measures, we have another champion: Montenegro. It has fully transposed 14 out of 22 legal acts. Those include TSIs on infrastructure, energy, locomotives, noise, safety in tunnels, control command and signalling and freight wagons. Serbia follows closely behind Montenegro, and Albania and Kosovo also have relatively good scores (41% partially transposed).

The key takeaway from the Western Balkans is that Serbia is far ahead of the rest, likely thanks to its key role as a transit country. Albania also performs well in adopting EU regulations. The others have fewer incentives to align themselves, and are therefore behind. The idea is that aligning with EU regulations will open up rail markets and allow for more competitive business, but success also depends on the rate of implementation in neighbouring countries, Transport Community points out.

“The Ukraine Transport Support Fund is not only a political commitment – it is a practical tool that will allow us to deliver real, tangible projects on the ground”, commented Deputy Minister for Development of Communities and Territories of Ukraine Serhiy Derkach.

Connectivity with Europe

“Ukraine’s transport system requires both urgent repairs and strategic upgrades, and the Fund creates a clear mechanism to channel support where it is needed most. Our priority is to ensure that every contribution translates into completed projects: restored roads and bridges, more efficient border crossings, resilient logistics routes, and modernised public transport systems.”

Derkach underlines that UTSF can help accelerate reconstruction and reinforce connectivity with Europe. One of the primary transport-related efforts currently ongoing in Ukraine is alignment with the EU’s rail network through standard-gauge tracks, such as the Chop-Uzhhorod railway.

Laude Intermodal has shown significant interest in improving the rail connectivity between Ukraine and the rest of the European Union, especially Poland. Moreover, the company’s terminal in Zamość recently got a new link to Oss, in the Netherlands, which should also benefit the Ukrainian market.

Polish authorities say the two men are believed to have crossed into Poland from Belarus this autumn and fled back to Belarus after the attacks. One of the suspects had previously been convicted of sabotage in Ukraine.

Poland takes security measures

In response to the attack, Poland is raising the threat level on certain railway lines and will deploy the army to protect important infrastructure, announced Tusk. Polish defence minister Władysław Kosiniak-Kamysz said he is increasing the involvement of the Territorial Defence Forces in supporting the Railway Security Guard in patrolling railway lines in eastern Poland. Particular attention will be paid to critical infrastructure elements: bridges, viaducts, tunnels, stations, turnouts and railway equipment.

Tusk described the sabotage as “unprecedented” and possibly the most serious attacks on Polish state security since the start of Russia’s full-scale invasion of Ukraine. He also warned that sabotage linked to Russian services is “gaining momentum” across Europe and aims to sow chaos and anti-Ukrainian sentiment.

The act of sabotage took place on railway line No. 7, which runs from Warsaw through Lublin to the state border. Around 115 trains travel on this line every day. At 6.40 a.m., a PKP Intercity train driver reported unevenness on the track. This information was immediately forwarded by the traffic controller in Dęblin to the driver of the next train.

A key link to Ukraine

Tusk said on Monday that the route is crucial for supplying Ukraine. The country has often indicated that it is a target for sabotage, because many military transports to Ukraine pass through Poland. NATO and EU member Poland is considered the most important transit country for the transport of military and humanitarian aid to Ukraine.

Following the sabotage, all procedures were followed, both by PKP PLK and the carriers, said Poland’s Minister of infrastructure Dariusz Klimczak. “We are currently preparing to repair the tracks, both near Puławy and near Dęblin. We are waiting for the services to complete the procedures. Repair of the tracks in the vicinity of Azoty in Puławy is already underway, and the line is passable.”

“We should certainly expect further attacks in completely different locations, ” General Jarosław Kraszewski, former director of the Department of Armed Forces Supervision, warned on Polsat News. He said railways aren’t fully protected by railway security services, as that’s virtually impossible. “Therefore, carrying out and preparing such an attack, a sabotage act, is relatively easy and straightforward.”

This article was originally published by our sister publication RailTech.com.