“Our goal is to ensure the security not only of Lithuania but also of the European Union”, Lithuanian interior minister Vladislav Kondratovič said. “The smooth operation of the Special Transit Scheme is an important international commitment, and we approach its implementation with great responsibility, especially considering the geopolitical situation and potential security threats. […] This is an opportunity for us to strengthen our capabilities, and the newly acquired aircraft will help us monitor train transit to and from the Kaliningrad region more effectively and respond to potential incidents in a timely manner.”

Rail ferries

Russia is making an attempt to phase out overland transit to Kaliningrad. EU sanctions restrict what Russia can supply to its exclave region, and the European bloc could theoretically close the rail corridor altogether. Moscow sees this as a threat and has set up rail ferries in the Baltic Sea to reduce its dependence on Lithuania.

This new setup for Kaliningrad logistics has a downside: It is rather slow. Delivery times can last from ten up to twenty days.

Fewer Russian goods on EU rail

Earlier, EU sanctions limited the amount of freight that Russia could transport to its exclave Kaliningrad via rail. Road transportation was not a viable alternative, because the EU does not allow sanctioned goods on trucks. As a result of the sanctions, the rail transit volume through Lithuania shrunk by 30 per cent in 2024. Only the quota for cement supplies reportedly grew by 20,000 tonnes.

Currently, there are around 30 ships providing freight transportation services to Kaliningrad from Russia. With the newly announced service, four rail ferries have started operating on the route.

Last year, Russia announced plans to build extra rail ferries to send rail freight to the exclave across the Baltic Sea. The head of the region said at the time that he wanted to achieve “total independence” from the EU for logistics needs. By the end of 2024, the volume of subsidies to support sea shipping to Kaliningrad amounted to 4,6 billion rubles (48 million euros).

Transit through Lithuania to Kaliningrad has thus shrunk by 30 per cent over the past year. Only the quota for cement supplies has reportedly grown by 20,000 tonnes. The transit reduction forces Russia to look for alternative modes of transportation – with sea shipping being the only real other option.

Currently, there are around 30 ships providing freight transportation services to Kaliningrad from Russia. Last year, Russia announced plans to build extra rail ferries to send rail freight to the exclave across the Baltic Sea. The head of the region said at the time that he wanted to achieve “total independence” from the EU for logistics needs. By the end of 2024, the volume of subsidies to support sea shipping to Kaliningrad amounted to 4,6 billion rubles (48 million euros)

Russian ban on dual-use goods

Both Russia and the EU have imposed limitations on transiting freight. For its part, Russia introduced a new ban on dual-use civilian-military goods transiting its territory to the EU from October 2024. It is possible that that is leading to a decrease in freight transiting Russia in the China – Europe direction.

The impact of sanctions on the Baltics

Western sanctions on Russia and Belarus, introduced after Moscow’s invasion of Ukraine, had a significant impact on the transport and logistics sectors in the Baltic countries. Estonia, Latvia and Lithuania all strongly relied on cargo coming from Russia. The most impacted of the three seems to be Estonia, where the national rail freight operator Operail announced its full privatisation after facing financial struggles since the introduction of sanctions.

In Latvia, the situation caused some disagreements between the industry and the public about a possible ban on the export of manganese ore to Russia. The sector claims that imposing such a ban would only cause the product to transit through different countries than Estonia, thus not necessarily penalising Russia. However, a public petition to enforce this ban was launched at the end of March and, in only one week, it gathered one-third of the required signatures.

When it comes to Lithuania, LTG Cargo introduced stricter rules to prevent sanctioned cargo from entering the country in March 2023. Moreover, in July, the company announced that it would expand internationally, mostly towards the West with countries such as Poland and Germany. Lithuania is also in a somewhat tricky position because it is between Russia and its exclave Kaliningrad. LTG Cargo started to reduce the volume of shipments carried out to Kaliningrad already in 2023. This year volumes have dropped even further, as LTG Cargo stated that no application for transport service to the exclave were approved between March and May 2024.

LTG Cargo is in the process of shifting its business model westward as a result of the loss of business with Russia and Belarus. As examples, it cites intermodal routes to Duisburg in Germany, Slavkov in Czechia and increased transport volumes in Poland. The route to Duisburg has become the backbone of international freight transport, according to the company.

Goods and directions

In 2023, LTG Cargo transported primarily oil and oil products amounting to 9.4 million tonnes, construction materials around 5.5 million tonnes and 4.7 million tonnes worth of agricultural products. In comparison with 2022, the total volume of agricultural products transported grew by a third.

Local transport grew by 20 per cent to a total of 7.7 million tonnes. 9.1 million tonnes were transported to and from Klaipėda Seaport. Rail freight into and out of the Russian exclave Kaliningrad dropped by 20 per cent to 6.5 million tonnes. Russia has been making an effort to circumvent Lithuanian railways and move its Kaliningrad freight by sea.

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In a meeting with President Vladimir Putin on 25 January, the Russian minister of economic development subsequently stressed that Kaliningrad’s key priority is supply independence. To that end, three new rail ferries will be built to help circumvent the exclave’s dependence on railways through Lithuania. In early 2022, weeks before its invasion of Ukraine, Russia also put two new ferries into use that allowed for the transportation of rail freight.

‘Total independence’

According to Russian Railways, rail import volumes into Kaliningrad not only recovered entirely after the brief sanctions but also exceeded pre-sanction levels by 40 per cent. Goods transportation out of the region was reportedly compensated by maritime transport. With the help of subsidies, freight volumes between Kaliningrad and mainland Russian ports grew by 50 per cent last year.

Currently, approximately 40 to 45 per cent of all freight from and to Kaliningrad is being transported by sea, according to the region’s governor Anton Alikhanov. He is not satisfied with these numbers, however, as the governor stresses the need for ‘total independence’. Accordingly, the new rail ferries will be constructed at a Russian shipyard with exclusively Russian materials and parts.

Also read:

• Kaliningrad sees a 37.2% drop in rail volumes for the first half of 2023
• Fesco bypasses Lithuania with St. Petersburg-Kaliningrad sea services
• LTG Cargo reduces Kaliningrad transit volumes in 2023

From these 2.6 million tonnes, roughly 2.2 million tonnes would be Kaliningrad-bound from Russia, and 420.000 would run in the opposite direction. Prominent in the transit volumes would be coal and steel products.

Hitting rock bottom

Apart from mainland Russia-Kaliningrad traffic, 2023 was also set to disrupt Eurasian traffic bound for Kaliningrad. The exclave’s Eurasian volumes had already dropped significantly in 2022. In particular, according to the index1520 data, Kaliningrad served Eurasian flows with two terminals – Mamonovo and Kaliningrad-Sortirovochniy.

The first saw 6,150 tonnes of cargo from Altynkol and 1,968 tonnes from Dostyk in 2022. The drop was 89,4 per cent for Altynkol-originating volumes and 35,7 per cent for Dostyk-originating volumes. The latter saw roughly 43,000 tonnes coming from Altynkol and 7,320 from Dostyk. The drop for the Kaliningrad-Sortirovochniy terminal was more significant since, compared to 2021, it received 72,44 per cent fewer volumes from Altynkol and 86,98 per cent reduced volumes from Dostyk.

For 2023, the situation might have an even more pessimistic outlook. Of course, figures from 2022 warned for an even slower 2023. However, at the moment, no data are available for Kaliningrad in the index1520 dataset, and most of the traffic arriving in Europe via Russia seems to be using the Brest/Malaszewicze border crossing. Consequently, Kaliningrad’s Eurasian volumes seem to be hitting rock bottom. At the same time, they are accompanied by considerably reduced volumes to and from Russia via rail–thus explaining the drop in KZD’s loading figures.

Also read:

• Where does Kaliningrad traffic stand currently?

• Kaliningrad-bound trains back on track after sanction update

The same initiative was repeated more recently for the connection between Moscow and Kaliningrad. Fesco had set up a rail freight connection from the Russian capital to the exclave in Lithuania in May 2020. However, on 20 March, Fesco stated that the service would be transformed into a combined rail-sea service. Goods travel on rail from Moscow to St. Petersburg and then, once again, they are loaded on ships to reach Kaliningrad.

Avoiding Lithuania’s stricter regulations

Fesco’s new initiatives can be linked to the fact that Lithuania decided to significantly decrease the volumes shipped from Russia via rail to Kaliningrad. LTG Cargo stated that it will allow the transit of 2,240,746 tonnes of cargo bound for Kaliningrad from Russia and 420,000 tonnes to transit in the opposite direction. Prominent in the transit volumes to Kaliningrad will be coal and steel products. In 2022, LTG Cargo moved roughly eight million tonnes of goods between Russia and its exclave.

The 420,000 tonnes that will run in the opposite direction will mainly concern timber and forestry product volumes exported from Kaliningrad to the Russian mainland. More specifically, in 2023 LTG Cargo will undertake the transit transport of 644,101 tonnes of coal and 471,736 tonnes of steel. LTG Cargo has clarified that it looks at each train service separately to determine whether the cargo can transit without breaking any sanction-related rules.

Also read:

• LTG Cargo reduces Kaliningrad transit volumes in 2023
• LTG Cargo tightens up rules to fight smuggling of sanctioned goods
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After reports that Belarusian producers have been importing sanctioned products through proxy companies in Lithuania, the Baltic state, Lithuanian Railways and the Lithuanian customs authorities have adopted a series of measures to restrict them. Investigations, so far, have resulted in tonnes of seized cargo, dozens of seized wagons and two arrests.

LTG names more ‘suspects’

Regarding sanction circumvention attempts, LTG has already named two companies: Lukoil, a Russian energy company whose cargo was seized while entering Lithuania from Kaliningrad, and Grodno Azot, a Belarusian fertiliser producer who’s been exporting products to Lithuania via proxy companies.

LTG further unveiled that the company Uosto Vartai, a freight forwarder active in rail and sea logistics, is suspected of having participated in the sanction circumvention schemes of Grodno Azot by forwarding its cargo to the warehouses of the company “Birių krovinių terminalas” at the port of Klaipeda. RailFreight.com tried contacting the company with no success, while LTG, the Lithuanian customs criminal service and the Lithuanian national security and defence committee, who undertake the investigation, have not reached any official conclusions on the matter yet.

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Also read:

• LTG’s tighter rules against smuggling pay off, tens of wagons seized

• Lithuanian customs seize tonnes of Belarusian sanctioned cargo and proceed to arrests

• ‘Belarusian schemes’ behind possible sanction circumvention on Lithuanian rail

The remaining 420,000 tonnes that will run in the opposite direction will mainly concern timber and forestry product volumes exported from Kaliningrad to the Russian mainland. However, the numbers show that apart from steel, coal and timber, more products will transit to and from Kaliningrad, according to sanctions regulations. LTG Cargo has clarified that it looks at each train service separately to determine whether the cargo can transit without breaking any sanction-related rules.

Drop in Eurasian volumes too

Apart from mainland Russia-Kaliningrad traffic, which has been affected due to the sanctions, even though it continues relatively undisrupted, Eurasian traffic bound to Kaliningrad also dropped significantly in 2022, probably signalling an equally slow year in 2023.

In particular, according to the index1520 data, Kaliningrad serves Eurasian flows with two terminals – Mamonovo and Kaliningrad-Sortirovochniy. The first saw 6,150 tonnes of cargo from Altynkol and 1,968 tonnes from Dostyk in 2022. The drop was 89,4 per cent for Altynkol-originating volumes and 35,7 per cent for Dostyk-originating volumes.

The latter saw roughly 43,000 tonnes coming from Altynkol and 7,320 from Dostyk. The drop for the Kaliningrad-Sortirovochniy terminal was more significant since, compared to 2021, it received 72,44 per cent fewer volumes from Altynkol and 86,98 per cent reduced volumes from Dostyk.

Tensions on Lithuania-Belarus border

The already reduced Kaliningrad-bound rail traffic faces some additional challenges. Lithuanian customs had already increased the border checks for Russian trains arriving in the country, specifically the controls on the border with Belarus, the main entry point to Lithuania by land.

This has resulted in the deployment of x-ray machines at border crossings. Yet, some smuggling incidents noted lately, combined with reports from LTG Cargo that some companies have attempted to circumvent cargo restrictions stemming from sanctions, have resulted in some border closures between Belarus-Lithuania. Specifically, the Stasylos-Byenyakoni rail border crossing is indefinitely closed since its anti-smuggling technologies are updated. Lithuanian customs have mentioned that the closure will be temporary; nevertheless, it still affects rail traffic.

Follow RailFreight.com on Google News and get the latest industry updates. 

Also read:

• Lithuania closes rail border with Belarus, too much smuggling

• Bootleg Belarusian cigarettes on a train seized by Lithuanian Customs

• Where does Kaliningrad traffic stand currently?