From Russia’ GTT to the European Vehicle Register

Traditionally, rail freight services in the Baltics relied on the Russian GTT system, which included sharing data on rolling stock and cargo to the Kremlin. However, a new platform to register broad-gauge platform wagons to the European Vehicle Register now makes this procedure unnecessary. A test for this new type of service was launched at the beginning of 2024.

“It is the first time in the history of the restored Independence of Lithuania, when a train moves in the Baltic States based on the data of European Vehicle Register, based on the European certificate of Entities in Charge of Maintenance and – the most important! – without providing any redundant data to the Russian systems”, said the CRO of Lithuanian Railways Gediminas Seckus.

Wascosa has signed up LTG Cargo Polska as a client for its stock of NiKRASA 3.0 cradles. The parties say the deal will enhance their cooperation and boost Baltic trade. The focus of the development is intermodal rail freight between Lithuania and Western Europe. This partnership will mainly use the transport corridor between Kaunas in Lithuania and Duisburg in Germany, taking trucks off the busy roads.

Modal shift to rail

“Germany is one of Lithuania’s largest trading partners, underscoring the importance of the Kaunas-Duisburg intermodal connection,” explained Wascosa in a formal statement. LTG Cargo Polska, which is a subsidiary of the Lithuanian rail freight company LTG Cargo, has a long-term strategy to strengthen its position as the Baltic States’ gateway to Western Europe. The company is actively engaged in expanding intermodal transport capability, not least for commercial advantage, but also to offer efficient and environmentally friendly logistics options.

As reported by our sister service, WorldCargo News, Wascosa has been marketing the NiKRASA system since signing a deal with the manufacturers earlier this year. “This innovation supports the growing demand for combined transport,” says Wascosa, the Swiss-established rail freight rolling stock company, currently celebrating its 60th anniversary year. “The cooperation also aligns with LTG Cargo’s broader sustainability strategy, which has already led to significant achievements: in 2023, intermodal shipments prevented 66,500 tonnes of CO2 emissions.”

Third generation is even more versatile

Iris Hilb, CEO of Wascosa AG, is enthusiastic about the latest agreement with LTG. “Wascosa AG is equally committed to driving innovation in rail freight logistics,” she said. “The NiKRASA solution fits perfectly into our market strategy, providing value to customers while supporting the ongoing shift towards rail transport. According to estimates by the leasing company, around 90% of Europe’s truck fleet is non-craneable. Wascosa further says that the NiKRASA system enables trailers to be loaded from road to rail in just two minutes without requiring changes to existing terminal or rail infrastructure.

The NiKRASA system for trailer handling was developed by TX Logistics, a subsidiary of Mercitalia Group. The third and more flexible iteration of the system was released just over two years ago, At the time, Wascosa entered into a marketing deal, which ultimately saw the Swiss leasing company purchase 150 units. The agreement allows non-craneable semi-trailers to be loaded onto rail wagons quickly and easily. LTG claims to be the only rail carrier with the necessary licenses to operate in both Poland and the Baltics.

The company already uses a rail service offered by LTG Cargo between Duisburg and Lithuanian Kaunas, which the company calls a ‘good alternative to road transport’. However, Samskip laments the fact that there is no operator that provides a financially interesting inland rail connection from Klaipeda as an alternative to other modalities.

Lack of commercial operators

At the moment, an intermodal rail connection from Klaipeda port is not always financially interesting, says Samskip. The company points to the lack of commercial operators as the culprit. “There is an insufficient number of commercially-minded operators in the region,” the Dutch logistics company says. Consequently, rail connectivity to Baltic ports is lacking, which provides an obstacle to intermodality.

Commercially minded operators are needed because the currently present state-owned operators do not provide interesting alternatives to different modalities. State-owned operators are widely considered to operate inefficiently. For example, state-owned companies Fret SNCF and DB Cargo have both been subject to EU reprisals over excessive state support following bad financial performance.

Rail Baltica

Rail Baltica may provide an impetus to improvement in the Baltics, according to Samskip. The EU-sponsored rail project aims to connect the three Baltic states with the rest of Europe on the standard European gauge TEN-T network. Currently, the existing Baltic railway infrastructure is oriented towards Russia, and the Baltic networks are badly interconnected because they were built during Russia’s rule in the area.

Rail Baltica would provide improved inter-Baltic connectivity and a high-speed line to the rest of Europe. ‘It could attract commercial operators,’ says Samskip. ‘That would be a very positive development for rail. Rail Baltica is planned to go through Kaunas, and a commercially viable route could then be extended towards the port of Klaipeda.’

Also read:

• LTG Cargo launches first cross-Baltic service
• Rail Baltica Estonia signs new contracts, optimistic about progress
• Estonian Railways’ losses expected to worsen in the coming years

LTG Cargo will take care of transport on the section for the port of Klaipeda to the Kaunas Intermodal Terminal, where its Polish branch, LTG Cargo Polska, will pick the cargo up. The ride then continues through Poland until the Medyka-Mostyska border crossing, where the goods are moved into broad UZ’s broad gauge rolling stock and taken to the Lisky terminal in Kyiv. From here, the semi-trailers will reach their destinations by road.

Not UZ’s first tests with semi-trailer

This is not the first initative for UZ concerning semi-trailers. The company is collaborating with Austrian Rail Cargo Group for this type of service along the Kyiv-Lviv-Budapest-Vienna axis. This project, was announced in May, and successfully tested in October, with expectations of going live before the end of the year. The wagons for both these projects are provided by German rolling stock trader VTG.

Lithuania-Ukraine cooperation

When it comes to collaboration between Ukraine and Lithuania, it does not stop with this new initiative. Despite there is nothing yet concrete, UZ confirmed that it is considering using this route to import grain crops. Lithuania has been proposed as a candidate to import grain from Kyiv by parties from both countries since the summer. In July, Lithuanian Ministers sent a joint letter to the EU Commission requesting assistance in establishing a rail export corridor via the Baltic countries. In August, the president of the Ukrainian Logistics Alliance, Edvins Berzins underlined the potential of the Baltic route for the country’s grain exports. Moreover, yesterday LTG Cargo announced the expansion of its grain fleet with 500 new wagons.

Also read:

• Ukrainian grain volumes moved by rail are slowly increasing again
• Ukrainian Railways purchased 115 standard gauge tank wagons
• First Ukrainian freight train reaches Latvia after a year-and-a-half hiatus

Lithuania and Ukraine’s expansion plans

For example, UZ is cooperating with RCG also for a new service between Kyiv and Vienna, which should be operative by the end of this year. In addition, in July, the company set up a new subsidiary to enter the European market: UZ Cargo Poland. The first service operated by the new company between Ukraine and Poland is connecting Gdansk with Kyiv, Odessa, Dnipro, and Vinnytsia. LTG and its subsidiary LTG Cargo are also working towards increasing its international presence. The company’s Ukrainian branch, LTG Cargo Ukraine, is slowly picking up pace again after significant slowdowns caused by the Russian invasion of Kyiv.

Also read:

• Ukrainian Railways auctions export services with retrofitted equipment
• Romania opens its way for licensed Ukrainian grain
• Ukrainian Railways exceeds financial expectations for 2023
• Ban on Ukrainian grain imports remains despite EU’s decision

As the Lithuanian IM highlighted, the new facility will boost the shift from road to rail when it comes to military transportation. Currently, the loading of military vehicles, oversized and bulk cargo, takes place at the Sestokai terminal, near the Lithuanian border with Poland. However, these cargo types are then transported by road. The new facility near Kaunas will therefore provide a rail connection for these services to the heart of Lithuania, providing additional capacity as well.

The Baltics at the centre of the EU Military Mobility fund

The terminal in Palemonas is already somewhat accustomed to the transportation of military equipment. In May 2022, US troops loaded their military equipment at the facility for the first time as part of the EU Military Mobility fund. In April 2022, the European Union allocated 160 million euros via the fund to improve rail infrastructure for military and civilian purposes.

When it comes to the Baltic States, Estonia was granted 31 million euros for the enhancement of the rail connection to the country’s largest military base in Tapa. Latvia received 5 million euros to integrate the military mobility requirements in the Latvian part of the Rail Baltica project.

With the 13 million given to Lithuania, the Baltic States received almost one-third of the funds made available by the EU Military Mobility program last spring. In December 2022, the total investment in the Military Mobility fund was increased from 330 to 616 million euros. However, it is not clear if this translated to increased investment specifically for rail as well.

Also read:

• LTG Cargo rejects hundreds of transport requests to block Belarusian cargo
• LTG: more x-ray machines on the borders as smuggling investigation continues
• LTG Cargo tightens up rules to fight smuggling of sanctioned goods
• LTG Cargo reduces Kaliningrad transit volumes in 2023

The result of the Italy-Lithuania MoU

Once the service is activated, trains will run twice a week to the port of Trieste and the Cervignano container terminal, less than 60 kilometres from the port. Trieste will be the destination for cargo that needs to be shipped further away. Cargo with the North of Italy as the final destination will be transported to the Cervignano Intermodal Terminal.

During the first test run, semi-trailers were transported from Lithuania to Germany and from there sent to Italy. The test run was launched two months after an MoU was signed, on 6 September, by the Italian and Lithuanian ministries of transport. At the meeting in September, the parties discussed the feasibility of a direct connection between Kaunas and Trieste.

A direct connection Kaunas-Trieste is still far

A direct Kaunas-Trieste rail connection, however, still seems far, as the port operator Alpe Adria pointed out. The parties involved have highlighted the difficulties behind finalising such a project. For example, it would not be feasible at the moment. Moreover, connecting Kaunas and Trieste is part of a bigger rail network that aims at linking northern and southern Europe.

“The continuation of this route will be the Amber Train project connecting Kaunas and Tallinn,” the Lithuanian Ministry of Transport said. The Amber Train was reactivated in mid-September and its purpose is to boost the shift to rail in the Baltic countries and Scandinavia. The service was reinstated to make up for the volumes the Baltic countries lost when traffic to and from Russia was significantly reduced.

Also read:

• LTG: 30 million euros to expand the Kaunas Intermodal Terminal
• Amber Train is back on track, this time with new potential
• Hungary will build a new rail terminal…at the port of Trieste

First, what is the Three Seas Initiative? The Three Seas Initiative brings together 12 EU Member States between the Baltic, Black and Adriatic seas. It is all about boosting infrastructure investments in these countries from the Balkans all the way to central Europe and the Baltic sea.

Now, why is there a twist? Skačkauskas and Adamczyk explored the possibility of extending the initiative to Lithuania and the Aegean sea, meaning Greece. They intend to establish a North-South transport corridor linking the Aegean and Black seas to Lithuania via Greece, Bulgaria, Romania, Hungary, Slovakia and Poland.

More important than ever

“The North-South transport corridor connecting the three seas — the Baltic, Black and Aegean — is more important than ever and must be multimodal, connecting both roads and European gauge railways. We support Poland’s proposal to extend this transport corridor to Lithuania. The current geopolitical situation dictates the need also to foresee new, additional transport corridors and infrastructure connections between Lithuania and Poland, ensuring alternatives to the priority projects of Rail Baltica and Via Baltica. One such possibility is the development of the road through Lazdijai, which would allow creating two strategic connections across the border between Lithuania and Poland, strengthening logistics chains and military mobility,” said Skačkauskas.

The parties involved aim to create a transit corridor bypassing Belarus to transport goods under minimum checks and accelerated customs procedures, minimising existing infrastructure and bureaucratic obstacles. “It is vital that transport companies are involved in this process and that operators work to coordinate freight transport, allocate transport capacity and establish timetables”, agreed the two ministers.

“Such a project, of course, involves some hurdles that the partners need to overcome. For instance, route planning should be as efficient as possible, while the parties need to invest more in resources like platforms, wagons, locomotives and loading equipment. The countries envisage specific solutions of varying complexity that could speed up Ukraine’s freight transport process.

Learn more about Lithuania

Are you interested in learning more about Lithuania, the developments taking place there and its business potential? Do you want to get informed about the new routes linking the country with Western Europe? Next week, on 14-15 June, we organise the RailFreight On Tour-The Lithuanian Edition in Vilnius, where we will discuss the possibility of a profitable rail business in Lithuania and the broader Baltic region.

During the event, interested parties will have the chance to hear more about developments such as the Hamburg-Klaipeda cooperation or the Kaunas-Duisburg rail link, get in touch with local players and explore possibilities for their own businesses. Take a look at the event page here and register here.

Also read:

• Poland and the Baltics can cooperate more and establish new corridors

• A solution for Ukrainian grain exports might be in sight

• From Ukraine to the world through Belarus: a realistic option

LTG Cargo

LTG Cargo started a test drive from Kaunas Intermodal Terminal (KIT) to Ukraine via Poland on Wednesday morning. The train is on the way to pick up 1,000 tonnes of various local goods and return them to the KIT, where it will be distributed in the Baltic region.

“With the onset of the Russian war in Ukraine, conventional and regionally important logistics chains were disrupted, and the project is expected to contribute to their rebuilding through an alternative route through Poland”, LTG Cargo says.

“The pilot will aim to assess the technological aspects of the new route, the deadlines for freight transport, the potential logistics challenges and their solutions. This route will only run on the narrow European gauge, which runs from KIT via Poland to a terminal on the Ukrainian border. This means that if the project is successful, part of the cargo will be able to be transported to Kaunas without changing the track and without reloading it.”

Grain train

Already up and running is the service of ÖBB’s Rail Cargo Group (RCG). From March to April 2022, RCG organised grain trains from Ukraine to Germany every other day. In total, 60,000 tons of grain were transported.

This will now become a daily train, for at least three months. The grain train of RCG runs from Ukraine via Čierna (Slovakia) towards Brake in northern Germany. Of the 30 trains, 5 trains will remain in the Czech Republic and Slovakia, while 25 trains reach Germany.

Food security

The rail freight links between Ukraine and Europe are a top priority for the EU. This was indicated by Kristian Schmidt, director of Land Transport at the European Commission this month. He called on the sector to “strengthen the rail and road haulage links to Ukraine, in order to keep the lifelines running”.

“Ukraine is an important partner of the EU. It is an important player in global food security, as they provide large proportions of grain and cereals. The EU has every interest in keeping trade going, and to support the Ukrainian economy so the country can stand on its own feet.

Export to the world

Ukraine was the world’s fourth largest grain exporter in the world in 2020-2021, Russia ranks third. Together, the countries account for almost 30 per cent of global wheat exports, almost 20 per cent of corn exports, and more than 80 per cent of the world supply of sunflower oil.

However, most of this export was taking place via seashipping, and the Black Sea ports have been blocked since the start of the war. Railways are only accounting for a fraction of this transport.

In early March, LTG Cargo also launched a train service connecting KIT with Małaszewicze in Poland in response to the needs of customers to transport cargo by rail to the East Poland region.

First international route to the West

The service is the first connection between KIT and Duisburg, but it is also LTG Cargo’s first rail freight link towards western Europe. The Lithuanian company will take care of transport in all three countries involved in the service, with shipments in Poland and Germany undertaken by LTG Cargo Polska, LTG Cargo’s Polish subsidiary.

Before reaching Duisburg, the service will transit through various hubs, including Białystok, Warsaw and Poznan in Poland, while its capacity will be up to 36 units of semi-trailers and containers per trip. “In the coming months, LTG Cargo also plans to establish cooperation with new customers in Poland and look for ways to help Lithuanian businesses import raw materials from Central European countries”, concluded the company.

Also read:

• LTG Cargo Ukraine temporarily suspends operations

• Lithuanian Railways on the look for new head

• 47 million euros investment in Poland will see LTG’s business booming