LTG Cargo launched a public procurement that does not only include the purchase of the new electric locomotives. The tender launched by LTG Cargo is about to enter its final stages. “Suppliers who submitted applications and met the qualifications were selected and will be invited to the next stage: to submit initial offers”, the spokesperson continued. Whoever wins the tender will have to provide technical support, spare parts, and maintenance for a period of three years. The company claimed that the electricity produced to power the locomotives will come solely from renewable sources.

Electrification of the Klaipėda-Vilnius railway

The Lithuanian government approved the plan to electrify the 364 kilometres of railway line connecting Klaipėda and Vilnius in February 2022. The total investment for this project is 398 million euros, roughly half of which will be financed through the European Union Cohesion Fund. The rest of the fund will be provided by Lithuanian Railways, as the government explained back then. This is part of Lithuania’s larger plan to electrify 39 per cent of its railways by 2030, also thanks to projects such as RailBaltica. Currently, only less than 10 per cent of the country’s entire rail network is electrified.

Also read:

• Kaliningrad sees a 37.2% drop in rail volumes for the first half of 2023
• LTG Cargo Polska grows fleet with the help of Ermewa
• LTG Cargo makes Kaunas-Slawkow link regular with surprises on the way

Diversification

Customers shipping to and from Gdansk will have access to one of the most important deep-sea ports in the Baltic Sea, with the largest container ships from North and South America and Asia arriving here. This logistics centre is the only port in the region that regularly receives freight from the Far East.

At the beginning of April, LTG Cargo successfully launched an intermodal service to Duisburg in Germany, and it already completed its first trip with full loads. “Why Duisburg? As we say jokingly, it is a banana for logistics”, Skuncikas said.

Potential of Lithuania

“We offer our clients to leverage the potential accumulated by the group in Poland…We see Lithuania as a hub for intermodal transportation in three ways. First, rising from the possibilities of the Klaipeda Port, where we have terminals connected with the standard gauge and broad gauge”, Skuncikas said.

The company’s other two intermodal terminals operate in Kaunas, Lithuania’s second-largest city, and Sestokai, near the Lithuanian-Polish border. “Because of the chaos in the market, the result of the war, we are developing solutions for logistics of general cargo, also for metal”, he said.

Scandinavian option

Touching up the topic of the intermodal corridor from Scandinavia to Western Union, the LTG Cargo official said the company “had a very nice discussion” about it with respective officials from Latvia and Estonia on 14 June 14.

“At the moment, we’re finalising solutions on how and how fast we can start the Amber train (an intermodal train, which runs on the route Sestokai / Kaunas – Riga – Talinn, thus connecting the three Baltic States by railways and opening new business opportunities for freight shippers- L. J) and we should be seeing some results already later this summer. We see demand from Nordic countries, especially Finland, short-term – cargo will go by ferries to and from Muuga Port and from there we will connect, on standard and broad gauge, to Vilnius terminal”, Skuncikas said. It could accept containers as well.

Kaunas terminal

And then there are not yet fully tapped capacities of Kaunas terminal, from which trains go to Duisburg in Germany – they travel three times back and forth a week, the LTG Cargo manager noted. Since last September, a fourth train has been launched on the route and, Skuncikas says, that, in total, five trains could potentially run between the two cities.

He says that LTG Cargo plans to develop the Duisburg destination further, meaning that a cargo loaded in Finland will smoothly reach Italy, the Netherlands and other destinations.

Lithuania has a 1520-mm and 1435-mm wide rail gauge and therefore, it is capable to deliver freight to Western and Eastern Europe as well as to Asia. Rail freight transportation on 1435-mm gauge is operating in Europe westward from Finland, the Baltic countries, Belarus and Ukraine, excluding Spain, Portugal and Ireland.

Sustainability

Finally, there is the issue of sustainability. “At LTG Cargo, we believe that with the new train connection linking Scandinavia and Western European countries we can push forward to promote more sustainable solutions in the Baltic countries, especially in a couple years from now”, Skuncikas said.

In its strategy, the company had set eyes on becoming the primary transport corridor for transporting freights between the Black Sea and the Baltic Sea by connecting Northern Europe with the Black Sea region, i. e. Ukraine, Turkey, Transcaucasia (implementation of international shuttle projects).

The war situation

But the regional plans had to be put mostly on hold due to the ongoing war. LTG Cargo has also recently opened an office in Ukraine, eyeing expansion in the Black Sea market.

In 2022, the Lithuanian company expects to transport around half the cargo compared to 2021, resulting in 150 million euros lost. “This will be the largest drop in cargo volumes and the lowest volume of cargo transported in the company’s history”, stressed LTG in a statement.

Lithuanian Railways, LTG, has said it is planning to lay off around 2,000 of its 9,000-plus employees, with around a quarter of the state-owned group’s managerial staff at various levels set to leave. LTG has lost around 11 million tons in annual freight because of EU and US sanctions against Belarus’ potash giant Belaruskali, which will trim its annual revenue by 61 million euros.

EU sanctions

The railway company is set to lose another 2.6 million tons of freight and 12.8 million euros in revenue due to EU sanctions on the owner of Lithuania’s phosphate fertiliser producer Lifosa. The EU’s sanctions on Russian coal and Poland’s refusal to buy it will result in a loss of 2.5 million tons of coal shipments and 12 million euros in revenue for LTG.

The railway group will lose another 1.4 million tons of freight and 17 million euros in revenue as a result of Belarus’ ban on the transit of oil and oil products and fertilisers from Lithuania. 95 per cent of these shipments were destined for Ukraine. Lithuania’s draft revised 2022 budget, approved by the Cabinet, earmarks 155 million euros in additional financing for LTG.

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 Infra owns Vilnius and Kaunas intermodal terminals, and the entire LTG Group has 244 cargo terminals and yards. Last year, about 27,000 TEUs of cargo were handled at intermodal terminals and 47,000 wagons at cargo terminals and yards. However, there are more terminal plans in the pipeline currently. For instance, “one of the most important development projects in Lithuania is installing infrastructure in Palemona suitable for handling military equipment and freight trains. Half of the investment, which reaches 13,3 million euros, will come from the Connecting Europe Facility”, explained LTG.

Doubling of volumes

Expanding to western Europe and launching intermodal connections is the main focal point of LTG Group at the moment. In April, LTG Cargo launched the first regular intermodal train between the Kaunas Intermodal Terminal and Duisburg, passing via Poznan.

Recently, the ports of Hamburg and Klaipeda also signed an MoC to “strengthen cooperation in developing and implementing joint projects and developing new logistics routes for maritime and rail transport between Germany and Lithuania”. In this sense, LTG could find a new gateway to Hamburg soon since the two parties will boost the development of new rail links.

Indicative of the intermodal fever taking place in Lithuania is Sankovski’s estimation for Lithuania’s intermodal volumes in 2022. He mentioned that “the volumes of intermodal transportation in the directions of Western Europe are already growing rapidly, while cargo volumes are planned to double this year”.

Do you want to learn more?

Are you interested in learning more about Lithuania and its business potential? Do you want to get informed about the new routes linking the country with Western Europe? 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:

• Ports of Hamburg and Klaipeda partner up, rail links main objective
• LTG Cargo launches regular Kaunas-Duisburg connection in April
• From Ukraine to the world through Belarus: a realistic option

The goal is to become a crossroad for traffic from all directions. From the east to the west, north to south, and overseas destinations by utilising its port facilities. Gytis Mažeika, director, development and international cooperation at the Lithuanian Ministry of transport and communications, stated clearly during last Friday’s RailFreight Live webinar that Lithuania “can become a hub and is open to new investments and partnerships.”

Domestic rail freight strong

It is impressive to see a small country like Lithuania using rail freight for most of its inland transport operations. The modal split of rail reaches almost 70 per cent, positioning the country among the leading European states in using rail freight. Even countries like Germany, which are considered traditional rail freight forces, come second to Lithuania.

“Of course, many operations still take place by road,” said Mažeika. However, they are limited as much as possible to last-mile operations, and rail freight has the central role. “The fact that rail has such a strong position should become an incentive for logistics companies to take a look at Lithuania from a different angle and include it in their international routes,” he added.

International possibilities

If we look at Lithuania’s position on the map, one thing is clear: the Baltic state is indeed a crossroad. It borders Belarus and Poland while it has direct access to the Baltic sea. This makes it ideal for all kinds of traffic. It can become a gateway to and from Russia, the CIS countries, Central Asia and China.

Moreover, it can become important on the north-south axis with links extending from Scandinavia to the Black Sea via Ukraine. In fact, many Ukrainian trains transit towards Lithuania and the port of Klaipeda and use it as a gateway to the Nordic countries.

A crucial component of international connectivity for the country is the Schengen border crossing solution that can be applied between the EU and Belarus, allowing trains to cross the border in just thirty minutes. Combined with the double gauge in which the country operates (1520 mm and 1435 mm gauge networks), train transit can be substantially fast and efficient.

Port Klaipeda the new Kaliningrad

Speaking of the port of Klaipeda, it is essential to mention that it constitutes one of the three enablers for more traffic through Lithuania. The other two are the Rail Baltica project and the Kaunas intermodal terminal. Starting with the port of Klaipeda, Mažeika was explicit. “It can function in the same way as Kaliningrad,” he stressed. It is a multifunctional, ice-free port that has the needed capacity to forward freight across the Baltic, north European and Scandinavian ports. It can become the final destination for many westbound trains coming from eastern Europe and Asia.

On the other hand, the Rail Baltica project is the country’s flagship. The infrastructure upgrades and construction that are part of the project make Lithuania and the broader Baltic region more competitive when it comes to rail. The plan has seen and keeps seeing many developments. It will improve connectivity between Lithuania and Latvia via the Kaunas-Panevezys rail link, while plans foresee new rail links with Poland by 2026. Finally, the project enhances domestic connectivity with a dedicated rail link between the country’s biggest terminals these of Kaunas and Vilnius.

Since Kaunas is mentioned, it is important to say that the intermodal terminal is the latest addition to Lithuania’s rail freight portfolio. The terminal started operations last July with the first rail link from Tilburg in the Netherlands. The Lithuanian Railways cooperate with the GVT Group of Logistics for this service. Their partnership confirms the country’s potential since GVT wants to use Kaunas as a gateway to Russia and beyond.

RailFreight on tour Lithuania

Are you interested in learning more about Lithuania and the opportunities it offers? In RailFreight.com, we make it possible for you. As we aim to monitor the latest developments in the rail freight industry, we launched a new concept for 2022, the RailFreight On Tour. In tis project, we try to highlight new rail destinations, and Lithuania is on our agenda.

Are you interested in meeting with the Lithuanian rail freight industry and exploring business possibilities in the Baltics and beyond? Then join us in Vilnius, Lithuania, on 5 and 6 April 2022. You can find more details on the event here, and you can click here to stay up to date with all the latest news.

Also read:

• Lithuania calls on Turkmenistan to launch cargo flows to the Baltics
• Will the ride on Rail Baltica smooth out after a long bumpy run-in?

Everything from Vilnius

The new system will substitute working practices, which until now, are carried out manually and on paper. With the new system, the entire planning of long-haul freight traffic and required resources will be carried out from the renewed LTG Cargo Carriage Planning Centre in Vilnius.

“We are particularly proud of this partnership with LTG Cargo, which is a major player in its region. We are impressed by the way LTG Cargo executes with precision on its data-driven strategy and we are honored to have been selected to contribute to their transformation journey as an esteemed digital partner to LTG Cargo”, said Edwin Hageman, CEO of the Ab Ovo group.

5-year period

The cooperation with Ab Ovo has been planned for a five-year period with a possibility to extend it for two more years. The contract, which is valued at 6.4 million euros, delivers Ab Ovo’s managed SaaS solution for rail freight operators based on the DELMIA Quintiq platform from Dassault Systémes. It involves software and hardware, license lease, maintenance and support as well as configuration, integration creation, installation and training services as a complete turn-key solution for LTG Cargo.

LTG Cargo is currently implementing more than fifty digital transformation and robotic process automation (RPA) initiatives, by which they seek to improve efficiency of activities and increase the company’s competitiveness. Mobile apps and digital analytics tools are created for that purpose. The Ab Ovo solution is part of this continuous initiative to transform the organisation.

Competitive lead time

The Xi’an-Vilnius line only takes 8 days for the 9,000 kilometer-long journey, a very competitive lead time. “Because the train runs on a wide gauge throughout the whole journey, there is one less transshipment point and this makes the journey obviously faster”, explained Xiao.

The goods on this route mainly include computer and instrument products, industrial products, textiles and other categories, and from the perspective of operations in the first three months, LCL shipments will be relatively more. Based on the postal transportation needs between countries, the train is to carry more than half of the postal cargo too. “This train currently only runs westbound, but eastbound shipments are still being planned”, added Xiao.

Bigger vision

In addition to meeting the freight demand from Xi’an to Vilnius, there is a bigger vision behind the establishment of the new line. “This line is to pave the way for the spread of our services to the Nordic market. We hope to distribute the goods to Northern Europe through Vilnius. At the end of the year, we will consider developing Vilnius as a distribution hub.”

Do you want to hear more about the regular line from Xi’an to Vilnius? Listen to the interview on RailFreight Live at 1pm this afternoon.