That year, 13,5 million tons of goods worth 8,7 billion euros were moved between Russia and the EU, while in 2023 they dropped to 5,4 million tons (-60%) worth 3,5 billion euros (-59.8%). A sharp decline was also observed in 2024, when the overall deliveries dropped to about 4 million tonnes. A similar negative dynamics is also expected for 2025. In comparison, in the pre-war 2021 deliveries amounted to about 22 million tonnes.

Mainly used for China-Europe traffic

Instead of the EU, Russia has re-oriented most of its rail cargo supplies to the East. The loss of the European market led to the catastrophic losses for most Russian shippers and carriers operating in this direction, even forcing some of them to declare bankruptcy. According to analysts and some representatives of Russian shippers, most traffic on the Russia-EU axis is currently transit and specialised shipments.

In the case of transit shipments, their annual volume ranges between 300,000-400,000 TEUs, mostly accounting for Chinese consumer goods delivered to the EU. European customers are interested in these routes due to its relatively short transit times, compared to those by sea transport. Furthermore, given the established position of this corridor, it is technologically the most advanced, with a transit time of five to seven days to cross Russia.

Alternative routes are not ready

Still, most analysts predict a further deterioration of the situation. The 20th package of sanctions, which might be approved already by 24 February, will affect mineral fertilizers, resulting in a further steep decline of rail freight traffic between the EU and Russia. On the other hand, the forecasts for transit deliveries are much better. Especially because trade volumes between China and the EU are growing and alternative routes such as the Middle Corridor are not (yet) ready to pick up large volumes and offer competitive prices.

The first locomotive, 66014, is scheduled to leave DB Cargo UK’s Toton traction maintenance depot in Nottinghamshire, in the English East Midlands, at the end of January 2026. All 25 locomotives are due to be delivered by mid-2028. Before transfer to mainland Europe, each unit will be reinstated to current UK operational standards and repainted blue, reflecting their new ownership.

Fleet optimisation at DB Cargo UK

DB Cargo UK said the sale forms part of a wider programme to optimise its locomotive fleet. The company operates one of the largest rail freight fleets in the UK and is a key player in intermodal, construction, automotive, energy, and bulk flows. DB Cargo’s Toton depot and yards were the scene of an innovative two-way automotive flow in 2022. It is the UK subsidiary of DB Cargo, the freight arm of Germany’s state-owned Deutsche Bahn, with operations spanning much of Europe.

Wayne Miller, DB Cargo UK’s newly appointed Engineering Director, said the Class 66 locomotives being sold were surplus to requirements. He added that the transaction would still leave the operator with sufficient traction to meet forecast traffic growth. Miller said DB Cargo UK was proud to be reinstating the locomotives at its Toton centre of excellence and looked forward to further developing its partnership with GFR.

Delivery timeline and technical preparation

Under the terms of the agreement, deliveries will be phased over more than two years. The locomotives will undergo work at Toton before export, ensuring compliance with current UK standards ahead of their transfer. Once prepared, the locomotives will be transported to mainland Europe for entry into service with GFR.

The Class 66 design has become a mainstay of European diesel freight operations due to its high power output, reliability, and availability. Although originally developed for North American markets, the type has been widely adopted across Europe. Its continued redeployment between operators reflects both its longevity and its adaptability to different national networks.

GFR strategy and regional growth

Grup Feroviar Roman is the flagship company of the GRAMPET Group, the largest private freight rail and logistics operator in Central and South-Eastern Europe. The group employs more than 7,500 people and operates in ten countries, including Romania, Germany, Bulgaria, Hungary, Croatia, and Greece. GFR alone operates a fleet of more than 15,000 wagons and around 350 locomotives.

Sorin Chinde, Chairman of GFR and Vice President of GRAMPET Group, said the acquisition aligned with the group’s strategy of investing in high-performance rolling stock. He said the Class 66 locomotives would become the backbone of GFR’s diesel fleet. The purchase will allow GFR to withdraw a larger number of older 2,100-horsepower locomotives, reducing maintenance costs and improving fleet availability.

First introduced in the late 1990s, the Class 66 is a six-axle, Co-Co diesel-electric freight locomotive built by EMD for the European market. Producing around 3,000 horsepower, it was designed for heavy haul duties and high availability. More than 500 units have operated in the UK alone, with many exported or redeployed across Europe. Its standardised components, strong reliability record and long service life have made it a benchmark locomotive for private freight operators.

T&E’s report argues that the EU’s current rail funding model is imbalanced. Between 2021 and 2023, €6.6 billion in total was allocated to large-scale projects including Rail Baltica, the Brenner Base Tunnel, and the Fehmarnbelt tunnel — each with price tags over €1 billion and timelines stretching into the 2030s. In contrast, dozens of lower-cost but critical upgrades received far less support, ERTMS upgrades in particular, says T&E.

Big projects, big delays

According to the report, these megaprojects, though essential to completing the Trans-European Transport Network (TEN-T), are “capital-intensive” and slow to deliver benefits. Rail Baltica alone accounted for nearly one-fifth of all CEF rail funding in the period, yet its completion has now been pushed to 2035. The Brenner Base Tunnel has been delayed by close to 20 years and is now aiming to be completed in 2032.

In one recent funding round, demand for CEF transport funds was triple the available budget, underscoring the need for more strategic allocations. T&E argues that placing greater focus on short- and medium-term projects could accelerate connectivity and reduce emissions more quickly.

Carlos Rico, rail policy officer at T&E, said: “Megaprojects have helped give rail the boost it needs, but they’re draining resources from other vital parts of the network. The EU must address this imbalance and ensure that the Connecting Europe Facility supports all necessary upgrades.”

‘Key upgrades’, less money

Among non-megaproject initiatives, track electrification emerged as the top-funded upgrade, securing €3.1 billion (20% of CEF funds which went to rail), followed by line speed improvements with €2.8 billion (18%). However, most projects aiming to fill missing high-speed rail links are still at the study stage, with construction not yet underway.

The report identifies 84 projects as “key upgrades”, targeting goals such as boosting capacity, improving line speeds, and standardising track gauges. Yet the average funding per upgrade project was just €70 million, far below the nearly €1 billion average for each megaproject.

Signalling stuck in the slow lane

Perhaps most concerning to T&E is the lack of progress on rolling out the EU’s standardised signalling system, the European Rail Traffic Management System (ERTMS). Between 2021 and 2023, just €0.7 billion—or 3% of the CEF Transport envelope—was directed toward ERTMS deployment.

2024’s preliminary figures show a boost for ERTMS, which the NGO calls a “positive development that puts it on a hopeful path”. However, they state “ERTMS funding is still trailing behind other essential upgrades, as it received only close to a third of the funds directed to rail electrification”.  That is despite its role as a legal requirement on core TEN-T corridors by 2030 and a pillar of cross-border rail interoperability.

The report notes that countries such as Germany, France, and Poland continue to lag behind on ERTMS implementation. T&E recommends integrating the system into military mobility funding to enhance cyber resilience and dual-use potential.

The next EU budget

With more than three quarters of CEF funds having been spent in its first three years, it is currently unable to properly fund the adaptations needed to adapt the infrastructure to the challenges of today, says the report.  “While frontloading investments makes sense to effectively kick-start infrastructure projects, it leaves the CEF vulnerable to unexpected developments.”

Looking ahead to the next EU Multiannual Financial Framework (MFF) in July 2025, T&E is calling for a rebalanced approach. First of all, the next round of CEF should have a larger budget to reflect the higher ambition that resulted from the revision of the TEN-T regulation, argues T&E. The advocate group for clean transport and energy estimates that a 25% increase in the CEF rail budget could double funding for crucial upgrades, without cutting off support to necessary megaprojects.

The future of dedicated transport funding under CEF has been shaky recently, with the European Commission initially dubbing whether to instead go for national and regional investment plans and thus dissolve the fund into a broader pot. From recent leaked draft legislation outlining the next long-term budget strategy, reported by Euractiv and Politico, it appears that CEF Transport will still have its place, however.

In T&E’s view, CEF Transport is more important than ever, but the current model is oversubscribed, fragmented, and not delivering the rapid integration the EU needs.  Carlos Rico: “Boosting rail is vital for Europe’s economy and defence, but funding must match infrastructure goals. The EU budget, high-speed rail plan, and the Military Mobility strategy should prioritise key upgrades and dual-use projects.”

Cross-continental rail logistics remain complicated, but are a seemingly attractive option nonetheless. The CEO of the Aprin Dry Port in Tehran, which received the incoming train from China, sees plenty of benefit.

Speed, money and sanctions

For example, he points out that trains are much faster than ships. Whereas a ship would take 30 days to reach Iran, the Xi’an – Tehran train covered the entire distance in only 15 days. Moreover, the Tehran Times has called rail “the most suitable, closest, safest, and cheapest option for China’s access to markets in West Asia and Europe”, based on expert insights.

However, speed and money are not the only factors that count. Iran and China are both motivated to find more secure trade routes, meaning less exposed to American naval power. After all, the American navy remains the dominant force at sea, and the White House is considering a plan to inspect Iranian ships to block maritime oil shipments, Reuters reported in March. The US has instated far-reaching sanctions against Iran, limiting its ability to fuel its economy through trade.

China – Europe

Despite not being subject to those same sanctions, China has similar reasoning. It also wants to maintain connections to foreign markets (importantly, Europe, for which Iran can be a transit country) to keep the money flowing into its coffers. Having a viable overland route makes logistics less vulnerable, in case maritime routes are not, or less, available. So when in pertains to Iran, China can better guarantee oil imports.

In line with those interests, countries are now putting together plans to facilitate greater trade flows via the rails. For example, Iran and key transit country Turkmenistan are reportedly working on a framework to grow the annual rail freight turnover from 1,6 million tonnes to 4 million tonnes annually. To make that happen, Iran has identified the Sarajs, Lotfabad, and Incheburun border crossings as locations to “resolve a set of problems”.

“We take care of all administrative and customs aspects and can collect goods anywhere in China”, Ziegler explains. The logistics company has connections with important industrial centres in China, Japan, South Korea, Thailand, Vietnam and Myanmar. It collects freight from those places and then puts them on a train in Xi’an. “In addition, our tracking system ensures full transparency regarding the estimated time of arrival.”

Russia says it’s not so bad

In the meantime, according to the explanation of the Russian Federal Customs Service, while there were several cases of additional checks of transit cargo delivered from China with the final destination in the EU, these cases are not widespread. Most cargo which became a subject of additional inspections has already received a green light for the further delivery outside the customs border of Russia.

Russia continues transit of rail cargo via its territory in standard mode without any additional inspections in cases which are not associated with the need of such inspections, according to recent statements of representatives of the Russian Federal Customs Service.

This year container cargo deliveries by rail transport on China-EU direction are steadily recovering after two years of serious stagnation. According to earlier data of the Russian Ministry of Transport, in the first half of 2024 the growth was equivalent to 35 per cent year-on-year basis, while the same trend is also observed in the second half of 2024. There is a high possibility that these deliveries may reach pre-crisis volumes (about 400,000 TEUs) already at the end of the current year.

Sea shipping transit times are rising

One of the reasons for this is the instability in the Red Sea, with the ongoing threat of attacks from the Islamic Houthi groupings. Due to this, shippers are once again paying attention to the trans-Russian corridor. In general, the requests for rail transit through the Russian Federation had grown by 40 per cent after the Houthi attacks in the Red Sea. According to representatives of RZD, the speed of delivery of goods from the borders of China to the borders of the EU along this axis is still 5-7 days, three to five times faster than in the past.

Also, according to analysts, changes in the routes of ocean-going vessels via the Cape of Good Hope have led to an increase in transit time by an average of 10-14 days or more depending on the base port, an increase in operating costs and freight rates, as well as disruption to voyage schedules on one of the main trade routes between Asia and Europe. This has created the need to find alternative routes, and transit via Russian railways seems to be the most optimal solution.

Also the rail transit via Russia is still more convenient than other routes. As the current trade between China and the EU is increasing, the Middle Corridor does not yet have the necessary infrastructure capable of handling such volumes. In addition, the use of alternative routes is up to 30 per cent more expensive for shippers.

Given that prices for rail transportation from China to Europe have always been 1.5-2 times higher than sea freight rates, the main cargo in this direction is electronics, cars, auto parts, equipment, and other goods for which transit time is critical. For rail transportation, it is on average 12-25 days instead of 40-60 days by sea. Analysts also said that most consumer goods are not subject to sanctions and counter-sanctions, thus the direct route via Russia remains beneficial for the EU.

These figures include services to both European and Asian destinations. According to a Chinese source, 224 cities in 25 European countries and over 100 cities in 11 Asian countries were serviced by the China – Europe route.

China – Europe route important for supply chains

China’s railway operator says that the China – Europe route is important for international supply chains. Cross-border freight transportation ensures “the stability of international supply chains and injects a new impetus into China’s foreign trade development and high-level opening up”, it comments.

In total, China’s railways transported 332 million tonnes of cargo in June, up by 6,1 per cent from last year. The 266,5 billion tonne-kilometres in freight turnover amounts to a growth of 5,3 per cent.

Shipments of containers, automobiles and cold-chain cargo increased by 18 per cent, 12.1 per cent and 21.2 per cent respectively. All recorded new volume records.

First of all, railways across Europe do not enjoy the same uniformity that the roads do. “Different electricity standards, track gauges and train protection systems across Europe” are among the main handicaps for rail freight transport in Austria and Europe. Another impactful factor is the condition of the infrastructure and the general tendency to prioritise passenger services over freight across the Old Continent. Moreover, the market is changing, leaning towards more individual shipments which are much easier to carry out by truck.

Three scenarios

The study theorised three different rail freight growth scenarios. The first one implies that the modal split will remain the same as it was in 2019. The second one predicts that rail will grow by 2.2 per cent every year, which is what the Austrian Federal Railways predict as well. The final one, which is the most optimistic and least realistic, is based on the assumption that rail will account for 40 per cent of the modal split in 2040.

“The result of all three scenario analyses is that road will continue to be the dominant mode of transport”, the study conlcuded. If the 2.2 per cent yearly increase of rail freight is met, road freight is still estimated to grow over three times faster. Even with a 40 per cent market share of rail freight by 2040, road transport would have increased by 17 per cent by then, remaining the preferred transport mode. In order to meet the decarbonisation goals set in Austria and Europe by 2040, the study claimed, rail freight transport would have to double, which is not a feasible initiative.

Focus on making road transport greener

Kummer’s study also provided some data on what would help Austrian and European road transport to reduce their CO2 emissions by 2030, 2040 and 2050. Over the next six years, the main actors in improving the sustainability of road transport would be battery electrics and hydrogenated vegetable oil (HVO). Hydrogen will keep playing a minor role, while liquefied natural gas “will continue to fail to gain ground”. Even with these developments, however, the goals set for 2030 will be missed by 14 per cent, according to the study.

By 2040, the potential battery electrics will significantly rise and hydrogen will catch up with HVO. “Measures such as the approval of higher truck capacities, the adjustment of driving bans” will not be as effective but are still indispensable, the study said. Once again, all these measures would not be enough to reach the goals set for 2040 in Austria and Europe, which will be missed by 7 to 14 per cent.

“If all potential is successfully exploited, climate-neutral road freight transport could be achieved by 2050”, the study underlined. This would mean that over 40 per cent of the road transport fleet would be powered by batteries, another 40 per cent each by hydrogen or HVO and the rest by e-fuels. However, the likelihood of this scenario does not seem to be very high.

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A pilot for the route may start in late 2024. It would be the first fresh produce train connecting northern and southern Europe. It will carry around 42 containers with fresh products.

The train will stop at various locations along the route. Rotterdam would be its main intermediate stop, as the port of Rotterdam imports many agricultural products. The city’s surrounding areas also host a lot of horticultural business.

At the moment, most agricultural products entering the port of Rotterdam are transported further by road. According to the Dutch province Zuid-Holland, road transportation of goods between Oslo and Valencia takes one hundred hours. Trains can reduce the duration of the trip to seventy hours. It would also save up to 90 per cent of carbon dioxide emissions.

Bureaucratic hurdles

In order to make the route a reality, many “bureaucratic hurdles” must be overcome. According to Zevenbergen, it is crucial to create space on the busy European railway network. “There should also be agreements about prioritisation,” he said. “If schedules change, are you going to let a fresh produce train wait for another train to pass? We also need more uniform fares. Currently, each country has its own rules. The ultimate goal is that we are going to have a train that doesn’t end up on the side tracks and is therefore faster and cheaper than road transport.”

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One of the possible issues highlighted in the document is that many of the Chinese companies investing in Europe are state-owned, “so their actions are not driven only by purely commercial motives”.

The study investigated five types of risks (EU-level dependency risk, individual dependency risk, coercion and/or influence risk, cybersecurity/data risk and hard security risk) and their likelihood. Moreover, the study provides policy recommendations to increase knowledge concerning Chinese investments in the EU and strengthen the Union’s response both within and outside its borders.

Policy recommendations

The study listed various policy recommendations for the EU to have a clearer picture of Chinese investments in non-maritime infrastructure in the Old Continent. To gain more knowledge about these initiatives, the study advised that both the EU and all Member States should carry out studies. The EU should focus on “Chinese companies’ involvement in management software and other software along the TEN-T core network”. Member States, on the other hand, shall assess the presence of Chinese companies across their sections of the TEN-T Corridors.

The rest of the recommendations aim at reinforcing responses from the EU in the context of Chinese investments in non-maritime infrastructure. More specifically, the Union should encourage Member States to recognise the TEN-T network as critical infrastructure. Additionally, the study claimed there is a need for better guidelines concerning cargo safety, data collection and screening mechanisms to improve the monitoring of Chinese investments within the EU. Finally, the study suggested that the EU should “fund more investment in transport infrastructure” in neighbouring countries.

Germany: is COSCO’s presence in Hamburg a threat?

When it comes to Chinese investments in Germany, the study analysed COSCO’s acquisition of 24.99 per cent of the shares of the Container Terminal Tollerort (CTT) at the port of Hamburg. The study claims that the main possible risks concern Chinese influence and coercion, given the importance of the port. More specifically, it talks of “threats of coercion over the flow of trade between different European hubs, which could harm TEN-T projects along those logistics networks”. However, the study failed to mention that, not long after the CTT deal, COSCO sold its shares in a terminal currently under construction in Germany, the Duisburg Gateway Terminal.

Greece: not enough volumes to consider China as a threat

Concerning Greece, the study examined COSCO’s presence at the port of Piraeus. The Chinese company operates two of the three piers at the port, with a concession expiring only in 2052. Moreover, in 2016, COSCO became the majority shareholder of the Piraeus Port Authority (PPA). In addition, the two entities signed an agreement in 2021, with which the Chinese giant would get an additional 16 per cent of PPA’s shares as long as some conditions are met.

“Chinese imports into the European market transshipped via the Port of Piraeus points to a figure between 10 and 15 per cent”, the study underlined. Here, intermodal connections are dominated by COSCO and its subsidiaries, including Ocean Rail Logistics (ORL). Risks in Greece are considered lower than the ones in Germany, the study said. This is mostly because “the railway transport corridor from Piraeus to Budapest still absorbs small amounts of containers at this stage – less than 200,000 TEUs in 2022”.

Serbia and Hungary are where risks are higher

The study claimed that the highest risks connected to Chinese investments in the EU are being run by Serbia and Hungary. Here, China is one of the main actors financing the construction of the Budapest-Belgrade high-speed railway. “Coercion and/or influence risk represents the most important risk area in Hungary at present”, the study pointed out. The same was said for Serbia, where China is the single largest investor. However, the two countries might consider these risks as opportunities.

For example, Hungary has been looking east since 2012, when it launched its Eastern Opening Policy. Moreover, the study presents the BILK Terminal in Budapest as an example of Chinese influence in Hungary, where COSCO owns 15 per cent of the shares. However, it needs to be said that the main owner of the terminal is Austrian Rail Cargo Group (RCG), which holds the remaining 85 per cent. For Serbia, the study states that there is a strong dependence on China for the country’s IT sector, with Huawei being one of the main partners. This, according to the report, increases the risk of cybersecurity.

Turkey and the Middle Corridor

The study also analysed Chinese investments in Turkey, which is not a EU Member State but has been in negotiations to become one for almost 20 years. Here, most of the investments revolve around the Middle Corridor. The route has never been considered as a valid alternative to the northern route connecting China and Europe through Russia. However, the recent geopolitical developments led to more investments in the Middle Corridor. For Turkey, the study did not identify any risk as highly likely.