The plan envisages that rail freight transport among the signatory nations will meet and possibly exceed the volume recorded during the first decade of the 21st century, although the companies do not specify within which timeframe this should happen.

“The cooperation covers two key directions: the transport of goods between China and Europe via existing rail corridors, as well as the transport of goods arriving in or departing from European ports, between terminals on the European continent, supplemented by road transport”, writes Srbija Kargo. Much Chinese freight enters the Greek port of Piraeus, from where it travels to the European hinterland through North Macedonia and Serbia.

“Transport organised in this way brings numerous advantages – faster delivery, shorter transit times, greater cost-effectiveness, reliability in accordance with the timetable, more efficient logistics processes and lower environmental impact”, Srbija Kargo continues.

Key goals of cooperation

Rail freight operations on the cross-Balkan route should improve through the “integration of rail transport relations”, the simplification of logistics chains, common digital solutions, and enhanced cross-border cooperation, the involved companies state.

Moreover, the MoU identifies various areas for future cooperation. These include the development of intermodal transport (semi-trailers, containers), interoperability, knowledge transfers, simplified customs procedures and a digital data exchange. It also mentions coordinated rail infrastructure development, joint marketing efforts, and personnel training as potential areas for collaboration.

The government is reallocating an unspent 18 billion forint (47.1 million euros), which were originally intended to be spent on rail, to road infrastructure investments instead. “Apparently the Hungarian railways are in such good condition that there was no point in spending it”, said Vitézy. The former state secretary lamented the fact that the rail budget was already meagre, but now 90% of that budget is even going to be spent on the road.

Then there is news regarding spending on single wagonload operations. A subsidy amounting to 6.7 billion forint (17.5 million euros) is subject to cancellation. That money supported the modal shift by making the railways more competitive. In turn, points out Vitézy, the scheme also supported the MÁV budget by generating more track access charge income. The subsidy scheme was renewed in September this year, to the delight of the Hungarian rail sector. As it turns out, the sector celebrated too early.

Rail Cargo Hungaria plans business reductions

As a consequence of the Hungarian policy turnaround, the ÖBB Rail Cargo Group subsidiary Rail Cargo Hungaria has already amended its approach to SWL operations in the country. The company’s CFO Csaba Raisz told publication Világgazdaság of some of the changes the operator is implementing.

First off, RCH will no longer accept unprofitable contracts. That will mean cuts to its three million tonne SWL business and translates into a subsequent 10% cut in the company’s network. Customers will be able to load and unload goods in fewer places. “When we cut back the network, unprofitable transports are eliminated, but previously profitable ones can also become unprofitable”, Raisz explained.

Moreover, RCH plans to increase prices to offset the loss of subsidies and reduce its workforce. Some 500 people (out of 1,700) are expected to lose their jobs next year. RCH also plans to shrink its locomotive fleet, retire more wagons and reduce shunting capacity by 10%.

RCH is most probably not the only company that will change its approach to the SWL business in Hungary. Eleven other operators have benefited from the subsidies in the past year.

Rail Cargo Hungaria may purchase an additional 22 CRRC locomotives, according to Hungarian media. In line with earlier reports that CRRC is looking to build rolling stock production sites in the country, four of the 22 locomotives may be built in Hungary.

CRRC is looking to expand its activity in Europe, also beyond Hungary. For example, it acquired the Vossloh plant in Germany for 10 million euros in 2020.

Moreover, UZ Cargo Poland and Rail Cargo Hungaria will be working on cross-border transportation technology, as well as optimisating of the use of assets in international transportation for standard and broad gauge wagons. Lastly, the two signatories will cooperate in calculating tariffs and other transport costs, rolling stock provision and transport organisation, according to UZ.

Despite the impact on the infrastructure, Metrans underlined that none of their terminals have been hit by the floods. “today we can report that we have managed to find also alternatives for the routings and basically all the terminals are accessible by our rail system. We have managed to re-route trains within the network for the necessary time”, Kiss added.

Suspended services all over

The Czech operator ČD Cargo also mentioned that their services in Austria are significantly limited. “Trains do not run south from Vienna on the mountain line via Semmering. Due to the risk of flooding, traffic is also suspended on part of the backbone line between Vienna and Salzburg”, the company stated.

In addition, services from and to some destinations in the Moravian-Silesian and Olomuc regions, bordering with Poland, are suspended until further notice. Moreover, other companies have introduced bans, especially for cross-border traffic.

For example, Rail Cargo Hungaria cancelled all services through five border crossings between Hungary and Austria until today. Polish operator PKP Cargo also introduced a ban on transport on two border crossings between Czechia and Poland, in this case until 22 September.

V0 will connect Szolnok in the east with western Győr, close to the border with Austria and Slovakia. The line’s most important features include freight-only operations and bypassing Budapest altogether, thus avoiding bottlenecks in the metropolitan area’s rail infrastructure. The area is characterised by heavy passenger traffic.

A boom in traffic

Two founders of Hungrail explain to Hungarian publication Világgazdaság that the V0 line is vital for the Hungarian economy. According to one of them, CEO of Rail Cargo Hungaria Imre Kovács, combined transport in Hungary will boom in the coming years. “Current traffic will double in a maximum of two years”, he says. Subsequently, the country needs to invest in infrastructure to cope with that growth.

Kovács points to the growth of Hungarian industry, the settling of foreign companies, the resumption of freight traffic between China, Ukraine and Western Europe and the “hoped-for” end of the war in Ukraine as factors contributing to the expected boom in traffic.

Hungrail issues a stark warning

The Rail Cargo Hungaria CEO concludes that infrastructure investments are necessary. According to Kovács, there is no alternative route to the V0 line that can absorb the expected growth in traffic. “Without V0, the entire economy can collapse, as it cannot function without transport”, he says.

“At the same time, the schedule of the investment relies on the use of existing lines, and a short section of it overlaps with the Budapest-Belgrade railway. In this way, Budapest will be able to relieve certain traffic even before V0 is finalised. Of course, the real thing will be when the line reaches Győr. The Ferencváros shunting station could be relocated to the smaller shunting station in Szolnok or the Székesfehérvár region. Without such strategic decisions, it will be difficult to serve the domestic industry and to reach factories from the ports”, concludes Kovács.

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All experts agreed that the opportunities presented during this otherwise harsh period of war could be capitalised on in the future and make rail freight a central component for Ukrainian flows and Hungary one of its most important gateways towards the rest of European countries.

“We are only at the beginning”

When discussing the future of Ukrainian cargo on rail, Vernes was pretty straightforward: “we are only at the beginning,” he said, stressing that the current flows are a huge opportunity for the rail sector. However, he mentioned that it is unclear how long this opportunity will be around and urged the rail freight sector to “capitalise on it as soon as possible”. He added that rail infrastructure investments should also follow, yet, launching efficient services is the first step to attract those investments.

On their behalf, Gábor and Hernád underlined that despite the war, import rail volumes have increased in Hungary, obviously due to Ukraine’s export needs. Despite Talosi agreeing with Vernes that you cannot predict the future, he appeared pretty confident for one thing; that “rail routes will remain even if the Odesa port completely reopens.” Hernád also provided a more tangible forecast. “The prognosis is that if we keep offering options and services, the flows will remain even after the war ends,” she said.

Additionally, she highlighted Hungary’s role regarding these flows since she mentioned that Ukrainians now value transit alternatives through Hungary instead of only through Poland. The opening of the Adriatic corridor through the country played a crucial role in that, and that is why Ukrainian companies already consider using the route in the future.

Unprepared but agile

Gábor stressed the issue of rolling stock availability when serving Ukrainian flows. He said that the huge inbound volumes from the neighbouring country found everyone unprepared in terms of rolling stock and transloading capacity. Of course, the official opening of the EWG intermodal terminal in Fényeslitke will alleviate some of the transloading issues. Nevertheless, will the same apply to rolling stock availability?

According to Balogh, rolling stock has never been an issue for RCG since he claimed that they have the needed capacity. Yet, Talosi disagreed, underlining that rolling stock in Hungary, especially in terms of grain transport, is not where they need it to be. Nevertheless, Talosi said that collaboration between different companies in the country is the key to resolving this issue.

His comment indirectly touched upon another discussion point-that of competition in the country regarding Ukrainian volumes. Apart from Talosi saying that close cooperation is key, Gábor was also very illustrative: “the cake is big enough to satisfy everyone’s appetite. I believe we are not competing with each other,” he concluded.

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The Csongrád-Csanád county police posted on Facebook that signalmen will provide assistance to the night trains in three locations. Between the railway yard of Szeged and Röszke, between Röszke and the border, and at the Röszke station. Moreover, trains will initially be allowed to run at a maximum speed of 60 km/h at all railway crossings.

Connecting Asia to the Balkans

The line is part of the Budapest-Belgrade railway line. The works for the full reconstruction of the section are finally complete and will help connect Europe to Asia via Turkey and the Balkans.

Demand for freight transportation between Budapest and Belgrade has already experienced a rise in demand. Once the projects are finished demand will increase even more, according to Zoltàn Pafféri, CEO of Hungarian State Railways (MÁV). Starting yesterday, the company will be able to ensure border crossing for up to ten trains per day between 6 pm and 8 am.

The new line will benefit both rail transport and intermodal rail-water transport. Moreover, it may open up opportunities for the economic development of Hungary, considering that it connects Hungary with the most important rail freight routes, according to David Vitezy, the Hungarian Minister of Technology and Industry.

The Szeged-Röszke line will link Szeged with Subotica. However, works on the Hungarian side will continue and should be completed by fall, allowing passenger transport to start again as well.

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Doubled capacity

Responding to this demand, RCG has announced it will rapidly increase its grain transport from Ukraine, with plans to double capacity in a few weeks. The firm expects shipments to Austria will double and reach around 2,600 tonnes by the end of July, to free up storage space in Ukraine ahead of the next seedtime and harvest.

Clemens Först, RCG’s CEO, explained: “I’m glad Rail Cargo Group can make a small contribution to supporting Ukrainian agriculture in this difficult period and secure seeds and storage space for the next harvest while ensuring the supply of affordable grain worldwide.”

More through Hungary and Romania

Alongside increased shipments to Austria, deliveries to Hungary will also rise sharply. RCG now expects to increase the tonnage of deliveries to Hungary by as much as 66 per cent, reaching around 6,500 – 9,100 tonnes by the end of July.

Hungary has been a leading destination for rail shipments of grain from Ukraine. RCG’s subsidiary Rail Cargo Hungaria is responsible for around 75 per cent of grain exports from Ukraine to Hungary. This equates to about 10 to 15 weekly trains, with approximately 70 per cent of this grain staying in Hungary and the rest re-exported, primarily to Italy.

Further capacity increases are expected to support rail shipments via Romania, with RCG hoping to boost transport once current diesel shortages ease. Currently, RCG has four barges transporting grain via waterways to Constanța, carrying around 20,000 tonnes of grain per month, but may look to increase rail shipments should fuel supply issues improve. Until May this year, RCG transported over 33,500 tonnes of grain from Reni in the Odesa Oblast of south Ukraine to the port of Constanța on the western coast of the Black Sea in Romania.

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