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.

Novi Sad is the first terminal in Serbia to offer this kind of regular intermodal connection to Western Europe, says DP World.

An answer to road challenges

This new intermodal rail service is a response to increasing regulatory and operational pressures on long-haul road transport between Serbia and Western Europe, the Emirati company elaborates. Unpredictable transit times and growing exposure to European Union road freight rules, including the Entry/Exit System (EES) and stricter driver mobility requirements, are making intermodal rail a more attractive option.

“As regulatory requirements for road transport continue to evolve across the European Union, customers are seeking solutions that offer greater speed, predictability and lower administrative complexity. Intermodal rail offers all three, while also delivering measurable carbon savings”, said Vladica Ćulafić, Chief Commercial Officer at DP World Novi Sad.

The history of the project

Hungary considered the construction of a new line between Budapest and Kelebia, on the border with Serbia, as one whole project, which started in October 2021. Serbia, on the other hand, divided the new line between Belgrade and Subotica into sections. The renovation of the stretch between the capital and Novi Sad started in 2017 and was completed in 2022. For the Novi Sad-Subotica section leading into Hungary, construction started in November 2021.

The total investment for the Budapest-Belgrade new line should be around four billion euros, but it is difficult to have an exact figure. For the two Serbian sections (Belgrade-Novi Sad and Novi Sad-Subotica), contracts for more than 900 million euros each were awarded to a Chinese consortium formed by China Railway International and China Communications Construction Company. For the Hungarian part, the cost should revolve around two billion euros and was built by a Chinese-Hungarian consortium..

A curious request

Passenger traffic is expected to begin in a couple of weeks on 15 March. In his LinkedIn post, Zsolt had a somewhat peculiar requests for drivers who will find themselves crossing the railway. “For a long time, people living in the region could get used to the fact that there are no trains running on the tracks”, (…) We ask everyone not to drive out of habit: to approach railway crossings in full compliance with the traffic rules and with due care”, he stressed.

The total project cost is estimated at 230.8 million euros. The investment is primarily supported by a 63 million euro loan from the European Investment Bank and a substantial 112.6 million euro grant from the European Commission, provided under the Western Balkans Investment Framework. Additional funding includes a 50 million euro loan from the European Bank for Reconstruction and Development and a 5.2 million euro contribution from the government of Montenegro.

Western Balkans – EU

“This project represents one of the most important investments in Montenegro’s railway infrastructure in decades and a clear signal of trust from our European partners”, commented Montenegrin Minister of Transport Maja Vukićević.

“Our long-standing cooperation with the European Investment Bank has been crucial in modernising the Bar–Belgrade railway corridor, which is the backbone of sustainable transport in Montenegro. By upgrading the Bar–Golubovci section, we are not only improving safety, efficiency, and service quality, but also strengthening Montenegro’s role as a key transport hub between the Western Balkans and the European Union. This investment directly supports our green transition, economic development, and EU accession goals.”

Transport Community has published two separate reports, detailing the progress made in the Western Balkans, including their “Next Generation Rail Action Plans”, and in Ukraine, Moldova and Georgia. The organisation thus details the rate of transposition of EU law, but also progress made on broader action plans. Those include not only transposition of laws, but also other measures, like EU cooperation, sustainability measures, infrastructure projects or operational improvements.

Progress in Ukraine, Moldova and Georgia

These reports offer some interesting insights into the state of rail integration in the region. Let’s begin by looking at Ukraine, Moldova and Georgia. Progress on the adoption of EU regulations is very limited, with Georgia taking the lead.

The country has fully adopted half the regulations on train driver licensing and around a third of the acquis on railway safety. It lags behind on interoperability, having adopted none of the regulations. That may not be all that surprising, considering that Georgia is far away from the European rail network. Interoperability is likely low on the priority list, especially considering the importance of transit freight from Azerbaijan and Russia.

The EU integration process of Georgia has essentially halted, and one should not necessarily expect further progress on rail regulation alignment. Due to the country’s location, one could say that this is not exactly a catastrophe. Georgia is of limited relevance to the EU’s rail network, occupying a more important position on the INSTC and Middle Corridor.

No full transposition

Neither Moldova nor Ukraine has fully implemented any aspect of the EU rail acquis. Moldova has made some progress across every area (working time and passenger rights, safety, interoperability, train driver licensing and market access), save one (a regulation relating to ERA). It has not fully implemented anything yet, however.

The same applies to Ukraine, but Transport Community notes that many draft pieces of legislation are currently awaiting adoption. That could significantly boost the rate of EU acquis adoption in Ukraine in the near future.

Progress in the Western Balkans

Let’s move on to the Western Balkans and take a look at the action plan for the region. Note that this goes beyond just the transposition of the EU acquis, but includes additional measures along key pillars: rail market access, interoperability, infrastructure modernisation, safety, driver licensing, regional cooperation and sustainable and multimodal measures. See the graph below for an overview of progress made (hover over the bars to get additional information).

On a national level, it is interesting to look at the rate of transposition of EU rail regulations. There is one clear champion in that area: Serbia. That is perhaps not entirely surprising, since the country has significant EU transit flows. Aligning itself with EU practices helps to streamline those operations, such as imports from the Greek port of Piraeus that travel towards logistics hubs in Hungary.

Serbia is the only country that has transposed a significant share of regulations relating to market access (7 out of 16) and has partially transposed two. The market access rules are supposed to improve competitiveness and create fair business conditions.

Albania follows behind Serbia with 5 regulations on market access fully transposed. All the others – North Macedonia, Kosovo, Bosnia and Herzegovina and Montenegro have barely implemented any market access regulations.

In terms of adopting interoperability measures, we have another champion: Montenegro. It has fully transposed 14 out of 22 legal acts. Those include TSIs on infrastructure, energy, locomotives, noise, safety in tunnels, control command and signalling and freight wagons. Serbia follows closely behind Montenegro, and Albania and Kosovo also have relatively good scores (41% partially transposed).

The key takeaway from the Western Balkans is that Serbia is far ahead of the rest, likely thanks to its key role as a transit country. Albania also performs well in adopting EU regulations. The others have fewer incentives to align themselves, and are therefore behind. The idea is that aligning with EU regulations will open up rail markets and allow for more competitive business, but success also depends on the rate of implementation in neighbouring countries, Transport Community points out.

Apart from the port of Thessaloniki, the Niš terminal also has frequent connections with the port of Rijeka in Croatia, Ljubljana, and the port of Koper in Slovenia. With those connections and the latest addition of the port of Bar, it is understandable that Niš is gradually becoming an important destination and transit hub.

Opening to Western Europe hubs

Another important recent development concerning the MBOX Terminal is the partnership with Kombiverkehr. The two companies commenced a service earlier this year that sees freight trains linking Wels in Austria and Niš. The service offers three weekly roundtrips between the two locations.

The partnership with Kombiverkehr opens up possibilities for multiple connections within and outside Germany, including Duisburg Ruhrort Hafen, Munich-Riem, Ludwigshafen, Hamburg, Hanover, Leipzig, the German Baltic Sea ports of Lübeck and Kiel, as well as Spain, France, Benelux, Great Britain, and Scandinavia.

Moreover, the Austrian company started a joint venture focussing on intermodal transport with Serbian logistics company Transfera in June 2024. RCG’s expansion outside of the Austrian borders is also reflected in the acquisition of Captrain Netherlands, finalised at the end of May.

As a result of the opening, Serbia now no longer needs to conduct border controls on its territory. The new way of operating allows for the two countries to significantly speed up border procedures. Freight trains stand to save at least an hour each trip, while passenger traffic will see travelling times reduced by approximately 30 minutes.

Precondition for economic development

“Through the investment in railway infrastructure and better connectivity between the south and north of Montenegro, the implementation of this project creates the preconditions for the quality development of the entire economy”, commented Filip Radulović, Montenegro’s transport minister.

“Simplified procedures at border crossings lead to reduced travel times, thereby attracting freight flows and directing them towards the Port of Bar. By working together on such projects, we contribute to mutual development and the connectivity of economies and better connections with the EU countries”, he added.

EU financing

The European Union financed the construction of the joint rail border crossing. “This reconstructed facility will become a modern railway infrastructure in one place for cheaper, faster, and simpler border crossings”, said Riccardo Serri, deputy head of the EU’s delegation to Montenegro.

“The joint border crossing in Bijelo Polje belongs to the railway interconnection of the TEN-T Core Route 4 and will not only improve ties between the two countries and their peoples, but will also stimulate economic activities and trade across the border.”

Carl Azinger, managing director at Rail Cargo Logistics, commented on the idea behind the deal: “Multimodality is the future and together with Transfera we want to develop tailor-made end-to-end solutions and establish them sustainably in Serbia and beyond.” An RCG spokesperson calls the creation of the joint venture “an invitation to our valued customers to also consider a competitive and sustainable modal shift.”

Cooperation with Transfera

Transfera is a big logistics player in the Western Balkans with a large network across many industries, making it an attractive partner for cooperation, the RCG spokesperson says.

Earlier collaboration has also sown the seeds for the joint venture: “For almost a year now, we have been organising intermodal transports together, such as a regular train which runs from the newly built terminal in Kruševac to Neuss via the BILK terminal in Hungary. Ultimately, it was this successful and pleasant cooperation that led us to the realisation that we could work together even more closely.”

An attractive market

There are various factors that make Serbia an attractive market for business expansion. “Serbia is a key player when it comes to connecting Turkey and Greece with the ports of Hamburg and Rotterdam as well as to Central European economies. In recent years, the country has taken important steps to rebuild the railway and modernise and improve the railway infrastructure. In the long term, we also want to transport from Serbia all the way to China and vice versa. Beyond that, the Serbian economy’s demand for sustainable transport solutions is increasing”, the company says.

After establishing joint ventures in Serbia and China, as well as taking over Captrain Netherlands, the focus of the company now seems to be on managing these new enterprises. “We are always on the lookout for new opportunities to expand our network. However, we are currently focusing on the development of our newly established subsidiaries”, RCG says.

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Nevertheless, Kombiverkehr will also benefit by opening up to a new market with much regional and cross-border potential. According to Susana Jozinovic, sales representative South Eastern Europe for Kombiverkehr, the positioning of the MBOX Terminal seemed to align seamlessly with the Frankfurt-based company’s network expansion plans. It should be noted that more companies, like METRANS, for example, have been tapping into the Serbian and Balkan markets recently.

An increasingly important hub

The MBOX Terminal Niš in Serbia started making the headlines in the summer 2021 when the project was nearing completion. The terminal already serves block trains organised by CMA CGM that link to the Greek port of Thessaloniki also carrying sea-borne volumes since it is connected with eight maritime services.

Apart from the port of Thessaloniki, the Niš terminal also has frequent connections with the port of Rijeka in Croatia, Ljubljana, and the port of Koper in Slovenia. With those connections and the terminal’s location on the map, it is understandable that Niš could become an important destination and transit hub with a crossroads function.