Mathilde Carlier
Research Expert covering transportation and logistics
In 2020, the global rail freight industry was worth 247.4 billion U.S. dollars, projected to rise to around 278.6 billion by 2026. Approximately 3.13 trillion tonne-kilometers of goods were hauled across the European rail network in 2019, making it the second-largest region for rail freight worldwide. Despite its global significance, rail freight still has a ways to go in the region. In the European Union, road and sea cargo recorded higher freight mileages in 2019—over double that of rail—despite rail freight reporting the second-lowest average greenhouse gas emissions. With the increasing concerns over more sustainable transportation in the region—such as the EU’s commitment to cut GHG emissions 55 percent below 1990 levels by 2030—demand for rail freight might rise in the following years.
Baltic states had packed freight trains, with Latvia hauling over 1,700 tonne-kilometers of goods per freight train kilometer in 2020, and Lithuania hauling over 1,600 tonne-kilometers per freight train kilometer that same year.
While Western Europe did not depend so heavily on rail for cargo traffic, the region was the European rail freight leader. Germany headquartered the leading rail freight operators in the European Union in 2020—Deutsche Bahn and VDV—followed by Austria’s ÖBB. In 2021, the Deutsche Bahn transported around 226.5 million tons of cargo in Germany.
Rail freight is particularly important for landlocked countries such as Hungary and Slovakia, but the industry has been disrupted by the Russian invasion of Ukraine. Russia and Ukraine boast two of the ten largest railway networks worldwide, and most of the European freight to China went through these countries—around 2.5 trillion tonne-kilometer of goods were hauled through Russia in 2020.
A sector driven by country-specific needs
Dependence on rail freight in Europe varied widely across countries. Western European nations such as the United Kingdom, France, and Germany, used their extensive railway network for passenger transport, with rail freight only making up six, 15, and 23 percent of their railway traffic. In contrast, Central Europe and the Balkans relied more heavily on rail freight. A third of railway traffic in Poland came from freight services, which also represented 30 percent of Bulgaria’s total traffic.Baltic states had packed freight trains, with Latvia hauling over 1,700 tonne-kilometers of goods per freight train kilometer in 2020, and Lithuania hauling over 1,600 tonne-kilometers per freight train kilometer that same year.
While Western Europe did not depend so heavily on rail for cargo traffic, the region was the European rail freight leader. Germany headquartered the leading rail freight operators in the European Union in 2020—Deutsche Bahn and VDV—followed by Austria’s ÖBB. In 2021, the Deutsche Bahn transported around 226.5 million tons of cargo in Germany.
Challenges faced by the industry
The COVID-19 pandemic particularly impacted rail freight in Europe, with most European countries recording a drop in freight volume hauled and in freight train departures. Latvia was the most profoundly affected—cargo train departures dropped 37 percent between 2019 and 2020, while the country’s freight traffic nosedived by 47 percent during that same period. Overall rail cargo volume across the region only started to recover from the pandemic in November and December 2020, when freight volume increased year-over-year.Rail freight is particularly important for landlocked countries such as Hungary and Slovakia, but the industry has been disrupted by the Russian invasion of Ukraine. Russia and Ukraine boast two of the ten largest railway networks worldwide, and most of the European freight to China went through these countries—around 2.5 trillion tonne-kilometer of goods were hauled through Russia in 2020.
