Freight rail transport will grow everywhere except in Europe. Expert: There is no reason for optimism here

The global freight rail transport market is expected to grow at an annual rate of 2.6 percent by 2028, although this trend will vary by region. According to the regular annual report on freight rail transport and trends published by SCI Verkehr, freight rail transport rates remain positive in almost the entire world, except in Europe. Europe is facing a decline in transported freight due to a weakened economy, which reached a record €1.9 billion last year, 2023.

Freight rail transport will grow the most in North America, in the CIS Eurasian region which includes countries that emerged after the collapse of the USSR (the so-called Stan countries), and in Asia. These markets are currently the largest in terms of freight rail transport, while Europe ranks fourth. North America has not recorded growth in the last five years, while Asia, CIS, and Europe have recorded positive results. Despite wartime challenges, Russia shows positive development due to rising prices. In the upcoming period, continued positive development is expected in Asia and CIS, but at a slower pace, while North America will grow again. On the other hand, Europe is facing a decline due to reduced demand for transport and freight wagons.

The European intermodal rail market is suffering from a decline in transport volume, especially in the container wagon sector, which will have a greater impact in 2025 and 2026. Although demand for other types of wagons, such as car wagons, is developing positively, this cannot fully compensate for the decline in intermodal business.

And although the document does not mention or address the situation in any European country, it is clear that due to expectations of a decline in traffic in Europe, Croatia will be affected, which is already not making significant progress in freight rail transport. This is not even the fault of the operators, but is largely due to poor infrastructure.

Tomislav Josip Mlinarić, an expert on the railway transport system from the Faculty of Transport Sciences, says that in Croatia, projects related to the railway are being realized slowly, do not have adequate technical-technological support in relation to transport-logistics requirements, and that we are significantly lagging behind most other EU countries that also had to invest significantly in railway infrastructure to make it more competitive, and which have absorbed EU funds more efficiently and effectively than we have, ensuring funding from their own sources as well.

– We have finally started to realize some projects in railway infrastructure, but not quickly and effectively enough. We had to return part of the non-repayable funds from EU funds, for example, on the Dugo Selo – Križevci project, through penalties due to the quality of realization, and we have not even started the key project of the lowland railway towards Rijeka, the one from Karlovac to Rijeka, which is actually critical infrastructure on that strategic route of Croatia. The main problem is that we have not established a separate directorate or agency that would exclusively operationally implement and supervise the implementation of these projects, we have not trained a quality national construction operation to carry out these projects, nor have we secured a stable source of funding for these projects that would not rely solely on EU funds. And finally, we are not currently implementing priority projects of our railway infrastructure in a technical-technological sense. These are the reasons why there will certainly be a lack of growth in domestic freight rail transport in the next period, and why it will not become more competitive in the long term.