Rail Baltica’s role in shaping the future of freight logistics

In the beginning of February, Rail Baltica team actively participated in the LOGY Conference, organised annually by the Finnish Association of Purchasing and Logistics “Revolutionising Supply Chains – with AI & Sustainability,” bringing together key players in business and logistics to explore sustainable and smart solutions in their activities.

The conference, held in Helsinki on 8 February and continued in Tallinn, Estonia on 9 February, featured sessions on internal logistics, procurement processes, sustainable logistics, and the integration of artificial intelligence in the supply chain. Rail Baltica’s presentation, led by Kristīne Malnača, Head of Global Project Strategy and Economics Department, RB Rail AS, highlighted the project’s significance in European transportation development. Malnača emphasised that as the project advances, it not only ensures seamless passenger services but also unlocks abundant opportunities for the freight logistics industry.

“Rail Baltica, the ambitious railway infrastructure project connecting Finland, the Baltic States, and potentially extending to Central Europe, holds a great significance in European transportation development. As the project progresses, it not only promises modern passenger services but also presents numerous opportunities for the freight logistics industry,” said Kristīne Malnača, Head of Global Project Strategy and Economics Department.

It was emphasised during the event that Finland’s logistics industry has faced challenges in the past years and needs to adapt its strategy due to the closure of borders between Finland and Russia, which has halted all East-West transit. Other challenges resemble those encountered by industry players elsewhere; for example, there is a shortage of the workforce, especially for first- and last-mile logistics. This shortage provides an incentive to develop driverless solutions, including autonomous vehicle development, remote driving, and shunting. Regarding Rail Baltica, it is necessary to develop services that allow the transportation of unaccompanied trailers. Another challenging topic for the industry, echoing the theme of the LOGY Conference 2024, is the need to integrate environmentally sensible solutions while remaining conscious of the impact on costs.

“Finland stands as one of the neighbouring countries poised to benefit from the Rail Baltica project. This was evident during meetings with Finnish logistics companies in Tallinn, where the atmosphere and spirit were supportive and cooperative. It was concluded that commercial readiness holds equal importance as the construction of the railway itself. Thank you, Finland/Logy24, for your support. We look forward to our next meetings,” said Heigo Saare, Head of System Operations and Safety at Rail Baltic Estonia.

Rail Baltica experts revealed that, beyond serving the freight industry, one of its primary objectives is to provide comfortable and modern passenger services, including featuring interline/codeshare ticketing and a single check-in for the entire journey, with the aim of enhancing the passenger experience and promoting rail travel as a convenient and attractive option for commuters. The seminar audience expressed unanimous interest in utilising the Rail Baltica corridor as passengers, specifically highlighting the appeal of car-carrier train services for comfortable and affordable travel, especially for the Finns.

Intermodal Logistics Opportunities along the Rail Baltica Route

Rail Baltica opens new intermodal options by developing connectivity between different modes of transportation, including air to rail, marine to rail, road to rail, and 1435 mm rail to 1520 mm rail. The aim is to enable efficient and cost-effective movement of goods, catering to the evolving needs of the logistics industry. According to the latest data, the expected volume forecast between Finland and the Baltics would amount to 375,000 tonnes per year, primarily driven by bulk commodities (approximately 70% comprising forestry, gravel, and refined petroleum products). However, Finnish industry players emphasised that the logics and economics of transportation govern the world of logistics. While companies seem open to the idea of using the Rail Baltica railway for freight transportation, they note that the new infrastructure will hardly compete with maritime transport for the transportation of low-cost bulk from Finland to continental Europe beyond the Baltics. Rail Baltica could be competitive for bulk transportation in cases where the destination is within the Baltics.

The representatives of the LOGY conference generally agreed with the findings of the freight user survey conducted by RB Rail AS in 2023. From a customer’s perspective, the railway infrastructure should be developed and accessible as one seamless network across the Baltics. Time and cost of service are crucial for the railway to compete with existing modes of transportation, and Rail Baltica must include smooth transshipment service at freight terminals. The services developed along Rail Baltica must also align with market expectations regarding data management, including real-time data for day-to-day information exchange, cargo accompanying documents for track and trace capabilities, and information on delays and problems encountered both at terminals and during rail freight transportation.