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Reviving the Rails: PKP CARGO's New Terminal in Zduńská Wola to End Transport Slumps

Reviving the Rails: PKP CARGO's New Terminal in Zduńská Wola to End Transport Slumps
photo: PKP CARGO, RAILTARGET Archive/Reviving the Rails: PKP CARGO's New Terminal in Zduńská Wola to End Transport Slumps
01 / 09 / 2023

PKP Cargo, the Polish freight carrier, is facing challenges in its container transport sector, reporting substantial declines in recent quarters. The company believes that its upcoming terminal investment in Zduńská Wola could be a game-changer for its troubled intermodal operations.

Dariusz Seliga, CEO of PKP Cargo, said the company is on a mission to reinvigorate its intermodal (container) transport services, a sector where it has recently underperformed and lost substantial market share to competitors. "Our goal is to gradually recover market share in the intermodal transport segment. We are focused on making our offerings more competitive and elevating the level of customer service," Seliga remarked.

Drastic Traffic Decline

In a concerning statistic, PKP Cargo transported merely 2.6 million tons of intermodal cargo in the first half of 2023, compared to 4.8 million tons over the same period the previous year. Furthermore, the turnover in so-called transport work plummeted by over half. The company attributes this steep decline to the war in Ukraine, which has adversely affected rail traffic along the key Eurasian route known as the New Silk Road. Other headwinds, including economic slowdowns and inflation, have compounded the problem, resulting in increased intermodal transport prices and a decreased volume of goods. Inadequate railway infrastructure and repairs along the east-west corridor also contributed to the poor performance.

Future Outlook on Operations

Management has high hopes for their forthcoming investment—a multimodal terminal in Zduńská Wola-Karšnica. This 13-hectare facility is expected to open in the fourth quarter of 2023, although it was initially slated for late October. Valued at over PLN 128 million, the terminal is anticipated to improve efficiency via an automated system for identifying and assessing container damage. Seliga added, "The new terminal will enhance the network of multimodal terminals in central Poland, thereby rendering rail freight transport more attractive in the region."

Ambiguity in Terminal Operations

Little is known about the current operational status of PKP Cargo's terminals. The company's reports do not disclose existing handling capacities or the extent of their utilization. Additionally, it remains unclear whether the terminals are positively impacting operational and financial performance. Despite being an area of diversified activity across several subsidiaries, management had indicated they were considering a terminal consolidation program, although little progress has been made so far.

Seliga, who assumed the role of CEO in 2022, reported first-half sales for 2023 at PLN 2,899.5 million, marking an 18.3% increase year-on-year. The consolidated EBITDA grew 64.5% within the same period, reaching PLN 611.2 million.

PKP Cargo is leveraging European CEF funds and Polish operational programs for fleet acquisitions and modernizations. It is also participating in the European DP-RAIL project, which aims to create a digital platform for data exchange among European freight carriers. Managed by the International Union of Railways (UIC), the project consortium includes PKP Cargo, DB Cargo, CFL Cargo, Rail Cargo Group, Lineas, and RAILDATA.

Source of information: Parkiet