Green Deal Fallout: Coal Ban Leaves PKP Cargo Fighting for Survival

The Green Deal is reshaping Europe’s freight landscape, and PKP Cargo is paying the price. With massive losses, shrinking market share, and tough competition, Poland’s rail giant is in crisis.

"The decision on coal has cost us half of our market share." Facing multimillion-dollar losses, declining revenues, and increasing competition in the freight transport market, PKP Cargo has embarked on a restructuring process that includes layoffs across the group.

In the third quarter of 2024, PKP Cargo reported a net loss of EUR 80.3 million. Speaking to Raport Kolejowy, Rynek Kolejowy, and Biznes24, company executives, including board member and acting CEO Marcin Wojewódka and interim CFO Monika Starecka, addressed the challenges. Contract revenues fell by 15.6% compared to the same period last year, totaling just over EUR 234.4 million.

PKP Cargo Loses to ČD Cargo Poland

Starecka attributed the poor financial results largely to the company's failure to secure major contracts in 2023 under the previous leadership. Key tenders for coal transport, such as those issued by ENEA and Bogdanka, two prominent energy and mining companies, were lost. One of these significant tenders was instead won by ČD Cargo Poland, as RAILTARGET previously reported.

Three years ago, PKP Cargo held a 40% market share in intermodal transport, according to Starecka. Unfortunately, the decision by [then-Prime Minister Mateusz Morawiecki - as noted by RAILTARGET] to phase out coal has halved the company’s market share, which now stands at just 19%.

PKP Cargo Under Court-Supervised Restructuring

According to CEO Marcin Wojewódka, PKP Cargo is striving to regain its former market position. Currently, the company is undergoing court-supervised restructuring, which is expected to conclude by February next year. However, Starecka noted that the full effects of this restructuring will only be felt by 2025. The current budget is burdened by exceptional expenses, including severance payments and salaries for employees who have been laid off or placed on temporary leave.

The initial benefits of the restructuring should become evident as early as the first quarter of next year. The process also involves optimizing various operations, with improvements expected to materialize at different stages over time. PKP Cargo faces growing competition from major international operators like DB Schenker as well as smaller, more agile freight companies that can respond quickly and flexibly to customer demands.

Daily Challenges: Liquidity and Financial Strain

One of PKP Cargo’s pressing issues is maintaining liquidity to pay wages and severance benefits. The company has assured labor unions that payments will be made on time, including interest for delays. Starecka pointed out the precarious financial situation, stating that a single invoice for rail infrastructure usage—amounting to tens of millions of zlotys—could jeopardize liquidity.

Source: Raport Kolejowy; Rynek Kolejowy; Biznes24; RAILTARGET