Reimagining Polish Rail Freight: Navigating Coal Decline with Intermodal Growth and EU Support

As coal shipments decline, Poland’s rail freight sector looks to expand intermodal transport and secure EU and government support. Industry leaders and policymakers collaborate to chart a path forward.

Challenges and Decline in Poland’s Rail Freight Sector

Poland’s rail freight sector faces substantial challenges, with a steep decline in coal transport prompting the industry to seek alternative growth avenues. Last week, leaders from the rail freight sector and government officials met at the Ministry of Funds and Regional Policy for a summit titled How to Bring Rail Freight Out of Recession? The session pointed out Poland’s pressing need to adapt, especially in light of recent data showing a downturn in rail freight volume. In 2023, Polish railways transported 231.7 million tonnes of freight, marking a 6.8% decrease compared to the previous year. The trend has continued in 2024, with rail freight volumes from January to September down by 3.7%.

Decline of Coal Shipments and the Rise of Green Transport

The decline in rail freight is closely tied to reduced coal shipments, a shift largely driven by the EU’s Green Deal. In the second quarter of 2024, the volume of transported iron ore, aggregates, and other materials (16.8 million tonnes) surpassed fuel shipments, including coal, for the first time, reflecting Poland’s move towards a greener economy. This shift has forced rail operators to explore intermodal transport as a potential alternative.

PKP Cargo, currently under court-supervised restructuring, is leading efforts to increase its intermodal transport operations. Marcin Wojewódka, PKP Cargo’s acting CEO, commented on the changing needs, stating, "Nuclear power plants do not require the tens of thousands of wagons once needed for coal." Therefore, the company has had to make substantial adjustments, reducing its workforce from 13,711 employees in July to 10,046 by year-end.

Intermodal Transport Potential and Infrastructure Needs

Industry experts agree that while intermodal transport offers a path forward, it may not fully offset the decline in coal transport volumes. DB Cargo Polska’s CEO, Marek Staszek, said that Poland’s current intermodal capacity primarily serves cargo from Polish ports, Ukraine, and the Far East. To replace coal volumes effectively, Poland would need two or three additional ports with transshipment volumes comparable to Gdańsk. However, intermodal transport in Poland has shown promising growth in 2024. In the second quarter, railways handled 6.9 million tonnes of intermodal freight, totaling 2.3 billion tonne-kilometers, representing a year-on-year increase of 19.2% in weight and 16.2% in freight capacity, spurred by EU support for infrastructure and rolling stock.

Government Support and EU Funding for Rail

At the summit, Adrian Mazur, Director of the Transport Strategies Department at the Ministry of Infrastructure, pointed out the government’s commitment to supporting rail transport. Poland’s new government has pledged to continue backing rail freight through updated strategic planning and budget allocations. The Polish government plans to use its upcoming EU Council Presidency in the first half of 2025 to advance rail integration within the European transport network. Key legislation, such as the recently approved TEN-T regulation, is expected to facilitate Polish rail’s alignment with EU standards. In addition, Poland’s 2021-2027 budget includes approx. EUR 392.5 million dedicated to intermodal projects, with funds sourced from the EU’s post-Covid National Renewal Plan and other regional programs. These funds aim to bolster Poland’s infrastructure, including the acquisition of new rail vehicles, enhancing the rail sector’s resilience and adaptability.

Masterplan for Freight Transport: A Strategic Vision

A comprehensive Masterplan for Freight Transport in Poland was presented during the summit, providing insights and recommendations for revitalizing Poland’s rail freight sector. Developed collaboratively by Professor Stefan Akira Jarecki from the Warsaw University of Technology and Jakub Majewski, President of the ProKolej Foundation, the masterplan offers a multi-pronged approach to increase freight volumes and better align rail services with market demands. The plan advocates for a customer-centric approach in freight services, greater public engagement in rail’s benefits, and exploring new, untapped transport opportunities. According to the authors, these steps are essential for securing long-term growth in the sector and positioning rail as a competitive alternative to road transport.

Polish Ministry of Funds and Regional Policy meets to tackle freight rail challenges. PKP Cargo to expand intermodal transport, but industry warns coal shipment loss won't be easily offset.

— Hashtag Poland (@HashtagPoland) November 7, 2024

Need for Public Awareness and Legislative Support

Industry leaders believe that raising public awareness about rail freight’s benefits is critical to achieving the sector’s growth goals. With many policymakers and the general public unaware of rail freight’s potential, promoting rail services in public discourse is seen as essential to support infrastructure investment and regulatory reforms. "The debate in the public space will ultimately influence which solutions are implemented and which remain on paper," a participant noted.

Source: Izba kolejowa PL; wpn.pl