Intermodal container operator Baltic Rail saw significant growth in terms of TEU handled in 2024. That is despite unfavourable circumstances: The company’s business is particularly affected by the fragile security situation in the Red Sea. Nevertheless, the setbacks have not stopped the company from achieving growth.
“We’ve had a difficult period in 2024, due to the Suez crisis. That has reduced our main activity”, Stephen Archer, CEO of Baltic Rail, explains to RailFreight.com. The company provides intermodal transport services for containers, especially on the Baltic – Adriatic corridor. Its niche product concerns fast connections from Asia, including Chinese, Korean and Japanese traffic.
Freight from that region is shipped via sea, through the Red Sea and Suez canal, into the Adriatic Sea and unloaded in the port of Koper. From there, Rail Baltic takes it further into Europe, running three trains per week from the port.
The crisis in the Red Sea has had its impact on traffic coming into the Adriatic. By extension, it has affected Rail Baltic’s business. Nevertheless, the company achieved 40,6 per cent in terms of TEU handled.
New terminal, new Baltic routes
“We have taken into use a new terminal in Székesfehérvár in Hungary, that is one of the reasons why our volume has increased”, says Archer. The terminal is used for Far East traffic, still through the Suez canal via CMA CGM’s service, which has continued through there.
At the same time, Baltic Rail’s terminal near Katowice is supporting connections to Gdańsk and Gdynia operated by Loconi International, the CEO says. “We have not operated this route in recent years and it is great to see the whole corridor working again.”
Middle Corridor: growth or redirection?
Middle Corridor traffic could also be a factor in the volume growth. Baltic Rail has done some traffic in that direction in 2024, but the question is if it constitutes growth or a redirection of traffic, explains Archer.
“Some exporters are looking to send their products from Poland to Koper, and from there to Poti in Georgia. They want to export to China and do not want to go through Russia. Since there is a trade imbalance between China and Europe, there is always free capacity in the eastern direction”, the Baltic Rail CEO says. “It just so happens that they chose our company to transport freight on the route to Poti, so they didn’t need to invest in their own train solution.”
2025’s outlook for Baltic Rail
Can Baltic Rail continue this trend of growth into 2025? Archer believes so. “We have had a reasonable start to the year, in respect of the corridor to the Adriatic”, he says. “We are hopeful that the ceasefire in Gaza will reduce the Red Sea tension and Suez traffic will return to normal.”
Archer also does not see the war in Ukraine settled quickly. “And even if that were to happen, trade flows are not likely to return soon.” Supply chains that left that route are very cautious, the CEO explains. “The conflict redirects traffic onto our business corridor, so we could benefit from that in 2025. On top of that, the Adriatic corridor is cheaper and less complex than the Middle Corridor.”