Rail freight across Europe is grappling with a deepening crisis, losing market share to road transport despite overall traffic volumes increasing. Latest figures show the sector’s modal share dropped to just 16.4% in 2023, continuing a years-long decline that undercuts EU climate and modal shift ambitions.
Rail freight has lost nearly 2.5 percentage points of market share in recent years. Furthermore, the forecasted 1.3% annual increase in market share through 2030 appears unpromising, particularly given that it assumes favourable market conditions. A new market analysis by SCI Verkehr identifies falling demand for traditional bulk goods such as coal and steel, insufficient digitalisation, and the disruptive impact of infrastructure upgrades—particularly in Germany—as key factors eroding rail’s competitiveness.
The study highlights how freight divisions of former state railways are caught between chronically underfunded infrastructure and the high regulatory demands of EU competition policy. Construction-related detours and network disruptions, especially in Germany, are making operations less predictable and less attractive compared to road freight.
Most rail freight divisions operating at a loss
Profitability remains elusive across most of the sector. In 2024, DB Cargo posted a loss of 0.52 euros per tonne-kilometre, SBB Cargo stood at -0.44 euros/tkm, and PKP Cargo reported the weakest performance at -2.92 euros/tkm. Rail Cargo Group broke close to even at -0.04 euros/tkm. Only Rail Logistics Europe turned a positive result, with 0.60 euros/tkm.
These figures reflect persistent cost pressures and a mismatch between policy ambitions and the economic realities of running rail freight services in liberalised but unevenly supported markets.
Intermodal rebounds, but below pre-crisis levels
Intermodal transport offers a rare source of stability. Following a 7.3% decline in 2023, intermodal volumes are projected to increase by 4.7% in 2024. Key drivers include container traffic from Eastern Europe and a rising number of military shipments. However, growth remains below the 2% annual increases seen before the downturn.
The operator landscape is also shifting. Shipping companies and major retail groups are increasingly organising their own rail services to build more resilient supply chains, bypassing traditional rail freight operators in some cases.
Digital solutions offer short-term gains
In terms of innovation, long-term projects such as the Digital Automatic Coupling (DAC) and the European Train Control System (ETCS) continue to require high investment and yield slow returns. Meanwhile, short-term digital upgrades such as terminal automation and personnel scheduling systems are already delivering efficiency gains. These improvements can help increase network capacity, reduce resource use, and enhance rail’s competitiveness in the near term.
SCI Verkehr’s findings suggest that while some segments show signs of resilience, Europe’s rail freight market remains under severe pressure from structural, financial, and operational challenges. Without targeted support and faster adoption of practical digital tools, the sector risks falling further behind.