The Ukrainian subsidiary of LTG Cargo, Lithuania’s national rail freight operator, is changing its business model. From September onwards, the company will focus on providing rolling stock leasing services, rather than the current emphasis on freight forwarding.
“We established LTG Cargo Ukraine with the aim of strengthening the logistics and supply chains between Lithuania and Ukraine”, explained Eglė Šimė, CEO of LTG Cargo. “There are almost 500 Lithuanian wagons in Ukraine, and by transferring them to LTG Cargo Ukraine, we will ensure their effective utilisation by leasing them to customers. Railways remain an extremely important supply line for a country at war, there is a need for rolling stock, and in the future, we will also contribute to the reconstruction of Ukraine in this way.”
The move into the Ukrainian rolling stock market could be seen as a surprise. Earlier reports from Ukraine suggested that the wagon lease market is oversaturated, with rental prices for a wagon between two and four euros per day.
Yet, LTG Cargo is positive. “Looking ahead, we view the Ukrainian market with a long-term perspective. The rolling stock in the country is worn out and has suffered significant damage due to the war. Ukraine’s reconstruction will undoubtedly require robust rail logistics and rolling stock”, a company representative explains.
Wagons and shunting locomotives
The head of LTG Cargo Ukraine, Saulius Stasiūnas, went on to explain that rolling stock in the country is needed. “At the beginning of the war in Ukraine, freight traffic fell by half – from 314 million tonnes in 2021 to 151 million tonnes in 2022 – but in recent years it has been gradually increasing.”
“The industry in the country has adapted and is operating, so rolling stock is needed for freight transport and work at terminals. Most of the wagons we plan to lease are covered wagons, which can be used to transport various cargoes, from construction materials to food products, and platforms for transporting containers.”
The majority of LTG Cargo Ukraine’s wagons are already leased, and discussions are currently underway regarding the leasing of shunting locomotives of type ChME3. Those have been modernised in Vilnius last autumn.
Future expansion
LTG Cargo Ukraine plans to expand its rolling stock fleet to better serve Ukrainian businesses, says LTG Cargo. Over the next two years, the company will acquire an additional 120 wagons and it expects to add 2M62K mainline locomotives to its fleet. Furthermore, the arrival of new electric locomotives in Lithuania could also lead to the addition of Siemens diesel locomotives to LTG Cargo Ukraine’s fleet.
The portfolio of LTG Cargo Ukraine’s customers for freight forwarding services is now managed by LTG Cargo Polska, LTG Cargo’s Polish subsidiary.