Europe has ambitious plans to shift freight from road to rail, but the results so far have been disappointing. According to the recent 2026 CER Economic Study on the European Rail Freight Sector, rail’s share of EU inland freight transport fell from 18.8% in 2014 to 16.6% in 2024. This decline reflects a combination of factors, including the limited prioritisation of rail freight, extensive infrastructure maintenance and renewal works in Germany, broader economic pressures and the greater flexibility of road transport operators to adapt to changing market conditions.
Reversing this trend will require further investment in railway infrastructure, particularly in missing cross-border connections. But infrastructure is only part of the answer. Rail must also offer the reliability, cost and flexibility that businesses expect from their transport providers.
For the Baltic states, the challenge is particularly significant. The CER study estimates that the region lost approximately 27 billion tonne-kilometres of Russia-linked transit between 2014 and 2024. These volumes are unlikely to return. Russia had already been redirecting freight through its own ports, including Ust-Luga, long before the latest geopolitical developments.
The Baltic freight market therefore cannot simply return to its previous model. The question is how to develop new freight flows and connect the region more closely to European supply chains. Rail Baltica offers an opportunity to do exactly that. Establishing a continuous European-standard-gauge connection can help overcome one of the region’s longstanding infrastructure limitations. But the economic benefits will depend on how effectively this new connection is used.
The opportunity is in new freight flows
The future of Baltic rail freight cannot rely on traditional east–west transit. It will increasingly depend on the ability to attract cargo moving between the Baltic states and the wider European market. One important area is intermodal transport, where goods move between rail, road and sea without unnecessary handling. The CER study highlights its growing importance, with one major European rail logistics group expecting around 70% of its anticipated market growth to come from this segment.
For Rail Baltica, this means that connections to ports, logistics terminals and industrial centres will be just as important as the railway itself. Freight customers need efficient transport from the point of origin to the final destination, not simply a railway connection between two cities. There is also a broader opportunity to strengthen north–south trade links and diversify transport routes. For the Baltic states, which have historically relied heavily on east–west freight flows, this would represent a significant change in the structure of the logistics market.
What will make businesses choose rail?
For freight customers, the decision between road and rail is primarily an economic one. Transport prices matter, but so do delivery times, reliability, handling costs and the ability to plan shipments with confidence. The CER study also highlights the potential for more freight to move from road to rail.
One chemical-industry customer interviewed for the study considered shifting 10–15% of its road freight activity, measured in tonne-kilometres, to rail realistic, provided that certain conditions were met, including reliable deliveries, accessible terminals and competitive transit times. With sustained pressure on fuel costs and a shortage of truck drivers across Europe, rail could become an increasingly attractive alternative for shippers, provided it can offer reliable and competitive services.
This is an important indication of where future growth could come from. Businesses are willing to consider rail when it fits their logistics needs. For the Baltics, Finland and Poland, the opportunity lies in providing a new north–south connection that can support efficient freight movements between the European markets. Making the most of this opportunity will require close cooperation between infrastructure managers, freight operators, ports and logistics terminals. The objective is to ensure that the new railway is supported by services that businesses can integrate into their supply chains.
Beyond the Baltic states
Rail Baltica’s importance extends beyond the freight market of Estonia, Latvia and Lithuania. Better north–south connections can strengthen European supply chains and provide alternative transport routes at a time when economic resilience has become increasingly important. There is also potential to support future trade and reconstruction-related transport involving Ukraine, provided that the necessary connections and infrastructure are developed.
The same infrastructure can contribute to military mobility, where reliable cross-border transport and alternative routes are essential. These wider benefits strengthen the case for continued European investment in strategic railway corridors. However, the commercial success of rail freight will still depend on whether the services offered meet market needs.
Europe needs to continue closing gaps in its railway network, particularly where missing connections limit cross-border transport. At the same time, greater attention must be paid to what happens once the infrastructure is available: how services are organised, how reliably they operate and whether they offer businesses a competitive alternative.