Dwindling goods transport volumes and competition from trucks mean there are not enough customers for the Amber Train that has not started making regular trips yet. Operail hopes to launch the cargo line in January.
Instead of using trucks to move goods west, the three Baltic countries' joint Amber cargo train left the Port of Muuga for Kaunas, Lithuania on September 13. Raul Toomsalu, CEO of operator Operail, said that this would achieve the same goal using four times less fuel, emitting six times less CO2 and with a 28 times smaller chance of accidents. It would remove over 7,500 trucks a year from Estonian roads.
The Amber Train was meant to start regular service as soon as possible following the September test run, going between Kaunas and Muuga twice a week. This has not proved possible until now, said Marko Paatsi, head of sales for state-owned cargo trains operator Operail.
"The economy cooled in the second half-year, which has noticeably lowered Estonia's export volumes. This causes fierce competition for remaining haulage with road carriers. Road transport companies are offering considerable discounts to secure orders. This has caused the prices offered by the Amber Train to be less attractive," Paatsi explained.
Logistics group CF&S, moving goods from Estonia and the Nordics to Western Europe, is one of the Amber Train's customers. Because the Baltics have a different track gauge, the goods need to be reloaded before reaching Western Europe, which makes the Amber Train expensive.
"In the future, the plan is to load the Rail Baltica here and unload it in Europe –that is how it should be. CF&S moves a lot of trailers on the European railroad, we believe it is the future. We were prepared to make the switch now, but the market did not go along with it," said the logistics company's CEO Tiit Arus.
The end of the year is slow in the logistics sector, Paatsi said. That is why Operail hopes to launch the Amber Train in the second half of January.
"We are trying to negotiate new prices with colleagues in Latvia and Lithuania for next year. We haul goods in Estonia, while they handle volumes in Latvia and Lithuania. We are aiming for competitive prices."
Paatsi added that some market participants are planning to move goods on the Amber Train next year, which is why Operail remains hopeful.
Estonia behind schedule moving goods carriage to the railroad
Launching new transport links is always complicated, Tiit Arus admitted.
"Goods need to be moved on from receiving train station A, B or C – the entire logistics of it needs to be reworked. Things are less complicated in export. You load your trailer and head to Europe. You need to come back with a consolidated cargo of goods that need to be collected and picked up at the terminal. Putting it together takes time, but once you're up and running, it can work well and for a long time."
That is the reason why we should not bet solely on Rail Baltica if Estonia wants to hit the target of moving 40 percent of goods by train instead of trucks by 2035. This share came to just 26 percent in 2020 and is rather set to fall once eastern carriage ends.
The Amber Train is just one example of a wider problem. Indrek Gailan, head of the transport development and investments department of the Ministry of Economic Affairs and Communications, admits as much.
"We need to review the competitiveness of rail transport in the new situation."
It could see railroad usage fees lowered. But such a decision cannot be made overnight," Gailan explained.
"Because we have to negotiate exceptions with the European Commission, unfortunately, we cannot radically slash fees in a matter of weeks or even months."
The fate of state-owned Operail hangs in the balance now that Russian sanctions have cost the Estonian operator much of its business. The ministry is set to present the government with an analysis of Operail's remaining business opportunities in the second half of January.
"That is when we can make the next decisions in terms of where, what and how to put on the railroad. Whether Operail will pursue other activities, or whether it will limit itself to north-south goods carriage," Gailan remarked.
Editor: Mirjam Mäekivi, Marcus Turovski