A Collection and Distribution Hub in European Logistics

Hungary has become a collection and distribution center in the European logistics network, while rail freight transport has been struggling with significant cost increases and profitability problems, intermodal transport has achieved an outstanding 122% growth in 2024, the Association of Hungarian Logistic Service Centers (MLSZKSZ) told MTI on Monday.

They explained that according to data from the Hungrail Hungarian Railway Association, in the last quarter of 2024, the unit costs of rail freight carriers increased by 10.3% compared to the same period of the previous year, while unit revenues increased by only 2.2%. This difference has resulted in a significant deterioration in profitability, which the sector has not been able to compensate by raising tariffs. The main reasons for the increase in costs were the increase in operating costs, wagon inspection costs and network access charges, as well as exchange rate fluctuations for international transport.

In contrast, intermodal transport made impressive progress in 2024, with traffic arriving and departing at Hungarian intermodal terminals up 122% compared to 2023, according to MLSZKSZ data, an outstanding performance amid stagnation in Europe. This growth has enabled Hungary to become the first groupage hub in the European intermodal transport network.

The number of loaded containers increased by 33.8% and semi-trailer rail traffic by 21.3%, partly due to campaign deliveries related to factory construction and partly to new traffic connections to northern Serbia and western Romania. The number of empty containers fell by 3.4%, reflecting a strengthening of domestic exports and a recovery in international traffic to neighboring countries. The increase was supported by the positive impact of the shift of semi-trailer road traffic to rail under the Energy Efficiency Commitment Scheme (EER) and the emergence of new rural terminals, which open up promising opportunities for the future, the statement said.

They pointed out that both rail and intermodal transport have been hampered by the 2024 railway construction works, such as the Budapest-Belgrade line, the poor condition of the Gubacsi bridge and the construction of the third track between Kelenföld and Ferencváros in Budapest. Inadequately coordinated track closures have caused significant disruption to traffic, resulting in congestion and isolation of terminals and hectic peak periods at terminals. According to the MLSZKSZ, railway construction projects do not pay enough attention to the use of temporary structures, such as bypasses, temporary road crossings, platforms or overpasses, signaling and safety equipment, and track markers, which could reduce traffic disruption.

The association said in its statement that maritime container traffic fell by 13% in the first quarter of 2024 compared to the same period in 2023, due to the economic recession in Europe, a drop in domestic consumption and the Gulf of Aden conflict. In the second quarter, maritime traffic made up for lost ground, with more regular traffic and greater maritime capacity available, so that the second quarter saw a decline in traffic from the first quarter, followed by a decline in traffic in the second quarter.

Zsolt Károly Fülöp, President of MLSZKSZ, said in the statement that the biggest challenge facing Hungarian rail and intermodal transport is to restore competitiveness and address infrastructure challenges. The MLSZKSZ proposes to improve the coordination of railway track construction works, to minimize track charges and to use temporary structures during renovation works, he added.