LG Cargo train, source: Lithuanian Railways

Lithuanian Railways transforms freight division into LG Cargo

Lithuanian Railways (Lietuvos geležinkeliai) has established a separate company for its freight business. The new entity is called LG Cargo and is the largest rail freight operator in the Baltics. Lithuanian Railways will remain in control over all the shares of the new company.

The transformation of Lithuanian Railways’ freight business will take place in two stages. The first includes the transfer of rolling stock from the company’s Freight Transportation Directorate to the newborn LG Cargo. During the second phase, all the stuff and other assets will be transmitted to the new company. LG Cargo assured that the transformation will not cause any problems and customers will not be impacted by the changes.

Changes in management

The reorganisation of the Lithuanian railway undertaking is in accordance with the Fourth Railway Package. A new operating model was approved by the Lithuanian Parliament last year. According to the government body, Lithuanian Railways should be divided into three separate companies covering its three activity areas: rail infrastructure, passenger and freight transportation. The company’s division and transformation into a state-owned holding will provide more transparency and efficiency.

Lithuania is the last state in the Baltics to establish a separate rail freight company. Two other countries, Latvia and Estonia, carried out this move much earlier. Latvia incorporated LDz Cargo as a freight subsidiary of Latvian Railway (Latvijas dzelzceļš) in 2007. Estonia established EVR Cargo within national railway group Eesti Raudtee in 2009. Three years later, it was separated from the parent company to become an independent player. In 2018 EVR Cargo was renamed into Operail.

Author: Mykola Zasiadko

Mykola Zasiadko is editor of online trade magazines RailTech.com and RailFreight.com.

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