LTG Cargo ‘dances’ its way to expansion
A rail freight company dancing? This might sound unique, but LTG Cargo, the freight branch of Lithuanian Railways, managed it. On top of that, it managed to fulfil some of its initial goals for 2021: officially establishing a joint venture with PKP Cargo in Poland and stabilising and expanding its operations in Ukraine.
To begin with, LTG Cargo launched the #LithuniaGoesYellow campaign to celebrate the country’s participation in the Eurovision Song Contest, taking place in Rotterdam between 18-22 May. In a cheerful video, the company’s employees wearing yellow (the company’s corporate colour) promote Lithuania’s song and their mission for rail.
Seeing a rail freight company launching such initiatives is more than pleasing because it shows that the industry can have a diverse role in society. Delivering its forecasts and reaching its environmental objectives is one way to go. Nevertheless, not everything is about business. That is why LTG Cargo decided to dance its way to Eurovision and engage the audience in getting to know the company and rail transport better.
You can watch the video here:
A difficult start
However, LTG Cargo does not reduce itself in colouring Lithuania yellow but aims to do the same in European rail freight. The company found itself in a pretty challenging situation at the beginning of 2021. It was when the Belarussian oil exporter Belorusskaya Neftyanaya Kompaniya (BNK) decided to stop its long-term contract with LTG Cargo which transported its oil products to the Lithuanian Port of Klaipeda. Both LTG Cargo and Klaipeda were set to experience substantial losses due to this move.
Cooperation with PKP Cargo
LTG had already planned its next moves. It had ongoing projects in Poland and Ukraine, both promising new possibilities and expansion in competitive markets. As Railfreight.com reported in early March, PKP Cargo and LTG Cargo submitted a request to establish a joint enterprise at the Polish Office for Competition and Consumer Protection.
Martynas Burba, Communications Project Manager at Lithuanian Railways, stated in an exclusive interview, LTG Cargo’s primary goal for 2021 was to expand internationally. “We want to launch a semi-trailer transportation service for our customers both in Lithuania and Europe. Additionally, our company also aims to expand internationally. Last year we established new subsidiaries in Poland and Ukraine, which will also contribute to our diversification goals”, he underlined.
Now the two companies have the green light officially to proceed with their objectives for a joint rail carrier. The new company will have an intermodal profile, able to carry semi-trailers, truck trailers and containers between Lithuania, Poland, Italy and Germany. The two partners have already carried out some test services and what remains now is for the operations to take off.
Ukraine-more complicated but also rewarding
At the end of 2020, LTG opened its Ukrainian branch, LTG Cargo Ukraine. The purpose was to “explore various partnerships, create value and contribute to the promotion of rail as a mode of transport”. The company expected “a gradual development of the operations of LTG Cargo Ukraine: in the first stage of development, LTG Cargo Ukraine would offer rental opportunities for rolling stock, forwarding and other freight transportation services”, had commented Burba. Expansion in Ukraine is more complicated than Poland, said Saulius Stasiunas, CEO of LTG Cargo Ukraine, since it is not an EU country and the company faces slightly more restrictions.
Nevertheless, a few months after its establishment, LTG Cargo Ukraine expanded its leasing business apart from rolling stock to locomotives. Additionally, based on the good relations with the Ukrainian Railways, it aims to start cooperating with big ports of the country like Odesa, Chornomorsk, Pivdenyi and Mykolaiv. Specifically, concerning the port of Chornomorsk, LTG Cargo and Ukrainian Railways have signed an MoU to establish an intermodal corridor stretching from the Black Sea to the port of Klaipeda. Simultaneously, it examines opportunities in intermodal transport of cargo in the corridor between Turkey and Scandinavia, which has good potential.