LTG Cargo sets foundations for expansion in Estonia and Latvia
Lithuania-based LTG Cargo is taking steps to begin operations in neighbouring states Estonia and Latvia. The company is in the process of obtaining carrier safety certificates in the two countries. The Lithuanian state-owned carrier made its first test runs in Estonia in this context.
LTG Cargo locomotives used the Tartu-Valga route for the tests, which links the Latvian-Estonian border to the Estonian mainland. Regarding the tests and future operations in the rest of the Baltic states, Eglė Šimė, CEO of LTG Cargo, commented that obtaining the new licenses would help more customers shift from road to rail. “New logistics solutions for transporting freight in new markets will contribute to a more sustainable and efficient rail link between the Baltic States and Northern and Western Europe,” she said. Of course, such a development would also help the Lithuanian carrier improve its strained financial situation.
Not the first one
Before LTG Cargo, the cargo subsidiary of Latvian Railways SIA LDZ Cargo had already expanded in Estonia. Both Lithuanian and Latvian cases have something in common: rail freight transport in Estonia has not been in its best shape, especially after state-owned enterprise Operail decided to offer services on demand and stop regular offerings. As the company explained in March 2023, it “will only start contracts for the provision of freight transport services based on price offers with its customers.”
Since Operail could be doing better, new opportunities emerge for other players, specifically companies from neighbouring Baltic states. For instance, Latvian subsidiary SIA LDZ Cargo has been operating in the country since January 2023, serving a major US customer via rail. LDz’s expansion in Estonia was driven by a purely pragmatic approach to help the mother company’s finances and boost the sharply declining volumes and revenues.