photo: Hungrail/Hungrail Association has prepared a forty-point VAGTA plan for the government
Hungary’s rail freight sector is facing a critical downturn, with volumes dropping and infrastructure lagging behind European peers. As inflation and outdated policies weigh heavily on operators, a new recovery plan may offer a way out.
Between 2020 and 2024, Hungary’s rail freight transport saw a consistent drop across all sectors—imports, exports, and domestic shipments. In 2023, spiralling inflation and the energy crisis pushed average operational costs up by 18%, leaving freight operators unable to fully pass on expenses to customers. Many companies now face serious financial distress.
Hungrail, the Hungarian rail association representing both national and international operators, has proposed a rescue package to the government. The organisation warns that current subsidies are inadequate to halt the decline. Without immediate state support, there is a risk that international freight routes could bypass Hungary altogether.
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What Solutions Are on the Table?
The association’s proposed 40-point VÁGTA plan—still under wraps due to ongoing negotiations—focuses on cutting costs and increasing efficiency. While full details remain confidential, Hungrail confirmed the points fall into eight strategic categories aimed at improving economic viability. These include: lowering infrastructure fees (which rose by 14% last September), increasing support for single wagonload services, VAT reductions for freight forwarding, and excise duty refunds on traction electricity.
Further proposals call for reforms in hazardous goods transport inspections, rerouting specific freight segments to rail, and improved coordination between infrastructure managers and operators during disruptions. The association also stresses the importance of railway education and digitalisation, aiming for a more future-proof system.
Room for Recovery?
Despite the grim outlook, there are signs of possible revival. New industrial zones with rail access and the long-awaited Belgrade-Budapest line (expected to launch this year) could spark growth, as noted by Reuters. Peace in Ukraine could also stabilise transit routes. However, according to Portfolio.hu, Hungary’s aging railway infrastructure—marked by speed restrictions, axle weight limits, and capacity shortages—remains a major bottleneck. These issues make rail transport costly and unreliable, pushing businesses toward road alternatives.
Hungrail’s demands also echo EU Regulation No. 1280/2023, which sets standards for railway capacity use (EUR-Lex). Under current Hungarian law, the Ministry of Construction and Transport must deliver a national competitiveness plan by March 31, 2025. Without swift action, Hungary risks falling further behind in the European rail landscape.
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Sources: Hungrail; Reuters; EUR-Lex; Portfolio.hu