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CEO of LTG Cargo Ukraine – about the opportunities and prospects of operating in Ukraine by opening the North Gate

The work done in Ukraine this year laid a solid foundation for projects and partnerships in 2022, says Mr. Saulius Stasiūnas, CEO of LTG Cargo Ukraine. According to him, the Ukrainian market is extremely large and complex, but at the same time – has a lot of potential for new business opportunities and meeting the changing needs of market players.

LTG Cargo established a subsidiary in Ukraine in 2020. What are the most important jobs you would single out during this time?

Much of the work that has been accomplished this year may seem invisible, but it was necessary to hear market expectations and lay the groundwork for a successful and efficient business next year. Together this year, we started to actively introduce ourselves to the market and provide forwarding services in Ukraine, concluded more than ten preliminary agreements for the lease of ČME3 locomotives, signed more than twelve agreements with logistics partners, organized and concluded agreements for the maintenance and repair of locomotives. We want to offer our customers and partners new ways of doing business, contribute to more sustainable intermodal freight transport, and in the long run offer electric traction projects that will only grow in importance in the region.

In September of this year, we officially opened an office in Kiev. Together with the head of the Ukrainian Railways Board A. Kamyshin, we discussed the most important areas of activity in which we can benefit and work together – the transportation of increasingly important semi-trailers on the Klaipeda-Chornomorks route, challenges and possible solutions in locomotive rental, wagon repair and production services. No less important is the question of how to strengthen international cooperation with partners in Ukraine and ensure the smooth flow of cargo between the countries.

As for next year, what are your next plans?

The Ukrainian freight market is extremely large and complex, so we aim to fill a certain niche in our market that we do not yet consider to be used and to provide quality traction services. In other words, we first aim to respond quickly and flexibly to customer needs. The potential of the Northern Gate for the owners and forwarders of Ukrainian cargo companies could also be strengthened, therefore we will seek to develop opportunities to transport customers’ cargo through Lithuania and Klaipeda port to other markets. We have already mobilized a group of forwarding services and can offer logistics services.

Of course, there is no shortage of challenges, but we are positive. We feel the attention and support of our sole shareholder LTG Cargo for development, therefore next year we are planning both new investments to ensure the implementation of our strategic goals and the growth of the team.

As for Lithuania, what opportunities could open up for Ukrainian customers in this country?

We are currently actively talking and listening to the needs of existing and potential customers. We see that customers are interested in two main options in Lithuania – to transport cargo to Scandinavia and other European countries through the port of Klaipeda and the services of the intermodal terminals in Vilnius and Kaunas owned by our parent company LTG Cargo. I am convinced that the importance of Kaunas intermodal terminal will only grow – it is the farthest eastern European, i. e. narrow gauge, point. In addition, it intersects the roads of three important regions: to and from Western Europe, Scandinavia and Eastern countries, as well as railways of different standards.

Did you mention the transport of semi-trailers, what are the main prospects for multimodal transport?

This is a new service and everything new has to make its way into the market. Colleagues in Lithuania are already seeing a rapidly growing need to transport semi-trailers to Western Europe. Operating in Ukraine, we are also optimistic. In the first quarter of next year, we plan to start pilot carriages with Chernomorsk-Draugystė with partners. We are actively working with the Ukrainian Railways on this issue. These attempts should later turn into regular intermodal trains running twice a week. We see great potential in the market – about 50 thousand semi-trailers per year. Ukraine stands out for its enormous potential – it currently transports more than 300 million tons of cargo, the volume of which could grow to 450 million tons – and this is just a market for rail freight. At that time, only 160 thousand TEUs were transported in containers, although their growth potential is up to 1 million TEU per year.

In the end, waiting for the big holiday of the year, what would you like to wish the market in Ukraine?

I will probably not be surprised to say that first of all I would like to wish everyone a warm holiday and a calmer year. Despite the pandemic, I believe that we will not be short of opportunities this year and next. I would therefore like to see strong partnerships, important discoveries and implementation of new goals.

LTG Cargo Ukraine develops rail freight operations in Ukraine, provides competitive rolling stock rental and freight services and seeks to strengthen logistics supply chains between Lithuania and Ukraine. 100% of the company’s shares belong to the Lithuanian rail freight company AB LTG Cargo, It is a part of the Lithuanian state-owned company AB Lietuvos Geležinkeliai and ranks the 10^th in the European Union in terms of freight traffic.