“...the importance of railway transport from China will remain”

HHLA has been the sole owner of the METRANS Group for five years now. What has changed in the past five years, and how has METRANS developed during this time?

Peter Kiss: The foundation for the METRANS transport system was established many years ago, so we can state that the changes in the ownership structure have had no impact on our business and, most importantly, on our customers. We strictly adhere to our policy of being a neutral intermodal operator offering high quality services. Internally, of course, our full integration into the HHLA Group means that we have a strong partner at our side, a strong brand and the strong financial background of a well-known company, which opens up new synergy effects and new possibilities for further expansion.

If we look back and compare the figures from five years ago, the volume carried rose from 1.0 million TEU to 1.4 million TEU and the revenue increased from 350 million euro to 560 million euro. However, these are only gross figures and do not give the real picture of what happened during this period. The critical point for intermodal transport is our container terminals. A significant portion of our success comes from this area, and we’ve expanded our terminal network by another five terminals. This network now consists of seven hub terminals and 13 end terminals in a total of eight countries. And new terminals are in the pipeline.

During this period, we have successfully integrated Polzug, the Polish brand, as well as the Europort terminal in Malaszewicze. And we’ve taken a few other important steps to make METRANS a strong, reliable partner. For our employees and for our business partners.

”HHLA Pure“ must also be mentioned here, a major achievement in terms of carbon-neutral transport. METRANS and HHLA were true pioneers in launching this project for CO₂-free transport back in 2020. Since then, we have systematically expanded the number of transport routes running under this program. Since September 2023, further transport corridors – Wilhelmshaven, Gdansk, Rotterdam, Trieste and Rijeka – have been integrated into the system for sustainable rail transport.

As the world’s leading export nation, China has invested massively in the “New Silk Road”, and the trans-Asian railway connection has shaped up well in recent years. How did you perceive this development that proved to be remarkably successful, even during the COVID-19 pandemic?

From our perspective, the project of the New Silk Road itself has a lot of potential. That is why METRANS invested in the CL EUROPORT border terminal in Malaszewicze to improve all processes at the most important reloading station from 1520 mm to 1435 mm in Europe. The fast transit time – around 14 days – is one of the aspects clients take into consideration when deciding how to transport goods from China to Europe and back. Moreover, the solution is environmentally friendly, which is also important to customers.

In the wake of the Russian attack on Ukraine, the utilization of the main corridor via Russia has decreased significantly, as some companies have chosen to refrain from using this service. Have you noticed a change in freight flows to the Middle Corridor as a result?

Last year, immediately after the attack started, we did see lot of trains using the so-called Middle Corridor. Especially in the summer, trains from China were crossing through the Caspian Sea and the Black Sea, as well as through Türkiye. At the same time, we saw that the port of Constanta was used for cargo from Ukraine, which caused congestion there. Later, these trains almost stopped, as the infrastructure was not ready to accept the volumes, and also because of the expected transit times.

On the other hand, we have seen some improvements there this year, and we hope that there will soon be better transit solutions from the China-Kazakhstan border to the Black Sea or Türkiye. It will take some time to build sufficient infrastructure, but after that, the Middle Corridor could be an option.

In comparison to sea transport, railway transport accounts for only a single-digit percentage of total freight volumes between China and Europe. What potential do you see for its development in the next few years?

Railway transport cannot absorb the volume which is transported on the vessels, that’s clear. In numbers, one 24,000 TEU vessel is equivalent to 218 trains. By rail, we have some 15,000 trains annually between China and Europe (including Russia), so if we consider the faster transit time, a maximum of two such big vessels could be substituted.

It is simply not enough, but there is a lot of potential, and if the European economy grows, the importance of railway transport from China will remain.

METRANS also operates hubs in Slovakia, a country that is connected to the Russian broad-gauge rail system. A few years ago, there were considerations to extend these tracks further into the CEE region, to Bratislava or even the east of Austria. Do you think that this idea has ultimately been abandoned?

We hope so, because we believe that this idea has died. Honestly, this project was a dream for investors and construction companies. But we live in a real world that shows us a very different picture: What is the quality of the existing railway infrastructure, can we categorize it as good or bad? We’re not here to judge, we simply use the existing infrastructure and face many problems, many closures and restrictions. A good property manager should take care of the existing resources and try to expand them. Providing additional tracks for a particular project is beyond the current economic capability. Nowadays, the fast-changing situations strengthen our standpoint that nobody needs those tracks.

Digitalization has led to many improvements in transport and logistics: more efficient consolidation of cargo, shorter processing times, better container storage, tracking etc. What does METRANS see as further opportunities on the horizon?

Digitalization has become indispensable for the entire transport industry. In recent years, for example, we have developed and successfully introduced our own app, “MTruck”, for truck clearance at our terminals. Long waiting times in front of the terminal gate don’t help anyone. That is why our new app constantly balances capacity between the terminal and the truck drivers in the background. The result is a win-win situation: Drivers can use their smartphones to plan unloading slots in advance, eliminating long waiting times at the terminal. On the other hand, we can control the inflow so that there are no capacity bottlenecks.

However, the biggest challenge for us is the development of a new operating system. Every year, the volumes increase and new requirements appear, whether from customers or from public authorities. We have to design a new system that is much more flexible and easy to use system, but on the other hand, we will also offer many interfaces for different situations that we have not yet encountered.

cargo-partner is constantly expanding the capacity of its warehouse in Dunajská Streda, right next to your terminal, with further expansion 2024. This underlines the importance of Slovakia for the company’s worldwide network. The cargo-partner warehouse even has its own access to your hub – what has been your experience with this cooperation?

The direct connection of our METRANS rail container terminal in Dunajská Streda with the cargo-partner warehouse brings several advantages to our mutual cooperation. Perhaps the biggest advantage is that the containers do not need to be delivered to cargo-partner’s warehouse by trucks, but by special forklift trucks – “reach stackers” – directly after unloading from the train.

The optimized process enables us to achieve time and cost savings, a significant reduction in carbon emissions, road tax fees, not to mention the fact that this method of transportation is much safer. Last but not least, the convenient location of the warehouse gives cargo-partner direct railway access to most of the major European seaports we serve.

METRANS has taken great steps to be more environmentally friendly with using lighter freight cars, environmentally friendly locomotives and the use of “green energy” and additionally offers an eco-friendly product, “HHLA PURE”. What can customers expect?

“HHLA Pure” is a great achievement for carbon-neutral transport. METRANS, together with HHLA, launched this project for CO₂-free transport back in 2020. Since then, we have systematically expanded the number of transport routes running under this program. Since September 2023, further transport corridors – Wilhelmshaven, Gdansk, Rotterdam, Trieste and Rijeka – have been integrated into the system for sustainable rail transport.

Some remote regions of the world are already using autonomous freight trains. How long do you think it will take for this to work in regions with a dense rail network?

This sounds good and we are well aware of these future-oriented trials – but we should remain realistic. We have already pointed out the poor state of the infrastructure. ETCS (“European Train Control System”), which has been discussed for a long time, is still not fully implemented. Without significant improvements in the quality of the infrastructure and widespread implementation of automated control processes, a similar development in our region is not feasible. We also should not overlook the costs. ETCS or DAC (Digital Automatic Coupling) costs a lot of money and these costs have to be borne to a large extent by the railway undertakings (RUs). This is where politics comes in, because the entire EU wants to see a change in transport. But it is not possible to put more freight on the railways, and if the railway undertakings have to bear more and more costs, rail transport will lose its competitiveness.

Thank you for the interview!