Rail freight transport in Hungary saw another sharp decline in 2025, with performance measured in ton-kilometers down 11% from the previous year, according to data published by HUNGRAIL, the Hungarian railway association. The organization warns that the sector is facing not only a cyclical decline in demand but also structural competitiveness issues relative to road transport.
HUNGRAIL notes that rail freight transport remains one of the key sectors of the Hungarian economy, especially in an open, export-oriented country. Railways play a significant role in supplying heavy industry and the energy sector, as well as in achieving sustainable transport goals.
However, the competitiveness of rail freight transport relative to road transport remains under pressure. According to HUNGRAIL’s analysis, rising costs, the state of the infrastructure, traffic restrictions, and declining industrial demand have severely impacted the market in 2025.
Higher Costs, Lower Demand
One of the main issues highlighted is the continuous rise in costs. Fluctuations in energy prices, increases in infrastructure usage fees, and rising labor costs have reduced the profitability of rail freight operators.
At the same time, the condition of the infrastructure and the frequency of construction work or traffic restrictions have affected service reliability. For customers, these issues reduce the appeal of rail transport compared to road transport, which is more flexible and easier to adapt to changes in demand.
Demand trends have not been favorable either. HUNGRAIL reports that Hungary’s foreign trade volume declined significantly last year, while sectors with high transport demand—particularly construction and heavy industry—also saw a decline in activity.
This combination directly reduced demand for transport services, severely affecting the rail freight market.
Unit costs rose by 11.8%
In 2025, the unit costs of rail freight operators in Hungary increased by 11.8% compared to 2024, based on the transport of one ton of freight per kilometer. In the fourth quarter, costs per gross ton-kilometer were 5% higher than in the same period of the previous year.
The increase was largely driven by higher operating and handling costs. HUNGRAIL emphasizes that this trend could not be offset even by the tough measures taken by companies, including administrative cost cuts, restructuring, and layoffs.
At the same time, freight rates did not rise enough to cover these costs. In 2025, unit freight rates for rail freight transport rose nominally by only 2% compared to the previous year. Relative to the average inflation rate of 6.7% for services, this represents a real decline of 4.7%.
In the last quarter of the year, rail freight operators’ rates even fell in nominal terms, by 1.4%.
HUNGRAIL: profitability has deteriorated dramatically
According to HUNGRAIL, the gap between rising costs and fare trends has put operators in an increasingly unsustainable position. To offset the cost increases starting in 2025, an additional fare hike of 9.8% would have been necessary, but operators were unable to pass this pressure on to customers.
The main reason is competition from road transport, which limits rail operators’ ability to raise prices, especially in a context of declining demand.
Lajos Hódosi, CEO of HUNGRAIL, stated that the data from the rail freight cost index point to a deeper problem than a mere temporary economic downturn.
“The figures from the rail freight cost index for 2025 clearly show that the Hungarian rail freight market is no longer facing merely a cyclical economic downturn, but deeper structural competitiveness issues,” said Lajos Hódosi.
He noted that operators have implemented significant internal measures to maintain operations, including cost cuts, reorganizations, and layoffs. However, rising energy, infrastructure usage, and operating costs, combined with declining volumes, are severely limiting companies’ room to maneuver.
“This situation could end up jeopardizing the stability of the entire domestic logistics chain,” warned the director of HUNGRAIL.
Measures Needed to Stabilize the Sector
HUNGRAIL argues that halting the decline of rail freight transport requires government measures and financial support. The organization states that Hungary needs a new transport policy and financing framework that simultaneously addresses the state of the infrastructure, competitive disadvantages, and the strategic role of rail freight transport.
According to Lajos Hódosi, every shipment lost by rail means additional pressure on roads, greater exposure to imports, and a weakening of Hungary’s industrial competitiveness.
“Hungary’s export-oriented economy cannot be competitive in the long term without a stable, predictable, and sustainable rail logistics system,” he said.
HUNGRAIL proposes several short-term measures through the VÁGTA program, designed to stabilize the sector. These include relaunching the support system for single-car rail transport, reviewing infrastructure usage fees and adjusting them for competitiveness, as well as introducing a support system for combined transport in Hungary.
Less than half of industrial sidings are actively used
Another key point concerns industrial connections and “last-mile” links. HUNGRAIL argues that it is necessary to stimulate the reactivation of industrial sidings and last-mile connections, as less than half of the approximately 944 industrial sidings in Hungary are actively involved in rail logistics.
The organization also calls for the extension of the protected fuel price to the rail sector. According to HUNGRAIL, a regulatory anomaly currently prevents passenger and freight rail companies from purchasing fuel at the protected price.
In the area of traction electricity, HUNGRAIL is calling for a reduction in system usage fees and the possibility of recovering the amounts related to the so-called KÁT, the mandatory feed-in tariff for renewable energy. According to the organization, these costs represent an additional annual burden of 3–5 billion forints for the rail freight sector alone.
HUNGRAIL also notes that the current price of traction electricity is still three times higher than the level recorded before the price surge of 2022.
Poor Short-Term Outlook
The short-term outlook remains unfavorable for rail freight operators. HUNGRAIL warns that global tensions and rising energy prices could further increase the sector’s costs, while inflationary pressures and logistical uncertainties could further reduce transport demand.
The rail freight cost index, published quarterly by HUNGRAIL, was created to make the effects of costs on the sector more transparent and to support public policy decisions. The indicator is based on a representative survey of rail freight operators and shows both the evolution of costs and the difference between these costs and revenue generated from tariffs.
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