The economy weighs heavily on Hungarian rail freight: ‘Demand decrease
Signal
HUNGRAIL reported an 11% decline in rail freight performance in 2025, dropping below 10 billion tonne-kilometres for the first time in a decade.
Impact
negativeRail freight operators and logistics companies face severe profitability challenges, while the Hungarian economy may experience disruptions in supply chains due to decreased transport volumes.
The Hungarian rail freight sector is experiencing a significant downturn, as highlighted in the latest report from the Hungarian rail association, HUNGRAIL. The report indicates an 11% decline in rail freight performance measured in tonne-kilometres for 2025, with the total metric falling below 10 billion tonne-kilometres for the first time in over a decade. This decline is attributed to a dramatic decrease in foreign trade and contractions in construction and heavy industry, which have severely impacted transport demand.
In 2025, the competition from the road transport sector further complicated the situation for rail freight operators. Although freight rates increased by 2%, this was insufficient to counteract the 6.7% inflation rate, resulting in a real-term decline in revenue. Additionally, unit costs for rail freight operators surged by 11.8%, despite efforts to implement cost-cutting measures, including layoffs and organizational restructuring. HUNGRAIL noted that to maintain profitability, a price increase of 9.8% would have been necessary, but the sector was unable to achieve this, leading to a deterioration in financial stability.
The report emphasizes that the challenges facing the rail freight sector are not merely cyclical but indicative of deeper structural issues. Lajos Hódosi, Managing Director of HUNGRAIL, stated that the current environment is jeopardizing the stability of the entire domestic logistics chain. The order book for rail carriers has also seen a dramatic decrease, exacerbating the difficulties faced by these companies.
In response to these challenges, HUNGRAIL has proposed short-term measures aimed at stabilizing the sector. The association calls for a predictable transport policy and a supportive financing environment to help rail freight companies navigate the current crisis. Without these interventions, the future of rail freight in Hungary remains uncertain, with potential repercussions for the broader economy.
As the Hungarian rail freight sector grapples with these issues, stakeholders such as logistics companies and manufacturers must adapt to the changing landscape. The decline in transport volumes could lead to increased reliance on road transport, further straining the rail sector's competitiveness.
