Analytics, EU – Baltic States, Latvia, Transport

Main current issues in Latvia Issue

1 – Quality of road infrastructure In Latvia, the poor (and deteriorating) quality of road infrastructure is an important obstacle to safe and efficient transport. It also leads to congestion in the vicinity of Riga.

Issue 2 – Rail connections with the rest of the EU countries The development of railway traffic between the Baltic States and the rest of the EU countries, as well as the efficient functioning of the railway market in Latvia, is affected by a missing high quality North-South rail link, the difference in the track gauges (respectively 1520 and 1435 mm) and different signalling systems. The Rail Baltica project could help remedy these issues. There is potential for improvement or creation of intermodal terminals and suitably located, efficient transhipment terminals between the broad-gauge network and standard-gauge Rail Baltica line.

Issue 3 – Competition in the maritime transport Transparency and governance of port authorities is problematic and has created obstacles to competition in the maritime transport market. Port authorities (owned by the municipalities and governed jointly by municipalities and the central government) have to perform commercial activities in compliance with the existing regulatory framework. 

Issue 4 - Emissions from road transport Reducing emissions and final energy consumption in the road sector is a key challenge in Latvia. Despite having one of the lowest GDP per capital in the EU, Latvia is one of the countries with the highest emissions from new passenger cars. The shares of renewable energy in the transport sector and of alternative fuels in the passenger car fleet are very low.

Key facts and figures on transport in Latvia

Modal split Latvia has a relatively high share of public transport in its modal split for passenger transport. The largest part of freight transport in Latvia is done via railways (almost 75%). Inland waterways do not play any role for freight transport.

Modal split for passenger and freight transport in 2015 :

Performance of the logistics sector

According to the analysis of the World Bank, the performance of the logistics sector in Latvia has remained stable overall in its absolute score between 2014 and 2016, but its global ranking has deteriorated. In particular, for the areas of customs and international shipments the results are weak. Developments seem more positive when it comes to infrastructure.

Road safety

Road fatalities in Latvia are among the highest in the EU, 80 dead per million inhabitants versus 50 in the EU on average. However Latvia reduced road deaths by 28% between 2010 and 2016 (EU average 19%) and provisional 2017 data show an impressive decrease of 14% (2% at EU level). The share of pedestrian fatalities is significantly higher (38 %) than the EU average (21%), whereas the share of motorcyclist fatalities (6%) is lower than the EU average (14%). The worst trend is among pedestrians, where the fatality numbers are increasing. Pedestrians are overrepresented in fatalities compared to their share in other EU countries (35% versus 21%).

Alternative fuels in road transport

The share of alternative fuelled cars in total sales of new cars on the Latvian market is very small and numbers seem to be decreasing. This is particularly noteworthy, as Latvia has particularly high CO2 emissions from its passenger car fleet.

Market opening in the railway sector In Latvia, the infrastructure manager is separate from the rail service operators. The domestic markets for freight and passenger rail transport are open for competition, but only a few operators are active on the Latvian market. For many companies, the difference in track gauges represents an obstacle to market access. Freight traffic is dominated by transit cargo from Russia and Belarus (as well as from countries further afield) to the three main ports of the country. Latvia’s high railway-share of tonne-km in freight transport is mainly due to high transit volumes.

Share of renewable energy in transport

The share of renewables in the Latvian transport sector is stagnating significantly below the EU average. The main support scheme for the increased use of renewable energy in transport sector is a blending obligation of biofuels into liquid transport fuels.

Quality of the transport infrastructure in Latvia

In terms of infrastructure quality, Latvia receives relatively good ratings from the World Economic Forum for its railway and maritime infrastructure. However, the road infrastructure is in very poor condition and the situation has not improved in the last 10 years. Graph Source: World Economic Forum, The Global Competitiveness Report. The bars represent the rank of the country compared to the rest of the world, while the lines represent the quality scores in a scale from 1 to 7.