Latvian Railways (LDz) freight subsidiary LDz Cargo is implementing large-scale layoffs this autumn as regional cargo volumes decline, while Russia’s state railway continues to profit from the transit of Belarusian fertiliser. Last year, Russian Railways earned approximately EUR 287.4 million (USD 324.8 million) from these shipments, a figure that dwarfs the annual operating expenses of LDz Cargo.
Did You Know? Russia’s annual revenue from transporting Belarusian fertiliser—EUR 287.4 million—is 12.5 times higher than the total personnel costs for LDz Cargo, which amounted to EUR 22.95 million.
Financial Disparities in Regional Transit
The economic shift in the Baltic transit corridor follows the implementation of European Union sanctions in early 2022. Prior to these measures, the Port of Klaipėda and Lithuanian Railways generated a combined transit revenue of roughly EUR 14.2 per tonne of Belaruskali fertiliser. In total, the Lithuanian rail and logistics sector previously generated an estimated EUR 156 million annually from these shipments.
Following the halt of exports through Baltic ports, Russia became the only viable route for Belarusian fertiliser. Moscow responded by increasing transport tariffs, with current logistics costs reaching approximately EUR 42 (USD 48) per tonne. In 2025, 11.6 million tonnes of fertiliser moved through the Russian logistics system, generating roughly EUR 486 million annually. Russian Railways captures a significant portion of this, receiving approximately EUR 25–26 per tonne.
Socio-Economic Impact on Daugavpils
The reduction in freight volume has created a direct labor crisis in Latvia. LDz Cargo plans to lay off 300 employees this autumn, with 150 of those positions located in Daugavpils. The city faces a broader employment contraction, as the international outsourcing firm Concentrix and Grīva Prison have also announced collective redundancies, bringing the expected total job losses in Daugavpils to nearly 700.
Daugavpils Mayor Andrejs Elksniņš characterized the situation as a signal that the state is withdrawing from the city. Industry representatives suggest that if these cargo flows were still routed through Latvia, the economy could generate approximately EUR 125 million annually through taxes, logistics operations, and terminal services.
Frequently Asked Questions
How much revenue did Russian Railways generate from Belarusian fertiliser in 2025?
Russian Railways earned approximately EUR 287.4 million (USD 324.8 million) from transporting these shipments.
How many employees is LDz Cargo planning to lay off?
The company plans to lay off 300 employees across Latvia this autumn, including 150 workers based in Daugavpils.
What is the estimated economic loss for Latvia due to the shift in transit routes?
Industry representatives estimate that if the current cargo volumes were transported through Latvia instead of Russia, the Latvian economy could generate approximately EUR 125 million annually.
How should regional authorities balance the enforcement of international sanctions with the protection of local employment and infrastructure?
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