The flow of trucks on Hungarian roads is started by the inflow of working capital

One after another, foreign capital import records are being broken: after last year’s 6.5 billion euros, foreign investment worth 13 billion euros is expected this year Péter Szijjártó according to the Minister of Foreign Affairs and Trade, and in the following years, the plan is for the government to boost economic growth with large foreign investments (and to partially replace the missing EU funds with them). The announced developments in the battery industry are already well over HUF 7,000 billion – as we wrote, production or preparation for production is taking place at more than 40 locations, and we did not even talk about the network of warehouses for temporary storage and distribution of hazardous materials, as well as the ones that absorb scrap and used batteries of waste processors, such as the Slovenian plant planned for Alsózsolcá, which angered the population.

The battery business, in which the Hungarian government is striving for superpower status, generates a huge demand for goods transport, raw materials, intermediates and finished products must also be delivered to their destination. Among the players in the value chain – raw material, raw material, component and cell manufacturers, original equipment manufacturers (OEM), recyclers – there are no raw material manufacturers in Hungary, but the other players in the value chain generate waste, which is partly dangerous, but the amount of this is not currently known data are available. Zoltán Doór, the president of the Hungarian Logistics Association (MLE) could not give exact figures for Hungary, but there are data from Germany about the amount of waste to be treated: there it is estimated that by 2025, 160,000 tons of batteries from electric cars will be in a “ready-to-replace” state.

The growth will certainly be significant in Hungary as well, it is another question how much of a share the domestic players of the logistics market will be able to obtain. Looking at the possibilities, Zoltán Doór said that major foreign investors usually bring their logistics service providers with them. A similar situation can be expected for Asian battery manufacturers, all the more so because they have strong companies in maritime transport. In the case of the Hungarian car factories, they also found that in the early years of production, they worked almost exclusively with their home country suppliers and logistics service providers, and then the Hungarian service providers gradually took over the role of the foreigners.

However, the increase in the demand for goods transport is not only generated by the multiplying battery factories, but also significant developments by the already announced investors who are engaged in other types of manufacturing activities, emphasized the president. Currently, approximately 50 percent of the inflow of working capital comes from the territory of the European Union and the United States, as well as from the countries of Asia, primarily Southeast Asia.

Significant investment announcements are also expected from India in the near future, on the one hand about the large-scale increase in capacity of companies that are currently producing, and on the other hand about new investments in Hungary by major Indian economic players on the world market.

As a result of all this, the demand for transport in all forms of transport increases. The growth rate of air transport is typical of the fact that Ferihegy Airport’s cargo business has already completed its annual plan by May 2023. However, due to the global economic slowdown, an average drop of less than 10 percent should be expected in 2023 in the case of sea, rail and road freight transport. On the other hand, from 2024, when the new factories start production, an average annual volume increase of 10 percent is expected, Doór predicted. For this, adequate capacities must be provided.

40,000 people are awaiting retraining

In addition to battery production, the demand for electric cars, trucks and buses is forecast to explode around the world. The size of the market was estimated at 209 billion dollars in 2022, but it is expected to reach 1.1 trillion dollars by 2030, which represents an annual growth rate of around 23 percent until then. The battery accounts for at least 30 percent of the value of electric cars, and the sector is accordingly huge business. According to the forward-looking industry strategy of the former Ministry of Innovation until 2030, in the electromobility revolution, “about half of the 175,000 people working in the automotive industry will be affected in some way” and “about 40,000 of them will need to be retrained by the end of 2025.” This number also includes specialists performing logistics tasks, the MLE focuses on them with its training, the president concluded.

Recently, the association announced advanced logistics manager training related to battery production in Nyíregyháza, where Péter Szijjártó announced the HUF 580 billion giga investment of Sunwoda, a top ten Chinese battery manufacturer, a few weeks ago. According to the association’s calculations, the demand for logistics specialists will double in the next 15 years, and the expectation will shift towards higher education, Zoltán Doór said. The production and delivery of batteries requires special knowledge, because some intermediate materials and the final product are classified as dangerous goods by law in all parts of the world. That is why special knowledge is needed – he justified the start of the training, in the framework of which knowledge of dangerous goods is taught as a separate subject.

The batteries go from China to Kecskemét and from Győr to Germany

The currently known battery factories and manufacturers of battery raw materials, components and cells are located along the expressways or the roads leading to them, so there is no need to develop a separate transport infrastructure, Zoltán Doór believes. Large quantities of raw materials usually arrive in the country by rail, few parts will arrive by air, according to him, road transport may be the winner for the transport of the finished product. Interestingly, he noted that

the batteries arrive at the Mercedes factory in Kecskemét from China by truck.

We asked the main transport companies and organizations whether they deal with the transport of battery raw materials, production waste and batteries that have become waste, which are considered hazardous materials, what kind of growth they expect in the coming years, and how they ensure that shipments of hazardous materials reach their destination safely in the event of an emergency and the environmental impact should be as small as possible.

The upsurge in battery production may place additional demands on transporters, the Association of Hungarian Road Transporters believes, although they do not yet have precise information on this, given that they do not know which mode of transport (road or rail) will be the main one. As far as the transport of dangerous materials is concerned, the association could not name the companies supplying the materials needed for the already started factories (such as Samsung in Göd and SK in Komárom). They stated that they can carry out this activity based on strict rules, which are regulated by the European Convention on the Carriage of Dangerous Goods by Road (ADR) at the EU level. This also includes various batteries and hazardous materials and waste related to production. Compliance with ADR rules is strictly monitored.

MÁV does not have a freight business, so it is not involved in the case, especially Rail Cargo Hungaria Zrt., the market leader in rail freight. The company started the delivery of batteries in 2022, “from Győr to Germany”, and this is about 23 thousand tons in 2022 , reported a turnover of 27,000 tons by August 2023. At the moment, they do not transport waste batteries, but “we have the ability to do so if the need arises”, they answered. It was emphasized that the protection of the employees, the population and the environment during the transport of dangerous goods by rail is an extremely important aspect, and for the sake of safe transport, special attention is paid to compliance with the Regulations on the International Transport of Dangerous Goods by Rail (RID). The regulations determine the conditions under which certain dangerous goods and materials must be transported, for example, in what packaging and in what means of transport. At Rail Cargo, there has not yet been an emergency situation related to battery transport, if such an event were to occur, the National Directorate General for Disaster Prevention must be notified, and the situation must be handled in accordance with the regulations in cooperation with them.

We inquired about the rapidly increasing air traffic at Budapest Airport Zrt., which operates the Ferihegy airport. Their communications department stated that their task is to ensure the airport infrastructure, and the monitoring and management of goods transported on airplanes are the responsibility of transport companies, cargo handling companies, airport service companies, and the authorities. They are assured that strict domestic and international regulations apply to the transport and storage of dangerous goods, such activities can only be carried out by companies with permits, which are constantly checked by the relevant domestic and international authorities outside and inside the airport.

Air transport is generally used by companies due to its speed, so long-term (more than a few hours or maximum 1-2 days) storage of goods delivered by plane in the air port is not typical. Budapest Airport’s cargo handling warehouses are located hundreds of meters from the passenger handling buildings – Budapest Airport answered our question. In the case of the airport, tasks related to the transport of dangerous goods, including their notification, are carried out by ground handling companies active in the cargo area. We also looked for these companies, but they did not answer our questions until the writing of our article.