This paper explores the integration of rail transport in urban logistics, focusing on logistics operations, environmental outcomes, sustainability, and policy effectiveness in respect of the European Union (EU) legal framework. Rail-enabled urban logistics, characterized by using rail for freight transportation to the center of the cities, aligns with EU goals to reduce emissions, congestion, and pollution. In addressing this void, we undertake a state-of-the-art review and adopt a systematic analysis of the extant literature to determine gaps in knowledge and identify implications for policy and areas for future research. The review emphasizes the role of multimodal hubs and last-mile delivery systems in enabling efficient rail-road coordination. The results indicate significant environmental benefits, such as reduced carbon emissions and traffic congestion. Still, economic viability remains challenging due to high infrastructure costs and inefficiencies at modal transfer points. As a result of performing a state-of-the-art review, the contributions are twofold: (1) providing the foundations for developing a theoretical framework that policymakers can use to ensure resilience and adaptability to change, and (2) identifying the need for research to examine best practices in European cities and providing practical recommendations especially for the implementation in the conditions of the Czech Republic.