Operail reduces cargo transportation by 68% in nine months

Estonia’s railway cargo company, Operail, faced significant challenges in the third quarter of 2023, this is reported by the railway transport news portal Railway Supply.

Despite substantial reductions in operational expenses, the company continues to operate at a loss.

The construction project of a logistics terminal in Almaty has commenced

During the first nine months of 2023, Operail transported only 1.5 million tons of cargo, which is a 68% decrease compared to the previous year. To reach the planned target of 2.2 million tons by the end of 2023, the company must increase its transportation volumes in the final quarter.

The reduction in transportation volumes has significantly impacted Operail’s revenues, which decreased by 43% over the course of nine months. The CEO of the company, Raúl Toomsalu, pointed out that this decline is associated with sanctions against Russia and the cessation of transportation of Russian goods subject to sanctions.

Additionally, rising prices for railway services, especially compared to road transport tariffs, have also affected the company’s financial health.

To improve the situation, Operail aims to expand its business beyond Estonia.

Operail faced challenges in the previous year due to EU sanctions against Russia and Belarus, resulting in losses and the discontinuation of several services and infrastructure projects.

The company downsized its workforce and sold off several subsidiary companies and railcars.

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