The main carrier of the aggressor, JSC Russian Railways, is additionally raising tariffs for freight transportation from June 1.

Russian Railways performance indicators

This is reported by the railway magazine Railway Supply with reference to Kommersant.

On the evening of May 28, a decree of the Government of the Russian Federation of May 27 was published, approving an additional indexation of freight railway tariffs by 11% from June 1. Import transportation of consumer goods, domestic transportation of food products and mineral construction cargo will be exempted from additional indexation. In addition, from June 1 to August 31, the reduction coefficients for the transportation of coal, namely 0.4 for the range and 0.895 for the transportation of thermal coal for export, will be canceled.

The Federal Antimonopoly Service of the Russian Federation confirmed the development of the order, calling it a “one-time additional measure” that “will allow the investment program of Russian Railways to be implemented in the planned volume.”

The publication recalled that the total amount of funding lost by Russian Railways due to a general decrease in loading and freight turnover, as well as an increase in the cost of credit resources and inflationary pressure, exceeds 620 billion rubles.

Previously, three options were considered to reduce the investment program deficit, including additional tariff indexation by 1.4–11%. At the same time, they did not completely cover the deficit of the investment program: it remained at the level of 220-246 billion rubles.

The option with a maximum indexation of 11% from June 1 should bring the carrier 90.3 billion rubles of additional income under this item.

The market is surprised by this decision. One of the interlocutors of the publication noted that the decision was announced “in a shock format”: “According to the standard, such decisions should be published 10 days before entry into force. And here everyone was confronted with a fact and the business will face not a planned, but an unexpected increase in costs.”

It is assumed that among the shippers, coal miners will suffer the most, primarily in Kuzbass, because the rest of the regions are closer to the ports.

Another source believes that the entire industry will suffer from the measures introduced. “First of all, these are, of course, metallurgists, coal companies, and operators. But the increased tariffs for empty run as a result will hit all industries, including the transportation of food and building materials. And this will inevitably lead to acceleration of inflation in the country.”

It is also noted that these measures will not help improve the situation with cargo transportation and, as a result, only Russian Railways is beneficial.

“Even for a monopoly, the benefits will be short-term: exports will fall, alternative markets will become impassable due to tariffs and excises,” the source adds. – Production and investment plans of companies will inevitably be reduced, the issue of staff reduction is being discussed. As a result, Russian Railways will face the problem of loss of income again, but this time due to a decrease in shipments.”

The monopoly should “direct the funds received to improve key performance indicators, such as the speed of delivery and cargo turnover, which has not yet been observed, despite the efforts and subsidies of the state.”

Analysts, on the other hand, believe that the approved scheme does not create incentives for Russian Railways to resolve the issue of orienting cargo flows to the east and south, which are acute for shippers, and also to quickly open bottlenecks.

As previously reported, Russian Railways plans to raise tariffs three times during the year.

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