The decision was taken against the backdrop of the blockade of the Black Sea ports
The 30% increase in freight transport tariffs by JSC Ukrainian Railways (UZ) from 1 August this year will significantly increase costs for industrial and agricultural enterprises. This is reported by Forbes Ukraine.
Serhiy Vovk, Director of the Centre for Transport Strategies, believes that the timing of this decision is very unfortunate, as logistics costs have risen significantly due to the blockade of the Black Sea ports. According to him, delivery via the western border increases costs by approximately $50 per tonne, whilst exports via the Danube and the Romanian port of Constanța add $60–70 per tonne.
In response to an enquiry from the publication, Metinvest’s press office stated that the decision had been taken without taking business interests into account or conducting any analysis of its impact on the economy. At the same time, the main burden of this move will fall on the mining and metallurgical sector, which accounts for around 40% of Ukrainian Railways’ total freight volume.
Metinvest also emphasised that the business sector had explicitly warned that any increase in tariffs would lead to the shutdown of production assets and redundancies. However, this position was ignored, and the decision was justified solely on the basis of Ukrainian Railways’ losses. At the same time, the fact that these losses are not generated by freight transport was overlooked.
The company noted that last year, freight transport generated a profit of 5.8 billion UAH for Ukrainian Railways, whilst passenger transport resulted in losses of 20 billion UAH. According to Metinvest, over the period 2021–2025, more than 80 billion UAH in passenger transport losses were passed on to the business.
The increase in logistics costs for goods transported by rail will amount to around $15 per tonne — this is the estimate given by Oleksiy Yanovskyi, Deputy Chief Operating Officer for Procurement and Logistics at Interpipe. However, the company cannot completely abandon rail transport, particularly in Nikopol, which is located in a combat zone, due to security concerns.
The agricultural sector also confirms that the situation is becoming more complicated. Anton Zhemerdiev, Director of the Commercial Department at TAS Agro, notes that the increase in Ukrainian Railways’ tariffs will add approximately $5 per tonne to farmers’ logistics costs. For major grain exporters, the additional burden by the end of the year will amount to tens of millions of hryvnias.
Ukrainian Railways, for its part, had previously reported that without a tariff review, the operator faces an operating shortfall of 26.3 billion hryvnias and a net loss of 21.9 billion hryvnias by the end of the year.
It should be recalled that in July, the European Business Association appealed to the Ministry of Development, calling for a review of the proposed increase in rail freight tariffs. According to the business community, the potential negative consequences for the economy could outweigh the additional revenue that Ukrainian Railways expects to generate from this move.
Source Link