Rail cargo shipments in Ukraine decreased by almost 70%

Rail cargo shipments volume during first 9 days of March in Ukraine has fallen by almost 70% y-o-y, according to national rail operator Ukrzaliznytsia. Approximately the same rate of decline in both domestic transportation and export-import.

The structure of transported goods has changed significantly. The share of coal has risen from 18% to 29%, as thermal power plants build up stocks. The share of iron ore remained at the same level – about 30%, as it is the only mass export commodity at the moment. The export of ferrous metals has ceased from 8% last year, as all plants have been put into idle mode. The share of oil and oil products increased to 7% when the supply routes changed from Russia and Belarus to Poland and other neighboring European countries.

The role of Ukrzaliznytsia is extremely high in ensuring security and economic development in wartime. First of all, Ukrzaliznytsia transported more than 2 million refugees. Transportation of passengers by rail today is the safest mode of transport in Ukraine.

Also, the rail shipments become the only export opportunity for Ukraine when Russian warships block supplies across the Black Sea. For example, iron ore companies work with 50% utilization because of the inability to transport a larger volume of products in the direction of European ports.

The export of agricultural products was blocked; before the war, 95% was exported through seaports. Grains shipments volume by rail fall by 87% since the 1st of March, y-o-y.

The problem is in the low capacity of border crossings with the EU and different gauges in Ukraine and in European countries. To solve this problem, Ukrzaliznytsia plans to double the capacity of border crossings to increase export deliveries.

The company has also developed routes for the delivery of goods to the EU borders with subsequent reloading into European standard wagons and asks businesses to assist in organizing such reloading points.

It is also expected that the fuel shortage in Ukraine will be resolved through imports from the EU by rail.

Read more in the analyst study GMK Center.