Ukrainian Railways should reduce the tariff for freight transportation to expand market share – expert

Export cargo flows in the country actually reached the pre-war level

JSC Ukrainian Railways (UZ), amid an increase in export traffic, should reduce freight tariffs in order to compete with road carriers. This opinion was expressed by the director of the Center for Transport Strategies Sergiy Vovk, commenting on the initiative of the UZ leadership to “harmonize” tariffs, which will lead to their increase, reports Glavcom.

According to the expert, export cargo flows have actually reached the pre-war level, so now Ukrainian Railways can not only increase volumes, but also compete with the road transport market, if you resort to such a step.

According to him, raising tariffs by 70% (held in July 2022) was a necessary measure that helped stabilize the financial condition of the UZ against the background of a critical drop in cargo flows due to the war.

«But we see now that export cargo flows are actually reaching pre-war levels. Moreover, we see that the US demonstrates a positive financial situation. So I see no reason for this situation to change, «says Vovk.

Sergiy Vovk believes that the US, given the situation in vehicles, should consider options for reducing tariffs – as it was done with shipments of agrarian goods from the front-line territories.

«This would allow to stimulate traffic, and to win some market share from road transport. It would be an expedient measure, «he explained.

According to the expert, now an important state task is to stimulate cargo flows in order to support both business and transportation. This will give the company even greater profits – given that its costs are currently not expected to grow. He also points out that in UZ, there are problems with electricity supply, but this applies to the entire economy. In addition, the company is actively working to resolve this issue through alternative sources. At the same time, cargo traffic tends to increase.

As GMK Center reported earlier, in the first half of 2024, UZ transported more than 90 million tons of cargo, which is 28% more than the same period in 2023. 45 million tons of cargo were transported for export (+59% y/y), imports – 5 million tons (+ 62% y/y), in domestic traffic – 40 million tons (+3% y/y). Among the main cargoes that were processed in January-June: iron ore, grain, coal, mineral materials.