Ukrzaliznytsia is able to export from 6.5 million tons of cargo per month – Anti-Crisis Headquarters

The issue of logistics and export opportunities remains one of the most difficult for business

The Anti-Crisis Headquarters for industry and business assistance, operating under the Ukrainian Union of Industrialists and Entrepreneurs (UUIE), believes that Ukrzaliznytsia is able to export at least 6.5 million tons.

It is said in the message published following the meeting of the Anti-Crisis Headquarters.

Nevertheless, there are still many problems – the need to expand and reconstruct checkpoints, create new ones, digitalize processes, as well as work with foreign partners (Poland, Moldova, Romania, etc.). In fact, rail transportation of the main items of Ukrainian exports – agricultural products and iron&steel complex – is carried out at the level of 50-53% of the potential.

According to the director of GMK Center Stanislav Zinchenko, considerable concern among manufacturers and exporters was caused by increase in the tariff for transportation by Ukrzaliznytsia – by 70%. Business requires compensatory measures, because logistics costs are growing at a catastrophic pace. For example, in the iron&steel complex, costs increased from 40% to 3.5 times compared to pre-war.

Mining and processing plants have accumulated production in a two-month volume, it is extremely difficult to ship it to foreign customers on time. In general, the decline in production in the mining & metals industry amounted to 53%. If at the state level, with the involvement of all resources – the railway, Danube ports, road transport – this issue is not resolved, then the Ukrainian mining & metals industry will lose the European market, it will be replaced there by Brazil, South Africa, etc., which are increasing steel production.

“We are appealing to the Ministry of Infrastructure, Ukrzaliznytsia, the government – together with industrialists, to think about ways to reduce the cost of freight transportation. First of all, this concerns the acceleration of border crossing – the creation of an electronic queue, the improvement of auctions for the use of wagons, etc. Anatolyi Kinakh.

Paradoxically, Ukraine is ready to increase the volume of rail traffic, but the problem is that Western infrastructure is not ready to serve such volumes.

“The ports of the Baltic and Romania are small, and it is difficult for them to serve Ukrainian exports in sufficient volumes on time. The same applies to the railway, which in the EU is designed mainly for passenger transportation. At present, the Poles are solving such barriers in this regard, so it is necessary to intensify diplomatic and professional work with other Western neighbors,” the members of the Anti-Crisis Headquarters emphasized.

Currently, Ukrzaliznytsia is trying to solve problems. In Moldova, for example, it helps with the repair of tracks in the border area in order to increase Ukrainian transit. Ukrainian specialists helped the Poles with the digitalization of processes at the crossing points.

Together with the EU and the US, an initiative is being considered to build large transshipment terminals at border points. Ukraine would deliver products there, and the Europeans at their own pace would continue its logistics to the ports by rail or by road. There are also very innovative proposals – for example, to use one of the pipelines for the transportation of oilseeds.

Deputy Minister for Strategic Industries Sergiy Tikhonov noted that the opening of two checkpoints in Zakarpattia in the direction of Hungary and Romania will double the export figures. According to him, the European partners understand that today Romania has reserved 12 hectares of land for these purposes.

The experts also touched the topic about the Danube port infrastructure. According to Anatolyi Kinakh, it demonstrates excellent performance, given the existing opportunities. But still, this direction should be developed, in particular, to engage in dredging on the Danube. According to the GMK Center, all port dues should now be directed specifically to the modernization of infrastructure.

Representative of Ukrzaliznytsia Timofiy Murakhovsky said that at the end of July, an electronic queue at checkpoints will be introduced, so it will become easier for businesses to make decisions by tracking where there are problem areas and the speed of the queues there.

Among other proposals of the experts of the Anti-Crisis Headquarters: initiation of phytosanitary control not at the border, but 20 km after its crossing (so there will be no traffic jams from the rolling stock at the crossing points), joint customs clearance; development of the Eurotrack on the Ukrainian side of the border, so that transshipment is carried out at our side (it will be faster).

All proposals will be finalized in the coming days and sent to government agencies. The work will be continued, within the framework of the working meetings of the Ministry of Infrastructure, the Ministry of Agrarian Policy, etc.

As GMK Center reported earlier, Interpipe notes growth in the cost of delivering products to customers by 2.5-3.5 times after the start of the war and the blockade of the Black Sea ports of Ukraine. Before the war, logistics costs accounted for 3-4% of the cost of the company’s products. Now the index has increased by at least 2.5 times.