Ukraine. Ukrzaliznytsya increased freight rates by 14.2%

March 30, "Ukrzaliznitsya" has again raised the tariffs for cargo transportation, is now 14.2%, which was the first stage of implementation of the system of automatic indexation of tariffs on the price index of industrial producers. A new concept of tariff that will be fair for railway and shippers, will be worked out by the company together with market participants until July 1, 2019.

Specifically opened an investment account Ukrzaliznytsia will accumulate revenues from the indexation of tariffs, which will increase the efficiency of use of the obtained Finance.

The Next stage of improvement of the tariff policy the company believes the introduction of automatic indexation of tariffs for cargo transportation.

The Question of whether the introduction of automatic indexation of tariffs has been resolved, now we need to define the terms. The common tariff system will be developed by July 1, and eliminate the disadvantages of the current system.

For its part, the company offers market participants the quarterly indexation of the actual changes in the index of prices of industrial producers and insisted on the introduction of the investment component of the tariff. In this quarterly indexation of tariffs for cargo transportation in the amount of 2.5% will also remain.

State regulatory service agreed on a decision to raise freight tariffs by 14.2% in accordance with the approved Cabinet of the financial plan of the company, in addition to the foregoing the increase in tariffs provides for the automatic indexation of tariffs from 1 may to 2.5%, from 1 August to 5% and from 1 November to 7.5%.

In 2019, Ukrainian Railways plans to transport 331 million tonnes of cargo which is 4.8% below plan for the year 2018. Income from freight transportation can be 83,991 billion UAH, which is by 16.7% or UAH 12 bn over the plan for 2018.

The Increase in freight rates will automatically reduce by 100-200 UAH/t purchase price on elevators, where the product is shipped by rail. This will be another blow, especially for small businesses where the closure of the stations due to the low turnover led to a rise in traffic to 150-200 UAH/t

The Increase in rail tariffs has increased the volume of traffic and increased the load on the road, although well-developed railway structure allows you to export all the grain from Ukraine. However, persistent problems of Railways with traction, fuel, or logistics forces manufacturers to buy cars and themselves to engage in the transportation of grain to ports.

 
GrainTrade