Business asks Ukrzaliznytsia for clarification regarding the monopoly on fitting platforms for cargo transportation

21/ 07/ 2021

In June this year, the EBA member companies began to receive notifications from the branch Center of Transport Service Liski of JSC Ukrzaliznytsia that the management of Ukrzaliznytsia’s fitting platforms (used for container transportation) will be transferred to the branch CTS Liski” from June 17, 2021, according to the decision of the Board of Ukrzaliznytsia. It should be noted that the procedure was not changed for freight forwarding on the fitting platforms owned by Ukrzaliznytsia, at least, such information was not published on the website of Ukrzaliznytsia. However, as early as mid-June, companies that use the fitting platforms of Ukrzaliznytsia have been denied approval to plan the transportation of goods under the payers code based on an Agreement with Ukrzaliznytsia. Meanwhile, it was unjustifiably announced that cargo was shipped on the fitting platforms of CTS Liski exclusively under the code CTS Liski. The EBA member companies are concerned about the above-mentioned actions by the branch CTS Liski and the increase in the cost of railway services. Currently, the commission for forwarding containers/wagons is UAH 477.39 (without VAT) per 1 wagon/container. This commission did not exist before when the wagons were managed by the Transport Logistics Center. According to preliminary information, the cost of forwarding will increase and will amount to UAH 516.06 without VAT per 1 car/container starting from August. The business believes that this forwarding service is imposed on companies by a branch CTS Liski, while companies can conduct appropriate operations on their own based on a direct contract for the provision of the goods transportation services by rail with Ukrzaliznytsia as the carrier. In addition, the terms offered by the branch CTS Liski are not aimed at implementing the strategic priorities of Ukrzaliznytsia in the context of technological modernization, namely optimizing information processing and transparency, which are already used by the business environment. Instead, business representatives inform that the branch CTS Liski implements paper document circulation with submission of written orders, drafting paper protocols of cost approval, registration of applications for transportation and submission of wagons, receipt of paper instructions from CTS Liski, registration of applications for approval, transportation plans and the provision of shipping information, which may lead to additional involvement of workers by customers, etc. As reported by the EBA Logistics Committee, CTS Liski did not provide answers to the appeal in which the business asked for clarification of reasonable grounds for the CTS Liski” refusing to approve transportation plans based on the Accession Agreement. in cars (platforms) operated by CTS Liski. However, under the Accession Agreement, there is a clear delineation of duties, responsibilities, and rights of the parties. Thus, the Accession Agreement is a public contract under which the carrier undertakes the obligation to provide services related to the organization and implementation of the carriage of goods by rail for public use to anyone who applies for it. The terms of the public contract are set the same for all customers, and the customer, in turn, must pay the carrier for such services. Moreover, the Accession Agreement confirms the absence of mandatory provision of such a service by the branch CTS Liski. The European Business Association asked Ukrzaliznytsia for clarification, but we did not receive any response. Therefore, the business appeals to Oleksandr Kubrakov, Minister of Infrastructure of Ukraine and Ivan Yuryk, Acting Chairman of the Board of Ukrzaliznytsia with a request to clarify the issue as the monopoly capture in this situation is unacceptable! Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.

In June this year, the EBA member companies began to receive notifications from the branch Center of Transport Service “Liski” of JSC Ukrzaliznytsia that the management of Ukrzaliznytsia’s fitting platforms (used for container transportation) will be transferred to the branch CTS “Liski” from June 17, 2021, according to the decision of the Board of Ukrzaliznytsia.

It should be noted that the procedure was not changed for freight forwarding on the fitting platforms owned by Ukrzaliznytsia, at least, such information was not published on the website of Ukrzaliznytsia. However, as early as mid-June, companies that use the fitting platforms of Ukrzaliznytsia have been denied approval to plan the transportation of goods under the payer’s code based on an Agreement with Ukrzaliznytsia. Meanwhile, it was unjustifiably announced that cargo was shipped on the fitting platforms of CTS “Liski” exclusively under the code “CTS” Liski”.

The EBA member companies are concerned about the above-mentioned actions by the branch CTS “Liski” and the increase in the cost of railway services. Currently, the commission for forwarding containers/wagons is UAH 477.39 (without VAT) per 1 wagon/container. This commission did not exist before when the wagons were managed by the Transport Logistics Center. According to preliminary information, the cost of forwarding will increase and will amount to UAH 516.06 without VAT per 1 car/container starting from August.

The business believes that this “forwarding” service is imposed on companies by a branch CTS “Liski”, while companies can conduct appropriate operations on their own based on a direct contract for the provision of the goods transportation services by rail with Ukrzaliznytsia as the carrier. In addition, the terms offered by the branch CTS “Liski” are not aimed at implementing the strategic priorities of Ukrzaliznytsia in the context of technological modernization, namely optimizing information processing and transparency, which are already used by the business environment.

Instead, business representatives inform that the branch CTS Liski implements paper document circulation with submission of written orders, drafting paper protocols of cost approval, registration of applications for transportation and submission of wagons, receipt of paper instructions from CTS Liski, registration of applications for approval, transportation plans and the provision of shipping information, which may lead to additional involvement of workers by customers, etc.

As reported by the EBA Logistics Committee, CTS “Liski” did not provide answers to the appeal in which the business asked for clarification of reasonable grounds for the CTS “Liski” refusing to approve transportation plans based on the Accession Agreement. in cars (platforms) operated by CTS “Liski”. However, under the Accession Agreement, there is a clear delineation of duties, responsibilities, and rights of the parties. Thus, the Accession Agreement is a public contract under which the carrier undertakes the obligation to provide services related to the organization and implementation of the carriage of goods by rail for public use to anyone who applies for it. The terms of the public contract are set the same for all customers, and the customer, in turn, must pay the carrier for such services. Moreover, the Accession Agreement confirms the absence of mandatory provision of such a service by the branch CTS “Liski”.

The European Business Association asked Ukrzaliznytsia for clarification, but we did not receive any response. Therefore, the business appeals to Oleksandr Kubrakov, Minister of Infrastructure of Ukraine and Ivan Yuryk, Acting Chairman of the Board of Ukrzaliznytsia with a request to clarify the issue as the monopoly capture in this situation is unacceptable!

Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.