Business calls for revision of the proposed increase in rail freight tariffs

03/ 07/ 2026

The European Business Association has appealed to the Ministry for Development of Communities and Territories of Ukraine to reconsider the proposed 30% increase in rail freight tariffs envisaged by the draft order amending the coefficients applied to the Tariff Schedule for Rail Freight Transportation. Member companies of the Association’s Logistics Committee have expressed concern over the proposed initiative, noting that its economic rationale requires further assessment. In the business community’s view, the potential negative impact on the economy could outweigh the additional revenue that Ukrzaliznytsia expects to generate through the tariff increase. According to an assessment by the State Enterprise Ukrainian Industry Expertise, a sharp increase in rail freight transportation costs could have significant adverse consequences for the economy. In particular, it may lead to a reduction in freight volumes, lower competitiveness of Ukrainian producers, declining production and exports, and reduced state budget revenues. At the same time, it could also negatively affect Ukrzaliznytsia’s own financial performance due to a further decrease in transportation volumes. The business community believes that the financial sustainability challenges faced by the railway operator are systemic and cannot be resolved solely by increasing freight tariffs. According to estimates by the Association’s member companies, the freight segment generated approximately UAH 20 billion in operating profit annually in 2023–2024, indicating that other factors are contributing to the company’s financial position. Among the key issues that, in the business community’s opinion, require priority attention are the chronic losses incurred by passenger transportation services, insufficient state funding of the Public Service Obligation (PSO) mechanism, and the maintenance of a substantial amount of economically unprofitable railway infrastructure. According to the Committee’s experts, these issues require comprehensive solutions alongside improvements in the company’s operational efficiency and cost optimisation. In light of the above, the European Business Association calls for the proposed 30% tariff increase to be reconsidered in favour of a moderate, economically justified adjustment following open consultations with the business community. According to the Association’s member companies, any tariff revision should be limited to the minimum necessary level, estimated at around 5–10%. In addition, businesses urge the government to ensure full state financing of passenger transportation under the PSO mechanism, continue optimising Ukrzaliznytsia’s costs by improving labour productivity, reviewing the company’s cost base, and rationalising loss-making infrastructure, as well as introduce measures to stimulate rail freight transportation in support of Ukrainian industry and exports. The business community recognises the importance of ensuring the stable operation of Ukrzaliznytsia as a strategic infrastructure company. At the same time, its financial stabilisation should primarily be based on systemic reforms and greater operational efficiency, rather than placing additional tariff burdens on freight shippers, particularly amid the ongoing war, declining industrial output, and challenging logistics conditions.

Member companies of the Association’s Logistics Committee have expressed concern over the proposed initiative, noting that its economic rationale requires further assessment. In the business community’s view, the potential negative impact on the economy could outweigh the additional revenue that Ukrzaliznytsia expects to generate through the tariff increase.

According to an assessment by the State Enterprise Ukrainian Industry Expertise, a sharp increase in rail freight transportation costs could have significant adverse consequences for the economy. In particular, it may lead to a reduction in freight volumes, lower competitiveness of Ukrainian producers, declining production and exports, and reduced state budget revenues. At the same time, it could also negatively affect Ukrzaliznytsia’s own financial performance due to a further decrease in transportation volumes.

The business community believes that the financial sustainability challenges faced by the railway operator are systemic and cannot be resolved solely by increasing freight tariffs. According to estimates by the Association’s member companies, the freight segment generated approximately UAH 20 billion in operating profit annually in 2023–2024, indicating that other factors are contributing to the company’s financial position.

Among the key issues that, in the business community’s opinion, require priority attention are the chronic losses incurred by passenger transportation services, insufficient state funding of the Public Service Obligation (PSO) mechanism, and the maintenance of a substantial amount of economically unprofitable railway infrastructure. According to the Committee’s experts, these issues require comprehensive solutions alongside improvements in the company’s operational efficiency and cost optimisation.

In light of the above, the European Business Association calls for the proposed 30% tariff increase to be reconsidered in favour of a moderate, economically justified adjustment following open consultations with the business community. According to the Association’s member companies, any tariff revision should be limited to the minimum necessary level, estimated at around 5–10%.

In addition, businesses urge the government to ensure full state financing of passenger transportation under the PSO mechanism, continue optimising Ukrzaliznytsia’s costs by improving labour productivity, reviewing the company’s cost base, and rationalising loss-making infrastructure, as well as introduce measures to stimulate rail freight transportation in support of Ukrainian industry and exports.

The business community recognises the importance of ensuring the stable operation of Ukrzaliznytsia as a strategic infrastructure company. At the same time, its financial stabilisation should primarily be based on systemic reforms and greater operational efficiency, rather than placing additional tariff burdens on freight shippers, particularly amid the ongoing war, declining industrial output, and challenging logistics conditions.