indexation of railway freight tariffs<\/a>. The last time Ukrzaliznytsia raised freight tariffs was in June 2022, resulting in a 140% increase in the cost of transporting coal, ore, and limestone, a 70% rise for metals, and a 65% rise for grains.<\/p>\nMember companies of the \u0415\u0412\u0410’s Logistics Committee are concerned about the impact of tariff increases on businesses. High logistics costs remain a major barrier to exports. According to the \u0415\u0412\u0410’s experts, logistical expenses have significantly risen due to Russia’s military aggression, reaching up to 40% of production costs<\/strong> in certain industries. Combined with challenges in the energy sector, staff shortages, and increased logistics costs, these factors substantially raise expenses for Ukrainian businesses and weaken the competitiveness of Ukrainian goods on international markets.<\/p>\nIt is worth noting that even current tariffs exceed the affordability of market participants, forcing companies to cut production or switch to road transport. This shift leads to road destruction and increases the state budget’s repair expenses by billions.<\/p>\n
Moreover, the loss of rail logistics competitiveness results in revenue losses for Ukrzaliznytsia. According to the company\u2019s publicly available financial reports, it recorded a profit of \u20b41.6 billion for the first nine months of 2024, compared to \u20b48.2 billion for the same period in 2023. Meanwhile, the carrier\u2019s management is already forecasting losses of up to \u20b42.5 billion by the end of 2024. The business community believes that Ukrzaliznytsia\u2019s financial performance underscores the urgent need to review its cost management strategy.<\/p>\n
Ukrzaliznytsia\u2019s primary financial challenges are not related to freight transportation (which, according to \u0415\u0412\u0410 member companies, had a profitability rate of 27% in 2023) but stem from passenger transportation. According to business estimates, passenger transport losses could reach \u20b420 billion in 2024. In wartime conditions, covering these expenses from the state budget is unrealistic, but they can be mitigated through cost optimisation and improvements to the suburban transport payment system.<\/p>\n
Optimising costs, enhancing operational efficiency, and attracting clients to railways through competitive tariff policies could significantly improve Ukrzaliznytsia’s financial position. Instead of raising tariffs, which would increase financial pressure on businesses and reduce freight volumes, it is crucial to focus on supporting exports. Containing logistics costs will help retain freight on railways, preserve foreign currency inflows to the budget, and promote economic stability.<\/p>\n
Given this, the European Business Association has urged the Prime Minister of Ukraine to prevent tariff increases, considering the realities of the industrial sector and export markets. Additionally, the \u0415\u0412\u0410 asks the relevant ministries and Ukrzaliznytsia to implement measures to optimise costs and improve the company\u2019s operational efficiency. This approach would preserve the competitiveness of Ukrainian goods, enhance the attractiveness of railway transport, and ensure the sustainable development of both businesses and transport infrastructure.<\/p>\n
<\/p>","protected":false},"excerpt":{"rendered":"
The European Business Association has sent an official letter to the Prime Minister of Ukraine requesting to prevent an increase in railway freight tariffs, as this would create an additional financial burden for businesses and reduce the competitiveness of rail logistics. To recap, in December, the Supervisory Board of Ukrzaliznytsia approved a 37% indexation of […]<\/p>\n","protected":false},"author":33544,"featured_media":613013,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false},"categories":[4,5,22],"tags":[],"yoast_head":"\n
Business calls for refraining from raising tariffs for rail freight - European Business Association<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/eba.com.ua\/biznes-zaklykaye-utrymatysya-vid-pidvyshhennya-taryfiv-na-zaliznychni-vantazhni-perevezennya\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Business calls for refraining from raising tariffs for rail freight - European Business Association\" \/>\n<meta property=\"og:description\" content=\"The European Business Association has sent an official letter to the Prime Minister of Ukraine requesting to prevent an increase in railway freight tariffs, as this would create an additional financial burden for businesses and reduce the competitiveness of rail logistics. 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