Regular increase of “Ukrzaliznytsia” for rail freight kills exports of food industry, says president of the association “Ukrkondprom” Oleksandr Baldyniuk. This is stated in article “Ukrzaliznytsia” inflates rate: Business warns of economic slowdown” 112.among others.

According to the president of association “Ukrkondprom”, only confectionery exports for 4 years have already lost 60 thousand tons due to the increase of tariffs and protectionist actions of Russia.

Commenting on the provision of “Ukrzaliznytsia” the right to automatically index tariffs on rail freight for the index of industrial producers' prices, said Baldyniuk, it would negatively affect both business , and the economy as a whole. As an example, he cited the situation with the granting of US rights to self-determine the rate for the use of wagons. According to Baldyniuk, the share of the state monopolist only in covered wagons (used to transport food) reaches 78%. Read more »

Comment of the president of the Association “Ukrkondprom” Oleksandr Baldyniuk.

The most negative impression in cooperation with "Ukrzaliznytsia" in 2018 was the further increase of tariffs for the use of own carriages of the carrier, which is a heavy knockdown for Ukrainian exporters of food products.

As you know, from 13 November 2018 was introduced new rates for using their own wagons and UZ carrier charges for using wagons UZ carrier outside Ukraine, are introduced despite the previous repeated increases in tariffs.

The increase in the rates for the use of UZ rail cars only in 2018 led to an increase in logistics costs for the delivery of one car to sales markets, for example, to Central Asia for about $2 thousands and a rise in the cost of confectionery by 5%.

The decision of the financial problems of the carrier due to extraction of additional funds from other branches of the economy due to the increase of tariffs is effective for UZ only in the short-term period. After all, prices for UZ rail wagons have already reached the limit, when their use in the export of many types of products balances on the margins of profitability, so exporters will be forced to gradually abandon the use of rail transport. For example, the volume of transportation of confectionery by rail in 2017 decreased by 18% (by 13,3 thousand tons).

This negative dynamics will be maintained further, if the tariff policy of UZ will not change”