Ukrainian railway rocks the boat in the cargo market

Plans for a massive price increase in cross-border freight transport bring the partner railways on the scene

Ukrainian railway rocks the boat in the cargo market

A planned price increase for the Ukrainian railway company Ukrzaliznica put the supply of raw materials to strategically important companies at risk, as well as the safety of numerous jobs in the Eastern European region. That’s what Dr. Imre Kovács, CEO of Rail Cargo Hungaria (RCH) and from mid-February CEO of the parent company Rail Cargo Austria AG, emphasised in a press release.

According to the communication, the railway company Ukrzaliznica announced its unilaterally prepared price increase from 1 January 2019 to its Central European partners. According to them, the costs for the handling of cross-border traffic will be increased by about 50 per cent.

RCG – as well as the Polish, Slovakian and Romanian railways – have rejected this dictation, after which the Ukrainian company had temporarily curtailed the handling of export traffic with reference to a missing agreement on 1 February 2019.

The transports amount to about 32 million tonnes annually for all border crossings, on the Hungarian trade it is about 4 million tonnes. For Rail Cargo Hungaria, this price increase would result in about EUR 1 Mio. in additional costs.

This would also affect the activities of Dunaferr, Austria’s voestalpine and Serbia’s Smederevo steelworks. In addition, a price increase to this extent could cause serious problems in transportation of industrial salt for road traffic.

Imre Kovács emphasises in the press release that he supports the amicable settlement of the dispute as a future board member of the second largest rail freight company in Europe. According to the Rail Cargo Group, talks are already under way and should quickly lead to a positive outcome.