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Nov 12, 2024

Russia gets higher rail freight tariffs | RailFreight.com

Russian Railways (RZD) is increasing tariffs on its rail network by 13,8 per cent for freight traffic. The hike will come into effect on 1 December, and is lower than earlier expectations of either

Russian Railways (RZD) is increasing tariffs on its rail network by 13,8 per cent for freight traffic. The hike will come into effect on 1 December, and is lower than earlier expectations of either 17,2 or 22,7 per cent. RZD refers to necessary investments for 2025 as the underlying reason for the tariff measure.

The 13,8 per cent hike for rail freight transportation is not the only incoming tariff increase. Additionally, container and mineral and construction freight will see prices grow by 5 per cent from January onwards. Empty wagon transportation will become 10 per cent more expensive. The Russian network is cluttered with empty wagons, and RZD likely wants to de-incentivise companies from leaving them unloaded.

Reportedly, RZD has now switched to a new indexation of tariffs, which takes into account industrial rather than consumer inflation. It will now use indicators such as industrial, fuel and energy prices to calculate its rail tariffs.

Moreover, in addition to growing mineral and construction freight tariffs by 5 per cent, Russia has agreed with its ally Belarus to harmonise those tariffs. Both countries will be charging the same tariff as their rail integration within the framework of the so-called Union State deepens. Russia and Belarus are working towards a complete harmonisation of rail tariffs on their networks.

Earlier, RZD floated two options for tariff increases. It was to either increase tariffs by 22,7 per cent in one go, or by 17,2 in two stages. It seems that it has opted for another approach altogether by raising tariffs by 13,8 per cent from December onwards. It remains to be seen if further hikes will follow in the near future.

Eurasian rail freight will be one of the key Silk Road topics we will discuss at the European Silk Road Summit 2024, taking place in Vienna on 27-28 November.

Registrations for the yearly event are already open, while the programme, which this year highlights the fast-recovering China-Europe rail market, is shaping up.

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