In the 2023-2024 marketing year (MY, July 2023 – June 2024), Agro-Region Agricultural Group refused to use freight forwarders, which allowed it to save 15% of the cost of railroad logistics, said Mykola Muravyov, Deputy Director of Logistics.
“Refusing to use freight forwarders and organizing rail transportation professionally on our own is a strategically sound decision. Of course, there are contracts on a “today-tomorrow” basis that are profitable to fulfill with freight forwarders when our own railcars are fully utilized, but these are isolated cases that we try to avoid,” the company’s press service quoted him as saying.
According to Muravyov, Agro-Region currently operates 100 railcars, of which 25 hopper cars were received by the company as part of the USAID Economic Support for Ukraine grant program.
At the peak of the 2023/2024 MY season, Agro-Region had up to 500 wagons under its operational control, as large volumes of corn harvest and uncertainty about whether the grain corridor and Black Sea logistics would work stably forced the company to make sales more concentrated in certain months to minimize risks, the deputy director explained.
He added that in the 2024/2025 season, the plan is more balanced and sales are planned in equal parts throughout the year, which significantly reduces the need for the number of wagons.
“The main indicator of the economic efficiency of railcar use is railcar turnover. It is important to organize the work so that the cars stand as little as possible and move as much as possible, i.e. make the maximum possible number of turns during the reporting period. The more turns a railcar makes, the more grain will be transported,” said the Deputy Director for Logistics.
Regarding railcar rental, he clarified that its cost is charged on a daily basis and does not depend on whether the railcar is idle or in constant motion.
Agro-Region is a group of agricultural companies that cultivate 40 thousand hectares of agricultural land in Chernihiv, Khmelnytsky, Kyiv and Zhytomyr regions. It has three elevators in Boryspil, Myropil and Zavorychi with a total storage capacity of about 160 thousand tons. The agricultural holding grows corn, wheat, rapeseed, soybeans, barley, sunflower and oats. In 2022, Agro-Region exported an average of 250-300 thousand tons of grain per year and is trying to increase its exports through its own and farmers’ grain.
