Business news from Ukraine

Ukrzaliznytsia increases cargo transportation by almost 10% in July

JSC “Ukrzaliznytsia” transported 10.302 million tons of cargo in July, which is 9.2% more than in June this year.
“Domestic transportation, exports and imports have grown. Only transit has not grown, because it is practically non-existent. The transportation of most of our key cargoes has increased: grain, ore, coal, ferrous metals, diesel, building materials, etc. Vehicle transportation has dipped , coke, scrap metal, salt and oil,” Alexander Kamyshin, head of the railway company, wrote on his Telegram channel on the evening of August 1.
According to the data he provided, in July 2022 UZ transported 542 thousand tons of oil and oil products (an increase of 12.2%), 2.033 million tons of ore raw materials (+3.2%), 1.462 million tons of grain (+7.2% ) and 6.266 million tons of other cargoes (+11.6%).
“Yes, the growth is slow. We are doing everything possible for the constant growth of freight traffic, primarily export cargo. I hope that the unblocking of seaports for grain will help us increase grain exports faster,” Kamyshin said.
In domestic traffic, UZ transported 6.2 million tons in July, which is 10.5% more than in June this year.
3.4 million tons of cargo were transported for export, which is 8.7% more than a month earlier.
UZ also transported 598.8 thousand tons of imported cargo in July, which is 4.5 more than in June 2022.

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Ukrzaliznytsia changes schedule of two international trains

From August 15-16, JSC Ukrzaliznytsia speeds up two international trains and changes their departure time.
As noted in a message on the telegram channel UZ on the evening of July 28, from August 15, train No. 67 Kyiv-Warsaw will depart from Kyiv at 17:27 (instead of 18:23) and arrive in Warsaw at 10:04 (instead of 11:33) .
In addition, taking into account the growth in demand for this direction, Ukrzaliznytsia will add two more cars to the train from August 7 – ticket sales for them began on July 29.
Also from August 16, train No. 24 Helm-Kyiv will depart from Chelm at 16:46 (instead of 16:05) and arrive in Kyiv according to the preliminary schedule at 07:29.

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UKRAINIAN PRODUCERS ASSOCIATIONS CALL FOR MORATORIUM ON RAIL FREIGHT TARIFF INCREASES

Associations of Ukrainian manufacturers call on the Ministry of Infrastructure of Ukraine to impose a moratorium on raising tariffs for rail freight traffic for the period of martial law and six months after its termination.
“There was no real discussion between shippers and the carrier about a compromise solution to increase tariffs – we were simply presented with a fact. When Ukrzaliznytsia announced the discussion of raising tariffs by 70%, the order to increase tariffs had already been signed. We had specific proposals: to introduce a moratorium for the period of martial law and six months after it on the increase in tariffs within the borders of Ukraine, and all related services,” Liudmyla Kripka, the Executive Director of the Ukrcement Association, said at a press conference at the Interfax-Ukraine agency on Thursday.
According to her, Ukrzaliznytsia did not take into account the transportation of raw materials, coal, fillers in the infrastructure component of transportation, and did not include the tariff distance, which is why the cost of the final product will increase more significantly than in the carrier’s forecast.
“The impact on the cost of the final product will be much higher than presented by Ukrzaliznytsia. On the example of cement: for us, the main raw material is limestone, and there the highest figure is 55%. Other industries fell into the values of 0-13%,” she said.
In addition, from August 1, the calculation for the use of wagons will be changed to the actual one instead of the planned one, which will also increase the costs of shippers due to delays in border crossings, the expert noted.
Oleh Misiuk, a representative of the Ukrainian Lime Industry Association, pointed out that the decision to raise tariffs would have a significant impact on the lime market, which is already undergoing a significant decline in production volumes.
“Before the war, the cost of delivery from the west of Ukraine to Dnipro was UAH 400 per tonne, now it is UAH 650. With a producer price of up to UAH 300/tonne, the consumer overpays another UAH 200-250 from July 1. In general, lime production has fallen from the pre-war 1.2 million tonnes per month to 350,000 tonnes in May-June. The decision of Ukrzaliznytsia to increase tariffs will hit the market even harder, we expect a fall by another 30-40%,” he said.

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UKRZALIZNYTSIA MAINTAINS GRAIN EXPORT VOLUMES AT LEVEL OF MAY IN JUNE

JSC Ukrzaliznytsia exported 804,900 tonnes of grain cargo in June 2022, which is approximately the same as last month (807,000 tonnes), Deputy Director of the Department of Commercial Work at Ukrzaliznytsia Valeriy Tkachev said on Facebook during online meetings with industry representatives on Thursday.
In particular, 639,900 tonnes of grain were transported through land border crossings on the western border, and 165,000 tonnes were delivered to ports.
Tkachev specified that in June 2022, Ukrzaliznytsia loaded 1.23 million tonnes of grain into wagons, which is 14% of the total loaded volume of 8.57 million tonnes.
At the same time, the volume of transportation of grain cargo amounted to 1.36 million tonnes in June, which is 10.5% more than the volume of loading for this period.
According to Tkachev, the volume of average daily loading into wagons in June amounted to 38,000 tonnes. This figure tends to decrease on weekends: if on weekdays 50,000-70,000 tonnes are loaded into Ukrzaliznytsia wagons, then on weekends – an average of 26,000 tonnes.

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WORLD BANK MAY ALLOCATE $200 MLN TO UKRZALIZNYTSIA TO DEVELOP GRAIN EXPORT CAPACITY

The World Bank may allocate $200 million to Ukrzaliznytsia (UZ) for the development of grain export capacity, Alexander Kamyshin, the head of the board of UZ, announced such a preliminary agreement. “We have tentatively agreed with the World Bank on $200 million in funding for our projects to develop grain export capacity,” he wrote in a telegram on Tuesday following the results of the Ukraine Recovery Conference in Lugano (Switzerland).
Earlier, on the sidelines of the conference, Kamyshin clarified to the Interfax-Ukraine agency that Ukrzaliznytsia failed to increase grain exports in June due to existing logistical restrictions.
As reported, Ukraine exported 1.41 million tons of grain crops in June 2022 compared to 1.2 million tons in May. At the same time, exports through the ports before the war of grain crops amounted to 4-5 million tons.

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UKRZALIZNYTSIA WANTS TO RECEIVE GENERAL ELECTRIC LOCOMOTIVES

JSC Ukrzaliznytsia plans to receive 40 General Electric locomotives, engines for locomotives, etc. under the Lend-Lease program, Head of Ukrzaliznytsia Oleksandr Kamyshin has said.
At the same time, with the beginning of the active phase of the war unleashed by Russia against Ukraine, the company managed to keep almost all of its rolling stock, unlike in 2014, when a significant part of the rolling stock remained on the lost territory, Kamyshin said in an interview with Forbes Ukraine.
According to him, in particular, out of 30 GE locomotives, 29 were taken out. The company failed to take one, as it was being serviced in a non-working condition in the Melitopol depot.
The head of Ukrzaliznytsia also said that the company is counting on increased state support, compensation from the Russian Federation and the Lend-Lease program.
“We have shaped a large list [for Lend-Lease]. Of the important, there is a request for 40 GE locomotives worth $250 million, engines for the modernization of our other locomotives, special vehicles for infrastructure restoration, and so on. Further, this list is approved by the working group. Let’s see what we can get it,” Kamyshin said.
He also said that now is not the time to raise passenger tariffs, but the compensation mechanism from the state still needs to be improved. At the same time, regarding tariffs for freight transportation, according to Kamyshin, the dialogue in the government is still ongoing.
The head of Ukrzaliznytsia also said that the operating gap in the company today is UAH 2-3 billion per month, and if the ports do not open, the company will not be able to close it on its own.
“We received a support program for UAH 10 billion from the state budget. It ended in May. Now we are talking about the second round of state financing before the end of the year. It will be bigger,” Kamyshin said.
He said that in the first days of the war, the daily load on the railway was reduced from 700,000 tonnes to 150,000 tonnes. In March, Ukrzaliznytsia transported 257,000 tonnes per day, in April – 295,000 tonnes per day, the company ended May with volumes of 300,000 tonnes per day.

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