Ukrzaliznytsia wants to raise freight tariffs by 40%, business warns of shutdowns

Ukrzaliznytsia plans to carry out another indexation of freight railroad tariffs - by 27% in 2025 and by another 11% from January 1, 2026.

This is reported by the Federation of Transport Employers of Ukraine (FTE), the Ukrainian News agency reports.

The total increase will be more than 40%.

The report says that the relevant decision has already been approved by the company's board and supervisory board, and a draft order is expected to be sent to the Ministry of the Development of Communities, Territories and Infrastructure of Ukraine in the near future.

The Federation warns that continuing the irrational policy of raising tariffs in the profitable freight segment to cover the losses of the passenger segment is a strategically wrong decision.

In its turn, the Federation is aware of the difficult financial situation faced by Ukrzaliznytsia under martial law and emphasizes that the company's cargo segment remains profitable - at the end of 2024, its financial result amounted to about UAH 20 billion.

The main problem of Ukrzaliznytsia is not the level of freight tariffs, but the chronic multibillion-dollar losses of the passenger segment, which for decades have been covered by profits from freight transportation.

It is noted that further tariff increases may have negative consequences for the Ukrainian economy. The cost of rail transportation in Ukraine is already higher than in neighboring EU countries.

Thus, the consequences of the next indexation will lead to the fact that some enterprises will be forced to reduce production and transportation volumes, and some will completely stop their activities; part of the cargo flows will be transferred to road transport, which will lead to an additional burden on road infrastructure, especially regional; export potential, as well as foreign exchange and tax revenues to the budget will decrease.

The Federation is convinced that during martial law, losses from passenger transportation should be covered by the state directly at the expense of budget funds, without additional increase in tariffs for freight transportation, which already remain highly profitable.

As the Ukrainian News agency earlier reported, in mid-December 2024, the Supervisory Board of the joint-stock company Ukrzaliznytsia approved proposals to change state regulated tariffs for cargo transportation by 37%.

According to the Opendatabot service, Ukrzaliznytsia ended 2024 with a loss of UAH 4.2 billion, but this did not prevent Serhii Leshchenko, a member of the Supervisory Board of Ukrzaliznytsia, from receiving almost UAH 3 million in salary last year.

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