Russian Railways hikes freight rates by 11%, but not for all cargo

The Russian government has adjusted its rail freight rates per 1 June 2022. Based on the existing rate, the price goes up by 11 per cent. A three-month transitional period applies. This was reported by our sister publication RailFreight.cn.

There are certain exceptions to the price hike. Domestic transport of food, as well as the transport of mineral construction products and imported consumer goods are not affected. However, the price reduction for the export of hard coal will be suspended and thus, the full rate applies for this category. The federal government may add another 3-month transition period if needed..

Predictions became reality

Late last year, the Russian government approved the 2022-2024 investment plan for Russian Railways. In response to the investment deficit caused by inflation and rising industrial raw material prices, rail freight prices will increase by 6% in 2022, followed by 6.6% and 6.1% respectively in the next two years.

Russia’s “Gazette” learned from industry executives that the increase in container transit freight rates may exceed about 5% on this basis, reaching 11%. Now this prediction has become a reality, which means that transportation companies will have to bear this part of the difference.

Increased Russia-China trade

Since the Ukrainian war, Russia is increasingly turning its attention to trade with China, as it is subjected to sanctions from Europe and the United States. According to data released by the General Administration of Customs of China, the trade volume between China and Russia in the first three months of 2022 was US$38.2 billion, a year-on-year increase of 28.7%.

Experts predict that the trade volume between the two countries may still exceed 1 trillion yuan this year. It remains to be seen whether this price increase will hedge against the impact of the current political situation, the slow-down of Sino-Russian trade and further reduce the attractiveness of the China-Europe freight train through Russia.

Author: Huilin Shi

Huilin Shi is the editor of RailFreight.cn, our Chinese publication

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