Russia implements subsidies for transit container trains
In order to stimulate container traffic on the railway network, the Government of Russia has implemented subsidies for local logistics companies. The amount of a state subvention for transporting containers varies from 290 to 860 euros per unit. Another feature of the state subsidies is a higher priority for westbound connections rather than eastbound ones.
On Thursday, 26 August, Prime Minister of Russia Mikhail Mishustin signed a decree on implementing subsidies from the federal budget for stimulating transit container traffic on the country’s railway network. “The decision will increase the demand for freight transit services and will have a positive impact on related sectors of the economy”, the Government of Russia stated.
According to the decree, the new measure concerns the transit railway connections between the Russian seaports in the Pacific, on one side, and the harbours on the Baltic and Black Seas together with the border crossings to Finland, Belarus, Poland and Azerbaijan, on the other side.
The state subsidies for transit transportation are available only for Russian companies. In addition, entities, whose owners are based in tax havens and have a stake of more than 50 per cent, are also excluded from the state funding. As the governmental decree states, the state subsidies, in fact, mean the temporary reduction of track access charges for freight trains that carry transit containers. The mentioned charges could be decreased for the westbound connections as follows:
- up to 38,853 rubles per 20-foot container (around 435 euros);
- up to 58,280 rubles per 30-foot container (around 652 euros);
- up to 77,706 rubles per 40-foot container (around 870 euros).
At the same time, the eastbound connections have another level of reduction:
- up to 25,902 rubles per 20-foot container around 290 euros);
- up to 38,853 rubles per 30-foot container (around 435 euros);
- up to 51,804 rubles per 40-foot container (around 580 euros).
Transit traffic in Russia
It is worth to note that container traffic including transit is growing on the Russian railway network. More than 3.2 million TEUs were transported in January – July of the current year, which is 15 per cent more than the results of the same period in 2019. Most of the containers, or 1.3 million TEU, were domestic traffic. Around 841,000 TEUs were hauled for export while the import was around 672,000 TEUs.
Transit traffic was around 409,000 TEUs in January – July. This category set growth of about 30 per cent. It is the highest rate among all the types of container traffic on the railway network in Russia. The increase for domestic, export and import connections was around 12, 15 and 14 per cent respectively.