EU sanctions on Russia impact Estonia: ‘rail might disappear’

Image: Wikimedia Commons. Tibukonn

Operail, the Estonian state-owned international transport and logistics company, has halved its freight volumes in the first nine months of 2022. In addition, the decrease in freight volumes has led to the layoff of over 100 employees, as the company underlined. The company has pointed out that this decline is strongly connected to the EU sanctions applied to Russia after its invasion of Ukraine.

The company claimed that its rail freight volumes in Estonia and Finland only amounted to 5,2 million tonnes, between January and November 2022. This trend signals a 48 per cent decrease in volume compared to the same period in 2021. Moreover, because of the effects of the sanctions, the company has lost around 13 million euros in operating income compared to the same timeframe last year.

Domestic traffic and wagon rental are growing, but it is not enough

According to Operail, the downward trend is caused by the halting of the transit of Russian fertilisers and Belarusian oil products via Estonia. The story is significantly different when it comes Estonian domestic traffic.

“Intra-Estonian multimodal transports have shown strong growth in the first nine months of the year: 52 per cent higher compared to the same period last year”, highlighted Operail. In addition, the Estonian company is trying to make ends meet through its wagon rental business.

Without high transit volumes, rail in Estonia might disappear

Raul Toomsalu, chairman of Operail’s board, underlined that large transit volumes were a key factor in financing the Estonian railway infrastructure. With transit volumes decreasing, the weight of maintaining the infrastructure would fall on the shoulders of smaller, more local companies.

Toomsalu commented that “if local goods have to pay for the maintenance of the entire railway in the future, then these goods will move to the road due to the price, and the future of the railway as the safest and most environmentally friendly mode of transport in Estonia is in serious danger of disappearing”.

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Author: Marco Raimondi

Marco Raimondi is an editor of RailFreight.com, the online magazine for rail freight professionals.

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