Ukrzaliznytsia has no economic incentives to create artificial shortage of cars — Tkachev

JSC Ukrzaliznytsia has no need to create an artificial shortage of grain cars to manipulate the cost of the car fleet, said Deputy Director of the company’s commercial department Valeriy Tkachev during the Forbes Agro conference in Kyiv on Thursday.

"There are no special measures to create a shortage, because Ukrzaliznytsia’s main earnings come from transportation itself. About 90% of all revenue we receive is from tariffs. The railcar component in the revenue structure is insignificant, so it makes no sense for us to slow the movement of cars to earn small fees for their rental," he said.

Tkachov clarified that the total fleet of private grain cars in Ukraine today is about 20,000 units, while Ukrzaliznytsia’s working fleet numbers only 3,200 cars. According to him, throughout the year the state company’s cars are used only 5% of the time, and demand for them surges only during the peak agricultural export period — October through December.

To stabilize logistics costs, the Ukrzaliznytsia representative recommended that shippers sign long-term contracts with both Ukrzaliznytsia and commercial companies.

Regarding actual logistics costs, Tkachov said that for Ukraine’s average freight distance of 650-700 kilometers, the tariff for grain transportation is $11-12 per tonne. Including the railcar component, which costs $2-3 per tonne eight months of the year and rises to $5-8 only during peak season, average annual railway logistics costs do not exceed $17 per tonne.

Commenting on possible tariff increases, the Ukrzaliznytsia representative noted they are state-regulated.