The cost of grain transportation is growing again

Against the background of the current record harvest of grain and oilseeds in Ukraine, Ukrzaliznytsia is again raising tariffs for services, which will lead to a further increase in the cost of road transportation.

In the previous season,after reducing tariffs for rail transportation to the level of 0.7-0.8 UAH/km, the cost of road transportation decreased to 1-1.2 UAH/km, which reduced the profitability of carriers. But after the Cabinet of ministers in August replaced the head of Ukrzaliznytsia and approved an increase in tariffs, the cost of logistics again increased sharply. The tariff for transportation of iron ore from 01.09.21 increased by 8%, and from 01.01.22 it will increase by another 20.4%. The tariff for transportation of agricultural products has increased by 8% since 01.09.21, and will increase by another 6% since 01.01.22.

Ukrzaliznytsia has decided to increase the cost of using its railcars since October, which will lead to another jump in transportation tariffs, although many carriers already have their own car fleet.

According to the CTL, starting from October, the rates for using railcars will change as follows::

• grain carriers, wagons for flour transportation – will increase from 1000 UAH/day to 1200 UAH/day,
• fitting platforms – will grow from 485 UAH / day to 585 UAH/day,
• universal platforms – will decrease from 687 UAH/day to 587 UAH/day.

The use of cement trucks, pellet trucks, and covered wagons will also become more expensive.

In general, the cost of rail transportation has already increased by 20-30%, and road transportation – up to 1.6-2.2 UAH/km.

According to the state statistics service of Ukraine, in the first 8 months, the volume of transportation of grain and its processed products decreased by 16.3% to 18 million tons compared to the same period in 2020, while the volume of transportation of chemical and mineral fertilizers increased by 13.3% to 6.6 million tons.

In general, in January – August, 201.7 million tons of cargo were transported by rail to Ukraine, which is 2.6% higher than last year's figure.