The Russian rail freight industry is not happy with the new priority rules. They are too complex, opaque and are making it impossible for business to plan logistics and investments. On top of that, RZD is reportedly also forcing unfavourable deals onto operators in the excess wagon question.
The priority rules on the Russian network determine which type of freight gets to go first on the network when there is not enough capacity for everyone. The Kremlin suspended the rules early on during its war campaign against Ukraine. As a result, RZD essentially had free reign in deciding which goods to transport with priority.
After what seems to be some behind-the-scenes political tug-of-war, Russia has come up with a new priority list. It entered into force on 1 January.
“Like reading coffee grounds”
However, the new prioritisation has failed to provide clarity to freight businesses. Moving goods via rail has become “like reading coffee grounds”, say Russian media. For example, coal for export takes 11th place on the list. When it is prioritised by presidential decree, it comes in third place. Clear enough, it seems.
But what happens when the coal is also subsidised and is supposed to come in fifth place? Or if it is supposed to be used for urban engineering and should come in sixth place? How prioritisation takes shape in those cases remains unclear for Russian businesses – and those are the unanswered questions for only coal.
The ranking system for freight is too complex. Customers are struggling to understand the new rules and how they impact their shipments. Consequently, they complain that it has become a lot more difficult to plan logistical operations and investment decisions. A RailFreight.com source explains that these rules will not have a big effect on China – Europe traffic, and that the situation is mostly difficult for Russian companies.
RZD imposes its will on other operators
The priority rules are not the only issue currently plaguing the relationship between RZD and users of the rail network. Russian Railways is concerned about the excess amount of wagons – of which there are now 400,00 and which reduce capacity on the network. The company is looking for ways to reduce that number, but RZD’s methods are now making other operators rather wary.
RZD has been presenting agreement texts to wagon operators, which “seem unfinished from the legal perspective”, according to Russian media. “The contracts stipulate that the operators must agree with Russian Railways on the volume of the fleet needed to export their freight base, send all other wagons to storage, and give Russian Railways the right to evacuate an unused wagon if it finds one.”
At the same time, Russian media sources say that the proposed agreement contains nothing about the operator’s rights. RZD is only imposing obligations, and is not taking on any itself. The agreements are supposedly “enslaving” for operators. Signing the agreement is reportedly not mandatory, but Russian Railways has many tools to influence those who do not sign them.