Ukrainian Railways (UZ) wants to raise its rail fees. In late 2024, the company proposed a hike of 37%. Businesses, including the American Chamber of Commerce in Ukraine (AmCham), responded negatively to that proposal. Now, UZ seems to be tired of their opposition and insists it needs the tariff hike.
Gebhard Hafer, president of UZ’s supervisory board, took to LinkedIn to issue an appeal to shipping companies and AmCham. “Maersk, CMA CGM, MSC, American Chamber of Commerce in Ukraine! Stop blocking the current request of JSC Ukrainian Railways on indexation of cargo tariffs!”, Hafer wrote.
The shipping companies have not spoken out publicly against the desired tariff increase. However, Hafer’s comments on LinkedIn suggest that they may have done so behind the scenes. By contrast, AmCham has openly criticised UZ’s proposal, saying that it may affect the country’s competitiveness and economy. UZ should directly involve the business community in making tariff-related decisions, the American organisation argued.
Counterarguments
In order to counteract the international pressure on UZ, Gebhard Hafer justifies the company’s tariff plans in his LinkedIn post. “Ukrainian Railways hasn’t indexed the cargo tariffs for more than two years already. The request is justified by the current industrial inflation rate in Ukraine, measured by the Producer Price Index (PPI), and by investment needs into infrastructure and rolling stocks. By blocking the indexation of cargo tariffs, the safety of railway transportation in Ukraine is affected!”
Ukrainian Railways proposed an across the board 37% tariff hike in December 2024. Nearly half a year has passed since then without an implementation of the plan. The latest update was that the country’s government looked to approve a tariff hike anywhere between 20% and 40%.
Now, the UZ supervisory board president seems to clarify on LinkedIn why the tariff hike is taking a while to get approval: Namely, businesses are blocking it. “The request for indexation of cargo tariffs was formulated and carefully justified by UZ in 2024 already. Since then it has been blocked by container lines, business associations and a couple of industries”, Hafer stated.
Rate change for containers?
Another tariff hike may also be coming to Ukraine, in addition to the proposed 37% increase. Hafer mentioned a specific outstanding request to increase the transportation rate for containers exceeding a weight of 26 tonnes and 30 tonnes. That idea “follows complaints from grain hopper wagon operators about cheaper container rates for transportation of grain and other bulk commodities.”