In May, Russia announced a doubling of rail freight tariffs applying to shipments destined for Latvia, Estonia and Finland. At the time, RailFreight.com wrote that this could be seen as a targeted measure against the rail freight operators of these EU member states. Latvia now expresses concern that the tariffs could destroy its rail operations.
“If the tariff policy changes, this is a reality” the Latvian Minister of Communications Rihards Kozlovskis was quoted as saying by Eurasia Daily. “The business moves and is not tied to one place. There’s nothing good about it.”
In addition to Kozlovskis’ comments, Prime Minister Andris Kulbergs commented on Lithuania evading the Russian measure: “It actually splits us. All transit can go to Lithuania. We automatically lose interest in rail transportation. These are almost automatic sanctions against our railway. Then the port suffers, and then everything else along the chain.”
Before Russia’s invasion of Ukraine, Latvia’s rail freight business focused on transit freight coming in from its eastern neighbour. Freight was often transshipped in its Baltic Sea ports. After the introduction of sanctions, many of these flows dried up. This also applied to other countries in the area.
LDz Cargo remains silent
The national rail freight operator LDz Cargo has sought to replace these lost freight volumes by expanding abroad, but the Russian doubling of freight tariffs will hurt the company nevertheless.
LDz is not willing to give an assessment of the (expected) damage. “If I start naming specific figures now, it will be speculation. This directly affects the number of our employees, so I will refrain from assessing the scale of the consequences for now”, said Artis Grinbergs, Chairman of the company’s Management Board.