Commentary on Train Formation Changes by Ukrzaliznytsia

Ukrzaliznytsia has elaborated on the recent adjustments to the train formation plan. The company stated that these changes were made to optimize the flow of wagons on the Pomichna-Podilsk and Pomichna-Chornomorska routes, ensuring stable operation of traction substations and efficient use of locomotives, while also preventing excessive workloads on locomotive crews.

This information was provided by the company in response to an inquiry from EP.

The statement mentioned that there are restrictions on the intervals for train passage and the supply of electricity on these routes.

Additionally, the existing and potential wagon flow towards Ukraine's largest port – MTP "Pivdenny" was taken into consideration during the decision-making process.

Ukrzaliznytsia also reminded that tariffs for freight transportation by rail within Ukraine should be indexed annually. However, this regulation had not been consistently followed in previous years, and the dynamics of tariff indexing for rail freight lagged significantly behind the price changes for key resources consumed by the railways.

"Notably, since the last revision of freight tariffs, the prices for electricity have risen by 166%, diesel – by 110%, spare parts for diesel locomotives – by 217%, spare parts for electric locomotives – by 22%, bearings – by 37%, solid-rolled wheels – by 20%, etc.," the company stated.

As a result, these factors have hindered Ukrzaliznytsia's ability to sufficiently perform infrastructure and rolling stock repairs, as well as to index salaries for railway workers.

"Meanwhile, private companies have the opportunity to index tariffs by reducing logistics costs, which allows them to meet their social obligations towards workers, including the payment of a 13th salary," Ukrzaliznytsia advised.

It is worth noting:

Recently, PJSC "ArcelorMittal Kryvyi Rih" expressed its "concern" regarding changes made by Ukrzaliznytsia to the train formation plan and the corresponding increase in tariff distance.

"We are extremely concerned about the change in the train formation plan by Ukrzaliznytsia effective from April 5, 2025, which has led to an increase in the tariff distance for trains carrying our products by 257 km, resulting in a significant rise in production costs."

"We consider this route change by the state monopoly Ukrzaliznytsia to be artificial and unfounded," the company stated.

Changes in the tariff distance to the Odesa commercial sea port are viewed by "ArcelorMittal Kryvyi Rih" as "artificial and selective" and "do not rule out the possibility of deliberate economic pressure on ArcelorMittal Kryvyi Rih."