Freight Rates Lose Steam

Coal transportation rates drop to their lowest since 2023

The cost of providing railcars for coal shipments has hit its lowest point since early 2023. According to analysts, freight rates fell by nearly 15% in April, leaving no margin for profitability in the operator segment. Experts see limited potential in further reducing already-low port transshipment rates, with the main opportunity lying in discounted tariffs from Russian Railways (RZD) or direct government subsidies. So far, the monopoly has only made concessions to coal companies within the operator segment through its subsidiary, Federal Freight Company.

RZD, citing calculations by the Institute for Transport Economics and Development (IEDT), notes that coal shipments to the east between 2014 and 2024 resulted in losses totaling 428.3 billion rubles. “Additional concessions would lead to unrecoverable losses, which would be especially significant given the company’s heavy debt burden,” the statement said.

The full article is available on the Kommersant newspaper website.