News / Hard-hit Russian Railways hikes prices to help pay for new locos

Photo: Russian Railways

Russian Railways (RZD) will impose a near-14% tariff hike next month in a bid to offset significant investments over the coming years, including new locomotives.

The state-backed rail operator will raise tariffs by 13.8% from 1 December, and there are reports it will also up its container rates by 5% next year, with rates in Belarus set to rise by the same percentage.

The news comes at an awkward time for Russian rail providers, the country having experienced a massive loss in volumes due to war-induced sanctions.

And, with Russia’s capacity to service locomotives having declined – a loss of engineers to the front line and lubricants supplied by western firms, RZD has been forced into a wave of heavy expenses, not least another order for new locomotives, 500 this time.

Long-term, that may pay off, as RZD is ordering from new suppliers, which will wean it off its former dependence on western firms. However, it will not address the more pressing loss of western volumes, with operators using trans-Caspian routings and enjoying year-on-year surges in container volumes – China-Europe traffic has grown 1,400% this year.

One of the winners from RZD’s decline is Kazakh Railways (KTZ), which announced it had partnered with Azerbaijan to build a new intermodal terminal at the port of Alyat.

“KTZ continues to develop its terminal network abroad in accordance with the instructions of the head of state to strengthen the integration of Kazakhstan into existing international transport routes,” the Kazakh carrier said. “The project will serve to increase the volume of container trains on the China-Europe-China route, reduce delivery times and reduce the cost of transportation and transhipment.”