News / Ukrainian counter invasion adds to pressure on Russian rail freight services

© Christopher Rawlins

Ukraine’s unexpected counter invasion has put further strain on Russia’s rail freight sector, which continues to lose ground as European shippers seek alternative capacity for Chinese exports.

Russian Railways (RZD) is now reportedly rejecting freight services from Belarus, after an influx of Russian soldiers by train into Kursk – part of which has been occupied by Ukrainian forces – led to congestion on tracks and overcrowding at stations.

Local reports, citing the Union of Belarusian Railroad Workers, claim RZD issued an urgent request to the Belarus authorities to halt dispatch of further freight services to Russia.

And there are suggestions that the Russian government is uncertain how to resolve the issues thrown up by the Ukrainian incursion.

One source on social media noted that because of Russia’s digitalised rail operation, once anyone had access to any station’s system they had “access to the entire network”.

Given Russia is using its rail network to rapidly move troops to cut off further territorial gains by Ukrainian forces, the implication is that the network – also a lifeline for goods flows from China – could face further troubles. It is already steadily losing ground to China-Europe shipments going via the Caspian Sea.

This year, these services have seen a 1,400% year-on-year increase in container volumes, with Azerbaijan, Georgia and Kazakhstan promoting the route and helping develop infrastructure.

And in recent months, rates on these routes have risen between 25% and 50%, as shippers seek to avoid the chaos embroiling Red Sea box shipping routes.

However, one source told The Loadstar it was important to bear in mind that rail freight remained vulnerable to shipping rate volatility, noting that “when ocean freight rates start to fall, so too will the volume of goods moving by rail”.