The agricultural community urges Ukrzaliznytsia to establish clear rules for auctions
26. 07. 24
The agricultural community urges JSC “Ukrzaliznytsia” to establish clear and understandable rules and dates for auctions and the number of wagons offered; to provide the ability to plan transportation across the entire fleet with a lead time of 3 months or more, and to sell the remainder on the spot market. Additionally, they request to automate the process of highlighting bottlenecks in real-time for the entire planning horizon, allowing contracts to be shifted by a few days to avoid downtime due to overload.
Increasing the number of own wagons or taking them on long-term lease is one of the ways to avoid the influence of Ukrzaliznytsia, but this requires time.
“Indeed, private businesses, when possible, invest in wagons, reducing the logistics cost component, which has been the most volatile in recent years,” notes Kateryna Rybachenko, Vice President of UCAB. “As a result, we have a boom in domestic wagon production, which is very encouraging. Moreover, more modern wagons mean better grain quality and fewer losses.”
In turn, Mykola Muravyov, Deputy Director of Logistics for the Agro-Region Group of Companies, points out that in the 2023/2024 season, the cost of Ukrzaliznytsia wagons increased fivefold from 600 UAH without VAT per day during the peak period to 3000 UAH without VAT per day.
“It is also necessary to consider not only the cost of the wagon but also the calculated speeds, which significantly affect the cost of logistics in Ukrzaliznytsia wagons. Based on these speeds, Ukrzaliznytsia calculates the estimated number of days of wagon use per trip. These speeds can change every month. The ‘calculation mathematics’ is only understood by Ukrzaliznytsia and does not always make sense. The slower the wagon moves or ‘crawls,’ the higher the delivery cost,” notes Mykola Muravyov.