Agro-Region saves up to 15% on railway logistics and continues to invest in railcars

The Agro-Region group of companies has declined the services of forwarders for the 2023/2024 marketing season.

This was noted by the Deputy Director of Logistics, Mykola Muraviov.

According to him, this decision resulted in an average seasonal savings of 15% in the cost of railway logistics.

“Rejecting the services of forwarders and professionally organizing railway transportation independently is a strategically sound decision for the company. Of course, there are contracts that are essentially ‘today-for-tomorrow,’ which are profitable to fulfill with forwarders when our own railcars are fully engaged, but these are isolated cases that we try to avoid,” stated Mykola Muraviov.

He added that Agro-Region currently operates 100 railcars, including 25 hopper cars received through the USAID Economic Support to Ukraine project grant program.

According to Mykola Muraviov, during the peak of the 2023/2024 season, the company managed up to 500 railcars due to the large corn harvest and uncertainty about the stability of the grain corridor and Black Sea logistics. This led the company to concentrate sales in specific months to minimize risks.

For the 2024/25 season, the plan is more balanced, with sales planned in even parts throughout the year, significantly reducing the need for a large number of railcars.

“The main indicator of the economic efficiency of using railcars is the turnover rate. It is important to organize work so that the railcars spend as little time standing still and as much time moving as possible, making the maximum possible number of turns in a given period. The more turns a railcar makes, the more grain is transported. When it comes to renting railcars, the cost is calculated daily and does not depend on whether the railcar is idle or in constant motion,” added the Deputy Director of Logistics for the Agro-Region group of companies.