Cooperation between the agricultural sector and Ukrzaliznytsia continues to cause concern in business

Cooperation between the agricultural sector and Ukrzaliznytsia continues to cause concern in business. Despite the fact that in 2022-2023, farmers had virtually no alternative to rail transportation, today the situation is changing. However, the quality of Ukrzaliznytsia's services remains unsatisfactory, and tariffs are increasing.

According to Oleg Khomenko, the general director of the Ukrainian Agrarian Business Club (UKAB), due to the occupation of part of the territories, the volume of agricultural production has significantly decreased. Even in the most productive years, the total volume of agricultural products transported is unlikely to exceed 65 million tons.

According to Khomenko, Ukrzaliznytsia must take into account the decrease in demand for its services and adapt tariffs in accordance with economic realities. However, instead, the company plans another price increase without a real improvement in service.

Among the main problems of cooperation between the agricultural sector and Ukrzaliznytsia, the business highlights:
- Low transportation speed - the average speed of wagons is only 50 km per day. This means that the delivery of cargo from an elevator in the Chernihiv region to a port in the Odessa region can take up to 11 days, which significantly increases farmers' costs.
- Lack of effective GPS tracking, which complicates control over the movement of wagons.
- Subsidizing passenger transportation at the expense of freight - the business is forced to compensate for the unprofitability of passenger routes.
- Low level of technological development, which limits the efficiency of logistics.

According to Khomenko, the key problem lies in the monopoly position of Ukrzaliznytsia, which dictates market conditions. One of the possible solutions could be the division of the company into three independent areas: passenger transportation, infrastructure and freight transportation.

If the situation does not change, farmers will more actively develop alternative methods of transporting products. Today, businesses are already starting to use their own wagons, and in the event of a further increase in tariffs without improving service, they may completely reorient themselves to automobile logistics. According to Khomenko, Ukrzaliznytsia has a chance to remain competitive if it invests in digitalization of processes, artificial intelligence, and effective management of the wagon fleet.