Russian Railways Offers To Accelerate Delivery Of Goods For Additional Fee

The Russian Railways has been prohibited from avoiding penalties for delays, meaning that it will no longer be able to impose on clients agreements for “increasing the period of delivery of goods. "However, the railway monopoly has found a way out of this situation: it is now proposing additional payments for timely deliveries, the Vedomosti publication writes.

In March last year, the Russian Railways required its customers to conclude with it agreements for "increasing the period of delivery of goods" as a requirement for transportation of goods. Freighters complained to the Federal Antimonopoly Service (FAS) and the FAS ordered the Russian Railways to cancel this requirement because it amounted to abuse of its position as a monopoly on the market.

Representatives of two freight companies have told Vedomosti that the Russian Railways now proposes concluding agreements for "integrated transport and logistics services" (KTLO), under which customers will have to pay USD 3 in addition to the tariff for every ton of cargo transported. The representatives did not disclose the nature of the "service" stipulated in the agreement, but they said that the speed of delivery increases significantly under a KTLO agreement.

“USD per ton constitutes 5% of the average cost of transporting mining and metallurgical goods, 3% of the average cost of transporting crude oil, and 8-10% of the average cost of transporting coal,” said the Infoline Analyst agency’s General Director Mikhail Burmistrov. “It is strange that freighters have not complained to the FAS, since this amounts to discriminatory access to infrastructure.”

A representative of the Russian Railways insisted that this was lawful because KTLO agreements are offered to clients and not imposed on them.

As reported, the FAS’ head Igor Artemyev said in late July that the Russian Railways was a "typical Soviet monopoly" and a "second, railway Gazprom," adding that rail transport tariffs in Russia were among the highest in the world. The Russian Railways’ President Vladimir Yakunin described the claims by the FAS as "unsubstantiated."