The Ukrzaliznytsia public railway company intends to lower its freight transport tariffs on relatively short routes (up to 500 kilometers) with the aim of taking cargoes away from trucks. Ukrzaliznytsia board member Marek Zalesny announced this in an interview with the Magistral newspaper.
"We will initiate elimination of discrimination on short distances. Historically, we have been losing the competition to trucks on distances up to 500 kilometers. Now, we want to reduce the price of this transport service to the level of the tariffs for transportation by trucks," Zalesny said.
According to him, this will have a positive impact on the conditions of automobile roads because there will be a smaller number of heavy trucks and facilitate improvement of the environment because rail transport is much less harmful to the environment.
According to Pavlo Rudenko, an analyst with CFTS Consulting, freight transportation by rail is losing to trucking on distances of up to 500 kilometers because of the k and kL coefficients that are used to adjusting the cost of transportation.
"Because of the high coefficients on short distances, the cost per ton-kilometer (t-km) on a distance of 100 kilometers is almost two times higher than the cost on a distance of more than 500 kilometers for the same load. Without abolition of these coefficients, cargo transportation by rail will continue to lose the competition with trucks on short distances," Rudenko said.
According to him, Ukrzaliznytsia needs to raise its delivery efficiency, improve its customer focus, and pay attention to high-value cargoes, the competition for which the railways is almost completely losing to trucks.