Cost of rail logistics in Europe up by 30%-40% due to growth of lease rates for grain trains in Nov - Ukrainian brokers

MOSCOW. Nov 16 (Interfax) - The growth of lease rates for grain trains in November 2023 has led to a 30%-40% increase in the cost of rail logistics in Europe as compared to October, making transportation by road a better bargain now, Ukrainian media outlets said, citing information circulated by the Spike Brokers brokerage on social media.

"Steps by Ukrzaliznytsia [Ukrainian Railways] to also raise its rail car lease rents for private owners that were accepted by the same forwarding agents through public auctions increased the cost of transportation by 30%-40% as compared to what they were in October. Furthermore, the reduction of the speed of rail cars' movement has made transportation by road a better bargain even over the distances from the Chernigov region to the Odessa ports," the company's analysists said.

A total of 487 agricultural cargo rail cars on average have been crossing from Ukraine into Europe per day this month, the brokerage said.

"The small flow of goods delivered by rail cars remains at the border crossings with Romania and Poland. In November, the average daily amount of cargo traffic through these crossings stood at 125 cars a day, respectively," it said.

As of November 15, market rates for transportation by rail from the Kharkov region to the Danube ports of Ukraine stood at $52-$60 per tonne, from the Lvov region to the border with Poland at $20-$35 per tonne, from the Lvov region to the border with Hungary at $26-$39 per tonne, from the Lvov region to the border with Romania at $26-$47 per tonne, from the Lvov region to Odessa at $41-$46 per tonne, from the Rovno region to the border with Poland at $27-$36 per tonne, and the Rovno region to Odessa at $41-$49 per tonne.