How war and sanctions are hiding Russian rail logistics

It is noted that during 2024, Russian Railways transported 1.18 billion tons of cargo, which is 4.1% less than in 2023.

This is the lowest figure since 2009, when the aggressor country was trying to recover from the shock of the global financial crisis.

Even during the pandemic in 2020, rail freight volumes in Russia continued to grow.

According to the publication's journalists, usually the volumes of industrial production and railway freight transportation are closely related to each other.

However, currently in Russia, despite the growth of industrial production, rail transportation continues to decline.

According to interlocutors from the Russian railway logistics sector, among the key problems that led to the reduction in transportation are the lack of network capacity in the east, sanctions, labor shortages, and reduced investment.

One of the interlocutors noted that among the most important problems are limited access to components due to Western sanctions and a shortage of personnel in locomotive crews.

"Everyone went either to special operations or to the defense industry, and there's simply no one to drive the trains," the interlocutor explains.

Another interlocutor emphasized that the criminal war that the Kremlin is waging against Ukraine is affecting the reduction in freight traffic.

The system used to work perfectly, but everything has changed — cargo is going east, now priority is given to defense, and the railways simply can't cope," the source explains.

What problems did the railways of the aggressor country face?

It is noted that this year, Russian Railways has faced a huge increase in lending rates as the Central Bank has raised the cost of borrowing in an attempt to curb soaring inflation.

This led to the company being forced to reduce investments by 40%.

According to one of the interlocutors, Russian Railways failed to meet its target figures for transportation volumes on the Baikal-Amur Mainline and the Trans-Siberian Railway, which are currently being expanded.

During 2024, Russian Railways transported about 150 million tons along these eastern routes, which is less than the planned 162 million tons.

In addition, the coal industry is under severe pressure.

Washington has imposed sanctions on most of Russia's largest coal companies, including SUEK and Mechel. After the US, EU and UK imposed bans on coal imports from Russia, more than 80% of its exports now go to Asia.

Exports fell 6% last year under pressure from Western sanctions, infrastructure failures and profitability problems, the International Energy Agency said.

The coal industry is experiencing particular difficulties today due to falling prices and the inability to export coal to markets in full, emphasized the head of the Russian Ministry of Energy, Alexander Novak.