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Dec 12, 2018

Oleg Belozerov: Russian Railways sets record in freight turnover

The Board of OJSC Russian Railways held its final meeting of the year in Moscow on 11 December 2018.

The meeting was attended by Russia’s Deputy Prime Minister Maxim Akimov, the Deputy Minister of Transport of the Russian Federation Vladimir Tokarev, representatives of federal and regional authorities, business, scientific and transport organisations, and senior managers of the RZD Holding.

Speaking about the results in 2018, and in general in the 15 years since the Holding was founded in 2003, Oleg Belozerov, the CEO and Chairman of the Board of Russian Railways, noted that the Company’s employees had set a new absolute record in terms of traffic volume. Compared to the peak level the Company’s predecessor achieved during the Soviet period, which was reached in 1988, freight turnover has increased by 2.5%, while the proportion of rail transport (excluding specialised pipelines) in the freight turnover of Russia’s country’s transport system approached 88%, which is the highest figure for 15 years.

"We have achieved these positive results thanks to our systematic work to improve the technology of the transportation process and improve production performance. Over the last 15 years, for example, the speed of freight delivery has increased by more than 54%," noted Oleg Belozerov.

According to Belozerov, freight turnover this year will increase by 4%, loading volumes by 2.2% and export shipments through Russian ports by 4.1%, with the volume almost doubling in the last 15 years.

At the same time, Russia"s role as an integrator on the Eurasian transport market is growing: since 2004, transit container traffic has increased by 2.5 times. In 2018 alone, growth was 25%.

Speaking about the results of passenger traffic, the CEO of the Board of Russian Railways noted that the Company had achieved stable growth in all segments and that by the end of the year, more than 1.15 billion passengers will have travelled by rail, an increase of 3.1% compared to 2017.

"The growth in new passenger segments, which we have been offering and developing for the last three years, is particularly indicative. Transportation by our Lastochka trains has increased by 1.5 times in long-distance traffic and by one-third in suburban services, while travel on double-decker long-distance trains is up by 37%," said Oleg Belozerov.

The Company is continuing to introduce new services, including for people with limited mobility. Russian Railways now has a round-the-clock escort and assistance service at 537 stations which is used by more than 15,000 passengers with limited mobility every month.

Russian Railways is also further developing electronic services, with passengers now purchasing almost 52% of tickets for long-distance trains on the Internet.

"In 2018, this service became available to commuter passengers through the relevant mobile apps. As a result, the RZD Holding is also the largest online store in Russia today," said the Company CEO.

Russian Railways also continues to focus on optimising ​​costs. Over the past three years, the volume of optimisation measures exceeded 210 billion roubles, including 44 billion roubles in 2018. This has allowed the Company to keep the growth in unit costs at 1%, which is significantly lower than Russia’s annual average inflation rate.

"An investment programme was formed and implemented in 2018 after taking into account the results of cost reductions. The programme’s investment volume was increased by almost 10% and reached 547 billion roubles," said Oleg Belozerov.

The Company is Russia’s absolute leader in terms of purchases from small and medium-sized businesses (SMEs) and accounts for 10% of the total. At the same time, over the last three years, the list of goods, work and services purchased from SMEs has increased from 254 to more than 17,000 items. The volume of purchases of innovative and high-tech products is also constantly increasing and doubled in 2018.

The measures implemented enabled wages to be indexed and facilitated an increase in labour productivity of 6.5% in 2018 and of almost 52% over the past seven years.

"The average monthly wage will increase by 8.9% compared to 2017 and according to the expected data will amount to almost 55,000 roubles. Real wages will grow by 6%. The Company’s commitment to meeting its social obligations under the collective agreement is a firm rule in our daily activities," stressed Oleg Belozerov.

Russian Railways owns shares and stakes in 128 enterprises, including 64 subsidiaries, and is the founder of 416 non-governmental health care and educational institutions. The companies in the Holding employ almost 1 million people, including private health and education institutions.

OJSC Russian Railways is a world leader in traffic safety, energy efficiency and environmental protection. The Company ranks third in the world in terms of freight turnover, fifth in terms of passenger turnover, and third in the speed of freight movement.

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