Russian Railways’ President Vladimir Yakunin: “The Company has one of the highest
levels of freight turnover in the world”
The Russian Railways’ Board of Directors held an enlarged meeting to discuss
the holding company’s 2012 results. The meeting was attended by representatives
from the Russian government, the State Duma, the Federation Council, the heads of
subjects of the Russian Federation, railway administrations in the CIS, the Baltic
States and other countries from Russia’s “Far Abroad”, as well as
members of the Board of Directors and the Company’s business partners.
The meeting was held at the Company’s head office in Moscow on 17 December
As the Chairman of the Board and President of Russian Railways Vladimir Yakunin
pointed out in his report, the Company increased the amount of traffic it carried
“With the 2.8% growth of Russia’s industrial production in 2012, estimates
are that loading will increase by 2.7% to about 1.2747 billion tons. Freight turnover
in 2012 is expected to reach 2.777 trillion ton-km, which is 2.7% more than in 2011.
The proportion of Russia’s total freight turnover (excluding pipelines) accounted
for by rail transport in the transport system increased to 85.5%. This is one of the
highest rates in the world. The proportion of rail transport in the total freight
turnover of major economies is higher only in China,” said the head of Russian
In 2012, container traffic totalled 3,000,000 Twenty-Foot Equivalent Units (TEUs),
which is almost 11% more than last year. The number of container trains increased
by a factor of 1.2 to 7,500.
However, while Russian Railways achieved a quite significant increase in traffic
volume indicators, the Company’s contribution to Russia’s GDP fell from
1.81% in 2011 to 1.74%.
“This state of affairs demonstrates very graphically that as a result of
the government regulation of tariffs, Russian Railways is seeing an ongoing and significant
reduction of the traffic load on the economy and that conditions are being created
for the development of other sectors of the economy due to the under-funding of country’s
railway infrastructure,” said Vladimir Yakunin.
Since the Company’s foundation in 2003, prices have increased 3.4 times in
industry, 5.5 times in the fuel industry, 3.6 times in the steel industry, but only
2.8 times in rail transport.
During this period, the transport component (in terms of Russian Railways) in iron
has fallen by almost 32%, by 34% in crude oil, by 56% in fuel oil, by 24% in coking
coal and by 17% in grain
According to Vladimir Yakunin, this year saw Russian Railways working in a complex
operational environment. The ongoing rapid increase in the fleets of freight cars
at other operating companies had an adverse material impact on operations.
Currently, more than 1,700 companies own a fleet with a total of more than 1,150,000
wagons. Although freight turnover increase by 6% to the pre-crisis level of 2007,
the wagon fleet has increased by more than 20%. As a result, the fleet has grown 3.5
times faster than the growth in transport operations. Experts estimate that there
is a surplus of about 250,000 wagons.”
“We can see that, without effective action, even the most intensive increase
in capacity will not lead to the required effect until we reach a reasonable level
of rolling stock that meets the real needs for freight transportation,” said
According to Yakunin, following an initiative by the Company, the Russian government
issued a decree according to which Russian Railways leased 106,000 open-box cars from
JSC Federal Freight in 2012. The cars have begun operations and are in use as a multipurpose
Despite the fact that the leased fleet accounts for less than 10% of all the wagons
on the rail network, this measure almost completely resolved the problems of small
and medium-sized customers and facilitated a reduction in the market rates for the
use of wagons.
In addition, to improve the efficiency of freight shipments, the Company this year
developed a Single Network Technological Process which determines the basis for cooperation
between cargo owners, rolling stock operators and carriers.
“The first results of the proposed approach are already visible: we have
substantially raised the accuracy of dispatching freight trains on schedule and are
systematically increasing the number of freight trains operating on a tight timetable.
This is one of the main directions in improving our shipment methods,” said