Russian railway operators seek government aid for seafood transportation

The Association of Owners of Refrigerated Rolling Stock (AORRS) has contacted Russian Prime Minister Mikhail Mishustin to ask for a discount on railway tariffs to compensate for loss of traffic caused by a recent lockdown order issued by the federal government.

Russian President Vladimir Putin declared a nationwide lockdown seven weeks ago but recently announced an easing of restrictions on movement in the country. Russia has recorded 308,705 coronavirus cases, the world’s second-highest amount after the U.S., and 2,972 deaths as of Wednesday, 20 May, according to the Wall Street Journal.

In a letter to Mishustin, the AORRS head Milkhail Sinev said the spread of COVID-19 and the recent depreciation of the ruble against other major currencies due to a drop in global oil prices have significantly decreased the volumes of seafood transported by rail. This, in its turn, has negatively impacted the business of railway operators, Kommersant reported.

Russian railways function as a public-private enterprise, where railway operators own rolling stock and pay the national railway monopoly, Russian Railways, for usage of tracks and locomotives, according to a set price list. Russia’s seafood companies depend heavily on rail transportation as the bulk of the national catch, harvested in the Far East region, must be transported several thousand kilometers west to Russia’s most populated areas.

Sinev is asking for a 50 percent discount on railway tariffs for deliveries bound to the country’s central regions, as well as seafood bound for border crossings and the port of Vladivostok, the gateway of Russian fish shipments to Asian countries. Alternatively or in addition, Sinev has asked for the elimination of the difference between tariffs for general purpose containers and for reefer containers. At the moment, a delivery by a standard container is up to two-and-a-half times cheaper than by reefer, a disparity causing difficulty for the railway association’s members.

In a separate letter sent by the AORRS to Mishustin, the association asked for an easing of the veterinary control over refrigerated cargo. Currently, cars carrying seafood must be unsealed at various intermediary points along the railway system for quality control checks. Such stops can add four to eight days to transportation times and cost operators an estimated RUB 100 million (USD 1.36 million, EUR 1.26 million) annually, the organization said.

In response, a spokesperson for Russian Railways told Kommersant said the monopoly is willing to consider new proposals on discounts in addition to those currently in place. Though the tariff rates are set by the central government, the Russian Railways plays provides input into its decision.

For their own part, Russia’s seafood companies have criticized insufficient railway infrastructure, lack of rolling stock, flaws in regulation, and market price distortions, they claim have caused an untenable situation, forcing some companies to consider alternative forms of transportation, such as shipping via the North Sea Passage.

Photo courtesy of Matveychuk Anatoliy/Shutterstock