The plans of the state railway company Ukrzaliznytsia to increase freight tariffs by 27% from January 1, 2026, are provoking strong reactions from the business community, especially in the agricultural sector, but also concerns about the future of logistics flows that are essential for the Ukrainian economy and the war effort.
Both farmers’ organizations and industry representatives warn that the increase in rail transport costs could make many activities unprofitable and accelerate the shift of freight transport to road, with negative effects on infrastructure, the environment, and safety.
Agriculture: “a hidden additional tax”
The Ukrainian Agrarian Council (UAC) believes that the increase in rail tariffs is, in practice, equivalent to a new tax on farmers.
“For farmers, the increase in Ukrzaliznytsia’s tariffs is essentially a kind of additional tax,” said Mihail Sokolov, vice president of the UAC, at the Doing Agribusiness in Ukraine conference.
According to him, domestic prices for agricultural products are closely linked to export parity, and logistics costs are deducted directly from the final price charged to producers. Under these conditions, any increase in rail transport costs immediately reduces the competitiveness of Ukrainian agriculture on foreign markets.
Sokolov particularly criticized the continuation of cross-subsidization, whereby some types of cargo are transported below cost, while others — especially agricultural products — are subject to higher tariffs, even though grain transportation was already profitable for the railway company.
Risk of massive shift of cargo to road transport
The UAC warns that tariff imbalances could have a structural effect on Ukraine’s logistics.
“We may end up in a situation where half or even more of agricultural products are transported by road.
This will affect Ukrzaliznytsia, the state, and the agricultural sector alike,” Sokolov said.
Such a development would put additional pressure on road infrastructure, increase maintenance costs, and contradict the sustainability and efficiency objectives of the transport system.
Government: tariff increase is inevitable
Authorities in Kiev admit that the increase in rail transport costs cannot be avoided, given that the rail network is constantly affected by Russian attacks and operating costs have risen significantly.
A deputy economy minister quoted by Reuters said that fare indexation is inevitable, but stressed the need for a “consensus-based” process.
For his part, Oleksandr Pertsovschi, general director of Ukralizniția, previously stated that the fare increase is part of a financial recovery plan designed to help the company manage the debts accumulated due to war damage and declining freight volumes.
Railways, the backbone of Ukraine’s logistics
Despite the pressure, rail transport remains essential to the Ukrainian economy, ensuring the movement of grain, energy equipment, heavy machinery, and special transports needed for infrastructure and defense.
However, the increase in tariffs could hit these critical flows at a time when the European Union is investing heavily in alternative corridors to maintain logistical links with Ukraine.
The EU is investing in alternative road routes
In parallel with the pressure on the railways, the European Union is strengthening road access routes to Ukraine through the Solidarity Lanes initiative. Since its launch in 2022, the EU has invested over 2.3 billion EUR in freight transport infrastructure, including at key border points such as Yahodyn (Poland).
The new investments are aimed at increasing capacity for heavy trucks, generators, fuel, construction materials, and military equipment, as maritime routes remain vulnerable.
A fragile balance between costs and security
These three developments — financial pressure on Ukralizniția, farmers’ opposition to higher rail freight costs, and EU investment in road routes — highlight the delicate balance between maintaining vital logistics flows and the rising costs of transport in a country at war.
Share on:
