The transport logistics market of Ukraine is going through difficult times. Service companies and forwarders are facing challenges that are likely to continue until late crop harvest begins. Today, forwarding companies that rent rolling stock are experiencing a similar situation, said Olexandr Shatailo, Bulk-Trans, during the Trend&Hedge Clube online meeting on 14 Aug.  

The main reason for such problems is that most agricultural holdings and traders have their own fleets and wagons. This reduces their dependence on the services of third-party companies, which, in turn, negatively affects service companies and the transportation market as a whole.

With the beginning of the war, the narrative about the lack of wagons became a thing of the past. Many manufacturers and agricultural holdings purchased their own wagons, which reduced the demand for Ukrzaliznytsia wagons. However, despite this, Ukrzaliznytsia still conducts auctions for the rental of wagons, although the rates remain relatively low.

O. Shatailo confirms the presence of forward contracts for logistics, which are concluded until April 2025. This allows companies that have their own rolling stock to predict routes and reduce transportation costs. The reason for this is not oversaturation of the market, but a decrease in yield and the desire of companies to be independent from the service market.

“Mobilization also affects the market, especially the availability of drivers. Although the situation is currently stable, driver shortages could become a serious problem during the late crop harvest, which could lead to higher freight rates”, - said the speaker.

As for logistics on the western borders, the situation remains calm for now, but everything could change with the start of processing and an increase in transportation volumes.