Why do Ukrainian railcar manufacturing plants stand idle, while “Ukrzaliznytsia” claims a shortage of grain carriers?
Ukraine has exported 43,8 million tons of grain, grown in the last marketing year, out of 66 million tons to the foreign markets. Although these are record-breaking figures for our country, agrarians expect that they will grow gradually if existing rates are going to be sustained. According to the Ukrainian Grain Association, the corn yield is forecast at 100 million tons by 2022, and thus export may increase to 70 million tons.
However, these bright prospects may fail unless actions are taken to modernize a logistics infrastructure.
According to the research of the World Bank, Logistics Performance Index, in 2016 Ukraine took the 80th place among 160 countries, going down by 19 points since 2014.
Our logistics is highly inefficient. The expenses of Ukrainian agrarians for transporting grain to ports are 40% higher than similar ones of French and German agrarians and almost are 30% higher than those of the USA agrarians are.
Ukrainian agrarians’ losses in logistics of 30-million-ton exported wheat and maize were estimated by the representatives of the World Bank from $600 million to $1,6 billion.
I am not going to enumerate all bottleneck problems of agrarian logistics; I will dwell on one issue: how officials are trying to reduce an acute shortage of grain carriers in our country.
In August 2017, “Ukrzaliznytsia” (UZ) implemented an automated distribution system of railcars in order to rule out the element of corruption, make a process of railcar distribution transparent and thus eliminate the shortage of cars.
An idea is, in fact, a good one, however, in practice, it has appeared to be one-sided and incomplete, as it has not solved the main problem – a shortage of grain carriers.
According to our estimates, during the peak period from July to December, business lacked about 3 000 railcars for the transportation of grain to elevators and ports.
As of 20 December 2017, the inventory rolling stock of UZ totalled 10534 units, 946 railcars are under the control of “Stryiskyi Car Repair Plant” PJSC “Ukrzaliznytsia” and 6771 railcars are under private control (unofficial data).
It is important to stress that the majority of grain carriers of the inventory rolling stock of UZ are with a service life limit of nearly 30 years and should have been withdrawn from use a long time ago, as they not only endanger the safety of people but also do harm to the railway infrastructure in the whole.
The stock needs modernizing and new railcars should be manufactured. However, “Ukrzaliznytsia” officials are not interested in the agrarians’ forecasts, judging from the fact that there is no funding provided for manufacturing new grain carriers in 2018. Apparently, UZ will solve a shortage of railcars by continuing a pernicious practice of prolonging the service life of railcars”, states the expert.
As far as “Ukrzaliznytsia” neither publicly discloses the number of grain carriers that it operates, nor reports on the number of railcars withdrawn from use, let us have a look at the statistics of the specialized resource “Promgruz”, where it is indicated that 1266 hoppers-grain carriers are registered and 267 are withdrawn from use in Ukraine during 2017.
The very few are withdrawn, as we can see, the majority of registered grain carriers are not newly manufactured, they are imported by private carriers and withdrawn from use in Russia with a prolonged service life by UZ for 5-7 years in order to be used in the territory of Ukraine.
In such a way, “Ukrzaliznytsia” and the Ministry of Infrastructure of Ukraine take on-the-spot decisions about an issue of an acute shortage of freight railcars in the whole and grain carriers, in particular.
However, there are several railcar manufacturing plants in Ukraine, the management of which fights for the staff retention every day under the conditions of chronically low production workload.
With such “forward-looking and long-run” support of national machine engineering, we will soon lose completely skilled workforce, who massively leave Ukraine, and we will ourselves bury an industry, which brought Ukraine nearly $3 billion, and that is just from the export of railcars, in 2010-2011.
Since January of this year, manufacturing companies of AIC started to examine the possibility of creating their own rolling stocks of grain carriers. Also, traders who build their own logistics chain for harvesting, transportation and storage of grain became more active. The motivation is common: there is no time, no strength and no resources to wait.
Nowadays, national railcar manufacturing plants produce several models of grain carriers, among which there is a hopper model 19-9945 that is used for transportation of bulk goods, which require protection from atmosphere precipitations, on main lines, with a capacity of 100 cbm, carrying capacity of 70,5 ton, grain carriers with a body cubic capacity of 116 and 120 sq.m.
I will not dwell on technical characteristics of railcars but will mention that while selecting a grain carrier by capacity and carrying capacity, it is important to take into account the fact that the majority of elevators, operating in the country, have not been modernized yet.
They have low-traffic capacity; structural properties of old elevators cannot accept railcars, the cubic capacity of which is more than 100 cbm.
Unfortunately, inefficiency and shortsightedness of specialized officials pose a threat nowadays to the future of the mechanical engineering industry.
By financing the manufacturing of new railcars and modernizing the logistic infrastructure, they will be able to not only hold hundreds of positions for Ukrainians but also stimulate the production development and thus an increase in contributions to all levels of the state budget.