“Ukrzaliznytsia” changed the terms of auctions for the distribution of wagons
4.10.2022 - 16:50
JSC “Ukrzaliznytsia” took into account the comments of agrarian business, which insisted on changing the principles of conducting auctions for the distribution of grain wagons to “Prozorro. Sales”.
Business demanded the removal of prerequisites for speculative price growth, which occurred in June-September.
UZ expanded the offer of wagons for a longer period of time and changed the parameters of the auctions. Thus, the company made it impossible to participate in auctions of intermediary companies that are not owners of agricultural goods and used auctions to raise prices.
As a result, the average daily car rental rate according to the results of the auctions on October 3 decreased by three times, compared to the results of the previous auctions that took place on September 29 with the participation of intermediary companies. Yuriy Shchuklin, an expert on the logistics market and adviser to the chairman of the board of “Ukrzaliznytsia”, told about it.
“When the state listens and takes into account the proposals of the business community, the laws of the market economy begin to operate, and speculative price bubbles disappear. Undoubtedly, it is a positive precedent that the management of “Ukrzaliznytsia” finally listened to the farmers, and not to the officials, who were constantly reporting on the successful disposal of the wagon fleet and the increase in profitability from the sale of wagons. This happened as a result of the fact, that the new formula of the auction cut off all the intermediaries, who made up 95% of the participants in the previous auctions and came out only for the purpose of warming up the prices,” the expert noted.
The adviser to the chairman of the board of the UZ predicts that if the updated formula of auctions is maintained and the time horizon of wagon lot offers is extended, the wagon rental rate may drop below UAH 2,000 including VAT per day.
The market price for a wagon is UAH 2.2-2.5 thousand including VAT per day. The prices that were above this level were exclusively speculative games, which took place thanks to the creation of the illusion of a shortage of wagons.
“If a bus arrives at a stop and it is not known whether the next one will come, everyone rushes to it. When passengers see the schedule that the next bus arrives every 5 minutes, I assure you: no one will storm the doors and take the standing places. I am sure that if “Ukrzaliznytsia” puts out 5 routes, 250 wagons a hundred days in advance for cargo owners every day, there will be no competition between the participants to raise prices. Under these conditions, and when UZ will no longer put up for auction those offers of wagons where there are no dates of cargo absorption by the port or border crossing, the price level will drop below UAH 2,000 including VAT per day,” predicts Shchuklin.
The speaker emphasized that the elimination of systemic prerequisites for the formation of an artificial shortage in the transport market and the introduction of the possibility of long-term planning will contribute to increasing the efficiency of the resources of the UZ itself. The measures will reduce the costs of the transportation process, increase the predictability of the use of locomotives and locomotive crews, wagons, reduce their shortage for the transportation of specified volumes, as well as increase the throughput and throughput capacity of hub and sorting stations.
