The monthly planning system of Ukrzaliznytsia paralyzes the sales of farmers

The planning system applied by Ukrzaliznytsia with a one-month horizon for grain export transportation makes it impossible for farmers to fulfill export contracts in good faith and, ultimately, will have a negative effect on the work of the UZ itself.

In particular, the load reduction at the beginning of November is precisely related to the shortcomings of transportation planning, which takes place in manual mode and does not coincide with the transportation plans and capabilities of foreign carriers. Yuriy Shchuklin, a logistics expert and adviser to the head of the board of Ukrzaliznytsia, notes this.

He stated that the bottleneck of export logistics in November was no longer wagons or cross-border crossings, but “plans” of transportation volumes (allowing farmers, elevator operators, and traders to include in their monthly activities the sale of their products, their shipment for export and the receipt of funds for their existence), which the UZ distributes in a manual classified mode and notifies the cargo owners at a later date.

For example, if Ukrzaliznytsia confirms and proves the shipment plans for November on November 1, then the start of cargo transfer to a foreign carrier is technically possible only from November 18-20. Therefore, the foreign carrier is not able to absorb the amount of cargo that it “confirmed” at the request of the UZ to process during the entire month, for the 10 days remaining until its end.

In order to export grain in November, it is necessary to start planning transportation as early as October. But this is impossible. Because Ukrzaliznytsia is waiting for that non-productive part of the “market”, which in good faith supports it in the conservation of the past, to declare its intentions, when all competing foreign carriers will wake up and decide whether they will work, and line up in a large queue, form an impossible demand and “proposals” to overcome it.

Only on November 1 does the carrier receive a response from Ukrzaliznytsia that it is possible to go and sell, and only on November 2 it can start looking for wagons for its cargo and plan the operation of elevators.

“In five to ten days, the wagons will come to you, you load them, clear them at customs. And in the best case, they will go to the border on November 12, and they will reach the foreign carrier on November 20. And it is on this day that the head of the commercial department of the UZ will reprimand – why are you, farmers, not fulfilling your monthly plans?” Shchuklin noted.

The thing is that, in order to implement the November plan, the agrarian must receive confirmation from the Ministry of Agriculture in October. Then by the 20th he will find the wagons, have time to load them and clear customs, and on November 1 he will be able to send them. Or agrarians are forced to buy Ukrzaliznytsia wagons, which have preferences in the plans, can be immediately submitted in the “exact dates” of the first decade.

“So when to conclude an export contract? Before the confirmation of plans, so that it will not be carried out due to a short time, or after confirmation – in order to be guaranteed to lose money by overpaying for the urgent finding of wagons? It’s a closed circle,” — the adviser to the head of the board of the Ukrainian Academy of Sciences.

The expert added: the second factor that prevents the effective docking of Ukrainian cargoes by foreign carriers is the desire and imposition on everyone without exception of the Soviet technology of forming trains “by their readiness” by Ukrzaliznytsia. It allows a large number of wagons to be transported in one warehouse, but the range of goods and the time of their arrival at the border often do not correspond to the threads of the schedules of foreign carriers.

The officials of Ukrzaliznytsia openly manipulate, blaming foreign carriers for all problems and juggling indicators of how service to farmers has allegedly improved; therefore, they have to agree with the drastic increase in the price of the wagon component. They said that UZ is ready to bring even more to the western border, but for some reason foreign carriers are not ready to fully accept these cargoes.

In fact, the planning technology is such that there are no obligations between UZ and foreign carriers. It does not take into account any schedule threads that trains in the EU follow. It is not the foreign carrier that causes the queue and the violation of the delivery deadline, but the old Soviet system of organizing transportation on a ready basis, which does not foresee anyone’s interests, except for Ukrzaliznytsia.

The adviser to the Chairman of the Board of the UZ predicts that the reluctance of the state carrier to implement responsible end-to-end transportation planning with a planning horizon open for several months will ultimately negatively affect the position of Ukrzaliznytsia itself.

Agrarians generally do not have any levers for managing their production cycle, which must end with the sale of products. Ukrzaliznytsia categorically cuts off the opportunity to plan and sell something in advance. The UZ official argues: changes are impossible, it is written in the rules, we have such an order.

“So, they protect the order that does not allow farmers to survive? It is absurd that the state carrier, together with the so-called “market” of intermediaries that support it, takes part of the money from farmers and, under the guise of some “order”, does not allow anything to change,” added Shchuklin.

All this critically increases the uncertainty of the agricultural market, which has already painfully reacted to the prospect of losing the “grain corridors”. The decision to make money at the expense of farmers is a fatal mistake that will destroy both the industry and the carrier. It is the grain cargoes that today are the main donor of the viability of the UZ. After all, other cargoes are few, and metallurgical ones do not allow her to earn, they only cover expenses. Ukrzaliznytsia will not be able to exist without the agricultural market, it has exhausted the list of other sources.