"According to UZ estimates, the logistics component in the cost of cargo is expected to rise by approximately 2.7% for iron ore, and up to 1% for coal and ferrous metals. At the same time, the industry anticipates a much more significant absolute effect: additional logistics costs for the mining and metallurgy sector will amount to 8–10 billion UAH, with "ArcelorMittal Kryvyi Rih" alone accounting for over 1.4 billion UAH per year," the portal reports.
Experts believe that as a result of the tariff increase, the volume of transportation—and consequently, profits—may decline, as customers might opt out of "Ukrzaliznytsia" services.
"A 37% tariff increase will effectively remove petroleum products from UZ's transportation nomenclature. There are more than enough tankers; their numbers have quadrupled since 2021," said Sergey Kuyn, director of the consulting group "A-95."
The potential return to the issue of aligning tariff classes in 2025 may trigger an even greater rise in shippers' expenses. In the long term, this could lead to a reduction in production volumes or even a complete halt in operations, the publication states. The authors note that such a scenario is a logical consequence of increased production costs and a loss of competitiveness in export markets. Companies in the sector are not capable of operating at a loss or on the brink of profitability for extended periods, the portal emphasizes.
"Further consequences include a decrease in budget revenues and foreign currency inflows into the country, which will impact the entire Ukrainian economy, lead to inflation growth, and reduce job opportunities. Mining and metallurgy enterprises are crucial for certain local budgets. Their tax contributions and direct expenditures partially fund local social infrastructure. A reduction in production will worsen financial conditions and necessitate cuts in social spending, which collectively may lead to increased social instability in the country," notes GMK Center.