Starting March 1, the Ukrainian Railways (Ukrzaliznytsia) has restricted the use of foreign freight cars within the country. This decision stems from a surplus of domestic wagons. A representative from Ukrzaliznytsia stated, “It is unfair that a fleet belonging to another country is in operation while our new, possibly even financed, Ukrainian fleet remains idle.”
This decision has sparked outrage among wagon owners in Estonia. According to Sergey Yakovlev, a board member of Skinest, over 500 freight cars owned by Estonian companies are currently in use in Ukraine, with a total estimated value of around 20 million euros, which he describes as “frozen” assets.
“This ban was implemented without prior notice. It’s as if you receive a notification on Friday that starting Monday, you can no longer use your property,” Yakovlev explained. He also reported that clients have indicated that due to reduced competition from the ban, the Ukrainian side intends to raise tariffs for customers.
Economic expert Raivo Vare commented, “Estonia has been the most supportive of Ukraine, and now restrictions are being imposed. This is not just a matter of the railway business; it raises broader political and economic concerns.” Oleg Osinovsky added, “This is a pragmatic and cynical approach. They accept financial and military aid from Estonian taxpayers but do not allow us to operate on their territory. Ukraine has created preferences for its own companies, and local wagon owners lobbied for the ban on foreign wagons. All Baltic wagons are now halted.”
The decision puts Estonian entrepreneurs in a difficult position regarding the future of their wagons, with any option likely resulting in losses. One possibility is to transport the wagons back to Estonia, as initially planned at the start of the conflict, but this was deemed unfeasible due to additional costs of 15,000–20,000 euros per wagon.
Another option is to sell the wagons in Ukraine. However, due to forced sales, they would likely be sold at a discount, potentially fetching only about half of their market value, according to Yakovlev. A third option is to establish a new business structure in Ukraine to take over the wagons.
“All options are quite unprofitable, and we may end up investing half of what we have already invested,” Yakovlev noted, adding that some older wagons nearing the end of their lifespan might be scrapped for metal.
Last week, entrepreneurs met with representatives from the Ministry of Foreign Affairs, who confirmed they are addressing this issue and will soon send a letter to the Ukrainian Minister of Transport.
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