Railroad Recession: Decline in Transportation Indicates Structural Problems in russia

In January–April 2025, “russian railways”’ freight traffic decreased by 6.8 % to 370.6 million tons. This is a continuation of the negative trend of 2024, when the volume of transportation decreased by 4.1 %. Transportation of construction materials (-21.3 %), ferrous metals (-23.3 %), scrap metal (-25.5 %) and coal (-6.4 %) suffered the most.

The decline in transportation volumes indicates a systemic weakening of the russian economy, particularly in the mining, metallurgical and construction sectors.

The company’s revenues are expected to decrease by $1.1 billion. Against this background, “russian railways” plans to cut its 2025 investment program by $404.6 million, including giving up track modernization and rolling stock renewal.

The reasons for the decline are the tough monetary policy of the Central Bank of the rf

(21 % interest rate, 25 % of revenue), lack of investors, preference for military cargo transportation, worn-out infrastructure, staff shortages, and a decline in production in key export industries (“rusal”, “nlmk”, “gazpromneft”). Western sanctions and the unstable external situation put additional pressure.

Given the continuation of the war against Ukraine and gloomy economic forecasts, the downward trend in cargo traffic will intensify.