Head of Estonian Railways: Decline in Cargo Volumes Linked to Sanctions

Cargo volumes reduced due to sanctions set against Russia (Scanpix)
7/30/2014 3:12 PM
Category: Economy

Estonian Railways cargo volumes are expected to decrease by a quarter this year, at least partly due to the economic sanctions leveled against Russia.

Ahti Asmann, chairman of the board of the Estonian Railways, told ERR radio news that over the year the reduced cargo quantity amounts to 15 million euros of revenue loss. If the railroad cannot sustain itself and necessary investments with transit, then passenger carriers will probably have to pay more.

The Russian share of Estonian exports according to data from May is 11 percent. Compared to last year, export to Russia has dropped by a fifth. Import from Russia during the same time period has increased over 40 percent.

Asmann said that transport of goods via railroad is in essence a geopolitical business, where results are directly dependent on international relations between countries. Therefore all sanctions against a trade partner affect the railroad business negatively, and this is what is showing up in Estonian Railways revenue figures this year.

“From the beginning of the year, cargo volumes have shown a downward trend, mainly petroleum products. Currently, according to the annual basis we estimate a 25 per cent reduction. It is rather difficult to estimate how much of this decline is related to the sanctions, but taking into account that the goods exported eastwards were controlled by companies and people on the US blacklist, we can attribute all reduction in cargo volumes to the sanctions," said Asmann.


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