Latvia's LDZ Cargo takes over transportation of Russian goods in Estonia
Estonia's state-owned rail company Operail stopped transporting goods of Russian and Belarusian origin on January 1 and Estonian and Latvian companies are now filling the gap.
In December, Minster of Economic Affairs and Infrastructure Riina Sikkut (SDE) signed a new agreement laying out the government's expectations for Operail.
One sentence was changed which no longer allows the company to transport goods of Russian and Belarusian origin.
Alongside Estonian company Go Rail, Latvian state-owned transport company LDZ Cargo has taken over some of the work in Estonia and has signed a contract with Estonian Railways (Eesti Raudtee).
The agreement states LDZ Cargo provides the rolling stock but local drivers must be employed while the trains are on Estonian territory as they are required to speak Estonian.
Kaido Zimmermann, head of Estonian Railways, told ERR that LDZ Cargo's first shipments have already taken place over the eastern border from the Paldiski terminal.
LZD Cargo plans to transport approximately 200,000 tons of cooking oil in Estonia this year. The company said negotiations with other Estonian customers are being carried out and the volume of transported cargo will increase in the near future.
Go Rail subcontracts work to LDZ Cargo. Manager Alar Pinsel told ERR details cannot be disclosed due to "commercial confidentiality".
Pinsel could not say how much of Operail's work is being picked up by LDZ Cargo. He said Go Rail wants to take over this work in future.
Freight from Russia drying up
Freight transport with Russia and Belarus has drastically decreased since sanctions were applied last year, and after the implementation of Operail's new rules, it dropped even more, Zimmermann said.
"Very little business remains with Russia. While we used to ship something like 40 million tonnes a year to Russia, last year we shipped four million tonnes at the most, and this year even less, because in the first two months of last year, we were still shipping fertilizers, which are no longer shipped," he said.
In the first 10 days of this year, the volume of cargo transportation decreased.
Last year, transport fees for Belarusian and Russian goods amounted to less then 25 percent of Estonian Railways' revenue. It will be even less this year.
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Editor: Helen Wright