According to the results of the first quarter, Vladimir Lisin’s First Freight Company (Freight One) regained its leadership in the ranking of railway operators, which it had lost four years ago, displacing the Federal Freight Company (FGK), a member of Russian Railways, from the first position. According to experts, the reason for the loss of FGK’s positions is the reduction in operations to maintain rates at an acceptable level, and soon, as the freight market revives, the situation may change.
In the first quarter, there were changes in the hierarchy of railway operators. For the first time in four years, the leader of the rating, the Federal Freight Company (FGK, controlled by Russian Railways), yielded first place to the First Freight Company (Freight One) of Vladimir Lisin. As follows from the INFOLine Rail Russia TOP rating for the first quarter, FGK, which yielded Freight One in terms of loading back in 2018 (see Kommersant dated March 21, 2019), continues to lead in terms of the size of its fleet in ownership and management. However, if Freight One’s cargo turnover grew by 9.4% by the first quarter of 2020, it fell by 7.1% for Freight One, which threw the company down to second place in terms of this indicator.
The dynamics of revenue for 2020, which is also included in the rating for the first quarter, did not develop in favor of the subsidiary of the state holding. Traditionally, the leaders in terms of revenue are operators specializing in the transportation of oil cargo (first place was taken by Transoil).
FGK declined to comment. “It is pleasant to note that we have become the market leader, being only number two in terms of fleet size, which speaks of the efficient use of our assets,” says Freight One CEO Sergei Karataev. “Last year we paid a lot of attention to customer relations, including through the development of digital products that improve the quality of interaction with customers, as well as the accuracy and timeliness of supplying the fleet for them. This allowed us to increase the market share in gondola cars and boxcars, as well as to increase the efficiency and profitability of our operating model. ”
Operators of wagons in 2020 got rid of non-core fleet
A Kommersant source in the market notes that it is not entirely correct to compare FGK and Freight One. Cargoes for the needs of related companies, primarily NLMK (about 41% of Freight One’s loading), account for a significant share in the structure of freights transported by Freight One. And due to the large volume of long-term contracts (about 68%) Freight One is less prone to price fluctuations in the market, he explains. While FGK has a small share of long-term contracts in its portfolio. As the general director of FGK Viktor Voronovich said in June in an interview with “Gudk”, the company “every month the plan differs from the previous one in geography by 30 percent.”
In the second half of June, the company removed more than 6 thousand gondola cars from the sludge due to an increase in demand due to growing traffic, the expert notes, and in the third quarter the share of the used fleet may continue to increase, although this will not have time to affect the results of the first half of the year. While FGK, according to Mikhail Burmistrov, focuses not on the volume of traffic and cargo turnover, but on ensuring the profitability of the fleet and increasing rates for customers in the context of improving market conditions.
Top-20 largest railway operators in the Russian Federation in the first quarter of 2021
*NTK was established by SUEK and Eurochem at the end of 2020. SUEK ranked seventh in the first quarter of 2020.
**Ugol-Trans left UMMC in 2020 (14th place in the first quarter of 2020).
Source: INFOLine Rail Russia TOP.