VLP Group shared the problems of timber cargo logistics with the State Duma

Representatives of VLP Group shared a number of problems with timber cargo logistics at a meeting of the Expert Board on Timber Industry, Woodworking and Pulp & Paper Industry Issues of the State Duma Committee on Industry and Trade.

“The situation with timber cargo transportation by railway is a cause for serious concern. The shortage of railcars and the existence of contracts for timber products supply entail timber spoilage and failure to fulfil contractual obligations. In our estimation, the increased railcar turnover time in the Vologda Region alone entailed failure to meet roundwood shipment plans by approximately 40% in Q3 2024 (5,000 railcars, or about 300,000 t). Russian Railways needs to take measures immediately to ensure uninterrupted transportation of timber cargos,” Roman Markov, Government Relations Manager at VLP Group, commented the situation in the industry.

The timber business is also concerned by the growing freight tariffs. The 13.8% rise approved by the Government of the Russian Federation, combined with additional surcharges, will increase freight rates by an average of 15.14% from January 1, 2025 compared to the year 2024. Subsidies of the Ministry of Industry and Trade need to be extended to 2025 to reimburse timber exporters’ transportation expenses, says VLP Group’s press release.

Fines for transportation of timber and timber processing products without the GLONASS system will also come into effect from January 1, 2025. This requirement only applies to timber cargos, which creates challenges for enterprises that use the services of third-party trucking companies transporting other cargos that do not require GLONASS. As a result, some of these companies will stop transporting sawn timber. This problem is particularly pertinent for enterprises that rely on international transportation (e.g., from Turkey and Uzbekistan). VLP suggests amending the legislation to preserve the GLONASS requirement for forestry machinery but exclude it for sawn timber transportation.