What impact did the war have on Russian Railways

The current financial situation of Russian Railways is a clear example of the negative consequences of the war on one of the largest and richest companies in Russia - Russian Railways.

In just one year, the net profit of Russian Railways decreased almost 9 times. In particular, the net profit of Russian Railways decreased from 118.3 billion rubles in 2023 to 13.9 billion rubles in 2024.

The investment program approved by the Board of Directors of Russian Railways in the amount of 891 billion rubles for 2025 is 40% lower than the investment program for 2024.

Russian Railways is in a systemic crisis - 300,000 wagons are lying idle on the railway network. The railway is experiencing an acute shortage of personnel, which systematically disrupts the train schedule. Added to this is the sharp decline in transportation volumes over the past 20 months in a row.

Sanctions have reduced the export of basic goods. The sanctions imposed by the West have dealt a severe blow to a number of commodity groups. For example, exports of timber have decreased by 18%, ferrous metals - by 8%, ore and coal - by 5%.

The shortage of personnel has paralyzed the transportation process. The personnel crisis is unprecedented. Due to the recruitment of railway workers in the hostilities, there is a daily shortage of 2,500 train drivers and 3,000 locomotive crew members, which leads to the cancellation of 200 train routes per day.

With a further reduction in exports, the continuation of the military operation and the maintenance of sanctions, the annual decrease in railway freight turnover may exceed 5%. If freight turnover volumes decrease by 5-7% per year, this will put Russian Railways in a very difficult financial situation.

From January to April 2025, the production of electric locomotives decreased by 13%, and diesel locomotives - by 6%. Due to lack of funds, timely renovation of wagons is not carried out, and thousands of wagons remain idle at factories.

Without urgent staffing, increased locomotive production, and targeted investments in infrastructure, the Russian railway sector will face collapse in the near future.

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