Russian rail container transportation has been growing during the 2020 crisis, despite historically being sensitive to economic cycles, Fitch Raitings reports.
Growth has been mostly due to an unexpected competitive advantage as auto transportation and sea lines proved much more exposed to lockdown restrictions than rail. Some cargo volumes from the auto and marine transports therefore shifted to rail. In addition, the reduced capacity of airline cargo companies raised prices in that segment, which gave a price advantage to rail transportation.
Healthy volume growth in 1H20 for the two largest Fitch-rated companies in the sector, Transcontainer (B+/Stable) and Far-Eastern Shipping Company (FESCO; CCC), was insufficient to compensate for the price slump and Russian Railways' empty-run tariff indexation. However, the decline in EBITDA for both companies was less pronounced than in the crises of 2009 and 2015.
