What the decline in RZD rail transport indicates
Freight traffic on the RZD rail network — russia’s railway transport monopoly — declined even more sharply than expected in the first quarter of 2025: by 7.2% instead of the projected 5.5%. The steepest drops were recorded in grain transport (-30.8%), construction materials (-23.2%), cement (-13.5%), metal (-13.1%), and oil (-5.9%).
▫️ This indicates a slowdown in industrial production and a broader deceleration of the russian economy. Two key factors are at play—deteriorating service quality for businesses due to RZD’s shift toward military logistics, and the growing economic crisis caused by the war.
Sanctions are having a destructive impact on RZD, restricting access to imported equipment, train cars, and spare parts. Because of enormous wartime expenditures, the russian state is cutting back on railway modernization and infrastructure upgrades. The decline in RZD freight traffic is a direct consequence of kremlin policy, and as long as the war continues, the problems faced by this strategically important company will only sharpen.
