Russian rail freight drop deepens in February as economy slows

By Gleb Stolyarov

MOSCOW, March 2 (Reuters) - A protracted crisis in Russia's rail industry - driven by the slowing economy, sanctions and global market pressures - deepened in February, adding strain to the debt-laden state rail monopoly.

In Russia, where the lion's share of all industrial goods is transported by rail, freight volumes have long served as a key gauge of economic health.

Russian Railways said on Monday that cargo shipments fell 3.2% in February to 84.2 million metric tons.

Aside from a brief stabilisation in October last year, cargo volumes have been falling year on year since October 2023. The broader backdrop is a cooling economy: the Russian economy grew just 1% in 2025 and growth is expected to continue to slow.

More than 35% of all rail cargo is destined for export, dominated by coal, metals, oil and refined products.

Overall rail cargo volumes fell by 5.6% in 2025 as shipments of oil, construction materials, metals and coal declined. Cargo loading reached 1.116 billion metric tons, marking a 16-year low, data published by the state company showed.

"The main impact on loading volumes comes from a decline in the supply of bulk cargoes due to lower activity in several industries, primarily coal, metallurgy and construction." Russian Railways said in a statement on Monday.

Global market conditions, sanctions, a strong rouble and weakening domestic demand were among the factors impacting cargo volumes, the lobby group Union of Railway Transport Workers said in a review of 2025 results.

Freight transportation is Russian Railways' core revenue source. But the company - the country's largest commercial employer - is under mounting financial pressure as borrowing costs surge to their highest level in two decades.

The Russian government and major banks are discussing ways to prop up Russian Railways by raising transportation prices, restructuring loans and selling non-core assets.