Second Freight Co Targets 20% Market Share
OREANDA-NEWS. September 08, 2010. According to schedule the board of Russian Railways (RZD) have confirmed their intent to form the Second Freight Company, 156,000 rail freight wagons will be transferred from the holding company’s stock in stages.
Plans have been afoot for some time to open up the rail freight sector and Russian Rail sees this as the way forward.
According to RZD the creation of the Second Freight Company will not alter the consumer structure of rail freight services. The largest clients will continue to be industrial and raw materials companies: coal, metals, and oil holdings, construction companies, and mineral fertilizer producers. The new company plans to own around 200,000 rail wagons eventually, over 70% of them gondolas. RZD say the company intends to take over 20% of all Russian controlled rail cargo movements within five years.
The authorized capital of the new company will exceed €1 billion and to ensure its success RZD say that for the initial two years of trading Second Freight will employ an aggressive marketing strategy aiming to set a tariff below market rates to attract trade. Ten percent of the companies trade is liable to be in neighbouring CIS states.