The wheels are coming off: Russia’s rail freight collapse exposes a deeper industrial crisis

The steepest declines occurred in container shipments of cars (down 42 percent) and other machinery (down 17 percent). Meanwhile, transport of core container cargoes — chemicals, fertilizers, manufactured goods, and metal products — has remained relatively stable, even if these, too, are slightly down. Timber and paper shipments, on the other hand, showed a small increase.

Nothing left to load

Traditionally, more than three-quarters of Russian Railways’ freight loading comes from the “big six” categories: coal, oil and petroleum products, iron and manganese ore, construction materials, fertilizers, and ferrous metals. In 2025, only one of these — fertilizers — showed modest growth. Three hree saw moderate declines, while two (construction materials and ferrous metals) suffered a major collapse.

Overall, out of 15 freight categories tracked by Russian Railways, only two show positive dynamics this year: fertilizers, and nonferrous ore and sulfur feedstock.

The steepest declines were in the loading of ferrous scrap (down 35 percent), ferrous metals (down 17 percent), grain (down 27 percent), industrial raw materials (down 18 percent), and coke (down 16 percent). Shipments of these goods, along with cement (down 13.8 percent) and construction materials (down 13.1 percent), have dropped so sharply that it clearly indicates a crisis.

In the categories of coal, oil and petroleum products, iron and manganese ore, chemicals and soda, and timber, the decline has been moderate — between 1 and 6 percent year-on-year.

In absolute terms, more than half of the total reduction in freight loading came from four groups: construction materials, oil and petroleum products, ferrous metals, and coal. Coal and hydrocarbons account for a larger share of total shipments, so even a relatively modest decline (2.8 percent for coal and 5.4 percent for oil and petroleum products) had a major impact. Construction materials and ferrous metals have a smaller share, but activity in those sectors has contracted far too abruptly.

The construction boom is over

From January to September 2025, Russian Railways carried 11.4 million tons less construction cargo and 2.5 million tons less cement than during the same period in 2024. What is behind this decline in freight volumes? Rosstat data point to reduced production. In the first nine months of the year, Russia produced 8.7 percent less cement and 5.6 percent less concrete. Output of various types of bricks fell by 6 to 13 percent, and production of ceramic tiles by 5 to 24 percent.

The decline is easy enough to explain: there is no need to produce as much construction material as before given that housing completions this year are down 5.3 percent and new construction starts have fallen by 16 percent. In Moscow and the Moscow Region, the figures for new projects are even worse — down 31 and 32 percent, respectively. This means that before long, housing completion rates will show an equally sharp decline.