Russian Railways Becoming a Growing Political and Geopolitical Problem for Moscow

Executive Summary:

• Moscow’s need to supply its invasion forces in Ukraine, its rapid shift of trade away from Europe toward Asia due to sanctions, and slashed investments have put unprecedented strains on Russian railways.
• China will seek alternative routes for trade with Europe, using domestic Russian railways only for bilateral trade.
• The problems of Russia’s railroads, highlighted by declines in the speed of Russian trains and the amount of trade they carry, will have immense and increasingly negative political and geopolitical consequences for the Kremlin.

More than nearly any other country, Russia relies almost entirely on its railroads to move goods and people around the country and conduct foreign trade. Making railway infrastructure critical to Russia’s economy, and the situation is becoming increasingly dire. Due to longstanding problems with its rail network, a shortage of new investment, and increased demand, rail speeds have fallen dramatically under Russian President Vladimir Putin. According to Russian experts, the speed of Russian cargo trains has declined to the slowest since 1960, standing at 40.6 kilometers/hour (25 miles/hour). When taking into account the time trains are stopped, the average speed falls further to 35.7 kilometers/hour (22 miles/hour), which is far slower than in other countries, making this channel vastly more expensive (Akcent.site, January 31). Putin’s war in Ukraine and his reorienting of trade away from Europe to Asia has exacerbated Russia’s railway issues  (see EDM, February 25, 2020).

Kremlin officials are playing down this problem, pointing to a slight uptick in speeds in November and December 2024 and suggesting that all of these issues are problems of growth (Noviye Izvestiya, January 31). Russian and Ukrainian analysts, however, are not following that rhetoric. Some have even begun to talk about what is going on as presaging “the collapse” of the Russian rail system and, with it, both Moscow’s domestic economic and political arrangements as well as its hopes for its partnership with the People’s Republic of China (PRC) (Eho Roccii, January 30; Akcent.site; Center for Countering Disinformation, January 31). Analysts note that the Russian railway system was in trouble long before Putin launched his expanded war in Ukraine and was forced by sanctions to reorient Russian foreign trade from Europe to Asia and that, as a result, far less was needed to push it over the brink than would otherwise have been the case. (For background on the problems of this branch in the first two decades of Putin’s rule, see  EDM, February 25, 2020.) Even its most fabled routes, the Trans-Siberian and Baikal-Amur Mainline (BAM), remain in some portions single rather than double-tracked, slowing movement and forcing many echelons to stand idle for lengthy periods to allow others to pass. In the resulting chaos, Russian experts say that even entire trains have disappeared (Al’ternativa, August 16, 2021; Window on Eurasia, August 18, 2021). While Moscow has talked for years about major expansions in its rail network east of the Urals, the Russian government cut investment in railways east of the Urals in the 2010s and has continued to do so despite claims to the contrary (Window on Eurasia, August 18, 2021, April 20, 2023). Unsurprisingly, such cutbacks have now only made the situation worse.

Russian experts at the Higher School of Economics say the current situation is especially dire because domestic and foreign trade problems are increasingly interrelated. The shift in trade away from Europe to Asia was done so quickly that the railways did not have time to make plans. The priority Moscow has given to foreign trade and earnings meant that people in the regions of Russia east of the Urals, in particular, have suffered, with deliveries being made late or not at all so that exports to the PRC could continue. One measure of that is a more than four percent decline in the total volume of materials carried by Russian Railways over the last year. Given that Moscow prefers sales to foreign countries and transit fees, the Russian population has been hit particularly hard (Noviye Izvestiya, January 31).

The adverse effects on the Russian population are only one part of the problem and are unlikely to be the Kremlin’s largest concern. On the one hand, there is an increasing imbalance between what Russia exports to the PRC—raw materials—and what it imports from the PRC—finished products. While that has been much commented upon, the kinds of railcars needed for bulk cargo and finished goods differ greatly. Russian rail often cannot find enough of either to handle the trade, leading to backups and delays. On the other hand, given these problems and the declining speed of Russian railways, Beijing will almost certainly be looking for routes bypassing Russia for its trade with Europe. Some of those will go through Central Asia, where rail speeds are higher, and some via the world oceans, where speeds may be slower, but transportation costs per ton of cargo are lower (see EDM, October 28, 30, 2024, January 28). Such alternative routes offer an additional advantage in that they have far more container shipping opportunities than on Russian railways. As a result, the decline in the speed of Russian trains, as small as it may appear, is likely to cast a large geopolitical shadow. 

The domestic and foreign policy aspects of the problems with Russian railways are likely to combine to put new pressure on the Kremlin to invest more in this channel. It will likely be able to do this only by ending the war in Ukraine and getting involved in new conflicts abroad. At the very least, these problems are likely to spark anger among elites who will be able to see how Putin’s policies are costing them money and among Russians in the regions, who are even worse off. For over two centuries, Russians have observed that their country has just two problems: roads and fools. That may remain true, but the trade routes must be expanded to include railroads as well as those carrying cars and trucks.