Competitive situation in cross-border traffic has become clearer

Fenniarail started the rail transportation of imported timber between the border stations at the Finnish-Russian border and UPM plants in January 2018. Starting the transport operations required Fenniarail to purchase logistics and shunting services for the border traffic from VR-Group Ltd.  From the perspective of Fenniarail, VR’s pricing was unreasonable and discriminatory, and the company lodged a complaint on the matter to the Rail Regulatory Body. The Regulatory Body processed the complaint during 2018 and issued its decision on 24 September 2018.

According to the decision, the pricing applied by VR does not in all respects comply with the Railway Act and the decrees issued based on it. The Regulatory Body ordered VR to lower its prices and correct the pricing structure of its service production.

This is the first decision issued concerning the basis for pricing in rail freight transport. The principles have now been established on how VR as the sole provider must price its services for other rail freight transport operators. Fenniarail believes that the official decision clarifies the pricing of border traffic. Fenniarail’s goal is effective competition in freight traffic, which provides the best benefits to Finnish trade and industry.

“We think that the decision of the Regulatory Body is a significant one, and expect VR to adjust its pricing so that it corresponds to the costs”, says Juha Hakavuori, managing director of Fenniarail. “The decision issued is a step towards a neutral competitive situation. In the next phase, the logistic services of the border traffic must be transferred to an independent party. The decision by the Regulatory Body clearly indicates the problems that arise when an operator possessing a monopoly provides and prices its services for its competitors”, says Petri Lempiäinen, chairman of the board.