Sometimes empires are not defined by battles lost or treaties signed, but by the silence of railways. In Russia — a nation whose sheer geographic enormity has made rail transport not merely convenient but existentially necessary — that silence is growing louder.
Across the country’s eleven time zones, from the coal fields of Kuzbass to the Pacific ports of Vladivostok, freight trains are standing still. Wagons that should be carrying steel, coal, cement, and grain sit idle in sidings, stacked up in a queue that, if coupled together, would stretch from Moscow to the Pacific Ocean.
This is not a momentary disruption or a temporary consequence of some external shock that will pass. It is a structural collapse — deep, systemic, and accelerating. Russian Railways (RZD), the state-owned monopoly that moves 47 percent of all cargo in Russia (and 87 percent if pipelines are excluded), is in the most serious crisis of its post-Soviet existence. The numbers are stark, the causes are multiple and reinforcing, and the trajectory points downward with alarming consistency. To understand what is happening to RZD is to understand, with unusual clarity, what is happening to Russia itself.
Before the politics, before the analysis of cause and effect, the raw freight statistics of RZD tell a story that no official Kremlin communiqué can obscure.
In 2024, Russian Railways recorded its lowest freight loading volumes since 2009 — the year of the global financial crisis. That alone would be alarming. But the decline did not pause there. In the first nine months of 2025, cargo loading fell by nearly 7 percent year-on-year, representing a loss of approximately 60 million tons compared to the same period in 2024. To appreciate the physical scale of that loss: at an average of just under 100 tons per freight car, 60 million missing tons equals roughly 600,000 empty wagons. At 14 meters each, those wagons would form a train 8,400 kilometers long — almost precisely the distance from Moscow to the Pacific coast.
By the end of 2025, total freight volumes dropped 9.4 percent compared to 2024. Since 2022, the cumulative decline has exceeded 15 percent. Shipments have now fallen for more than 20 consecutive months, with the pace of decline accelerating each quarter. If the trend line in early 2025 — a drop of more than 7 percent in the first five months alone — holds through the full year, freight volumes will reach their lowest level since 2003, erasing more than two decades of growth.
No single sector has been spared. Coal shipments fell 2 percent in early 2025, on top of years of prior decline. Ferrous metals — once a reliable traffic category — fell 17 percent in freight shipments, reflecting a 15 percent collapse in steel production. Construction cargo fell 23 percent, cement shipments dropped sharply as new housing starts collapsed by 16 percent nationally and by over 30 percent in the Moscow region. Grain shipments fell 30.8 percent in the first quarter of 2025 alone, as high fertiliser costs and poor profitability drove wheat farmers out of cultivation. Even container shipments, which had grown year after year, turned negative — falling 4 percent in the first three quarters of 2025.
One category alone kept growing through 2022–2024, classified vaguely in RZD’s official data as “Other goods, including in containers.” Transport analysts and independent researchers believe this category primarily covers military cargo: ammunition, weapons systems, and materials for arms production. The prioritization of military freight has in turn become one of the structural drivers of civilian freight collapse.
RZD is not merely suffering an operational crisis. It is suffering a financial one of potentially existential dimensions.
The company’s debt has surged from approximately 1.5 trillion rubles ($11 billion) before the full-scale invasion of Ukraine in February 2022 to nearly 4 trillion rubles ($45 billion) by early 2026 — a nearly threefold increase in four years. Net profit fell threefold in 2024 compared to 2023, and in the first nine months of 2025 alone, profit fell by a factor of four compared to the prior year. This is not the financial profile of a company in temporary difficulty. It is the profile of a company that is losing money faster than it can borrow to replace it.
The investment program has been slashed accordingly. In 2024, RZD invested 1.28 trillion rubles ($16.6 billion) in infrastructure, rolling stock, and development. In 2026, that figure has been cut to 713.6 billion rubles — approximately $9 billion — down 20 percent from 2025 and nearly half the 2024 level. The lion’s share of that 2026 budget is allocated not to expansion or modernization, but to routine maintenance and basic safety. Ambitious infrastructure projects have been quietly shelved. Most notable among these is the proposed Northern Siberian Railway (Sevsib), a nearly 2,000-kilometer rail corridor through Siberia that was intended to open new resource extraction routes. It has been abandoned indefinitely.
To raise cash, the Russian government has directed RZD to consider selling the Moscow Towers, a 62-story office complex in the Moscow-City financial district valued at $2.8 billion — purchased only in 2024 for $2.5 billion. The government has also discussed selling the Federal Freight Company (FGC), RZD’s largest freight subsidiary, which manages 134,300 items of rolling stock. These are the moves of an organization liquidating assets, not investing in its future. RZD has also announced plans for an initial public offering, though Russian market analysts note that more than 70 percent of companies that went public in Russia over the past two years have seen their share prices fall by an average of 40 percent — making the IPO a gamble at best and a desperation measure at worst.
The state has recognized that RZD is “too big to fail.” With 700,000 employees, it is Russia’s largest single employer. It is the logistical backbone of the entire country, the primary supply chain for the military, and the only viable means of moving goods across vast stretches of territory without road infrastructure. Allowing it to collapse outright would be unthinkable. But propping it up indefinitely — particularly as Russia’s central bank has maintained historically high interest rates to combat inflation — requires a government fiscal commitment that competes with every other wartime priority. Authorities are reportedly exploring ways to shift the company’s debt burden onto state-controlled banks, effectively converting corporate debt into a disguised government obligation.
At the current rate of decline, the Russian railway industry will only survive as long as the state can support it through forced loans, capital injections, or debt write-offs.
The crisis of Russian Railways is not mono-causal. It is the product of at least five distinct and mutually reinforcing forces, each serious enough on its own, but together constituting a structural trap from which there is no easy escape.
When Russia invaded Ukraine in February 2022, the cascade of Western sanctions immediately disrupted the commodity trade flows that had been the backbone of RZD’s freight business for decades. Timber, ferrous metals, ores, and minerals — key categories of Russian exports — came under EU and G7 sanctions, eliminating the trade with Europe that had previously moved through Russian rail networks. Fertilisers, while technically unsanctioned, effectively disappeared from Western markets after Russia’s major banks were cut off from the SWIFT international payment system, making transactions too complicated and legally risky for most counterparties.
Overnight, the westbound rail corridors that had carried export goods to European ports lost the bulk of their purpose. Russian Railways attempted to compensate by pivoting eastward, redirecting freight toward China and through Central Asian corridors. This pivot required enormous additional investment — borrowing to extend and upgrade eastern rail infrastructure — and came with significantly lower tariff revenues, since eastern routes are longer, more congested, and serve customers with greater price leverage than European importers.
From 2024 onward, the Russian government formally imposed the prioritization of military transport on the RZD network. Trains carrying ammunition, military equipment, fuel for the front, and materials for arms production are given precedence over civilian freight at every junction and bottleneck. The practical consequence has been severe disruption to commercial logistics. Customers have reported mounting delivery delays with explanations almost invariably linked to military traffic priority. The network has become increasingly congested not because it is carrying more — it is carrying far less — but because military movements create unpredictable blockages that cascade through the system.
This is the railway paradox of Russia’s war economy: the military depends on RZD for its logistics, but the military’s use of RZD is destroying the civilian economy that sustains the military’s budget in the long run.
One of the most underappreciated dimensions of the RZD collapse is the acute shortage of working locomotives. RZD operates a fleet of approximately 20,000 locomotives, but an estimated half of these will require replacement by 2035. The company has calculated that it needs to purchase approximately 1,000 new electric and diesel locomotives every year to meet this target — at a cost of at least 220 billion rubles annually. In practice, it is spending a fraction of that.
Western sanctions have cut off access to the European components, bearings, advanced electronics, and control systems that Russian locomotive manufacturers depended upon. Domestic substitution has proved illusory: between January and April 2025, electric locomotive production dropped 13 percent and diesel locomotive production fell 6 percent. Retired units are being taken out of service faster than new ones are delivered, leaving thousands of newly built wagons sitting unused at factories with no locomotives available to haul them.
By March 2025, according to RZD’s own internal data, 300,000 wagons — nearly one-fifth of the entire national fleet — had accumulated as idle stock on the network, creating enormous congestion and economic waste. These wagons are not idle because no one needs their contents. They are idle because there are insufficient locomotives to move them and insufficient rail capacity freed from military use to clear the backlog.
Russia’s railway crisis has a human dimension that is both deeply personal and strategically devastating. Approximately 200 trains are cancelled every day across the RZD network because the company is short 2,500 drivers and 3,000 locomotive crew members. Some regional divisions are operating with up to 60 percent fewer staff than their minimum operational requirements.
The reasons for this staffing catastrophe are multiple. Military conscription and voluntary enlistment have taken tens of thousands of workers away from industrial and transportation jobs. Many railway workers — drivers, engineers, maintenance staff — have left for better-paying positions in the defense industry or in military contract roles, where wartime budgets have dramatically elevated wages. Low pay, poor working conditions, grueling hours, and the physical demands of operating aging equipment in Russia’s extreme climate have driven away younger workers who might otherwise have entered the profession.
The structural consequence is a downward spiral: fewer drivers mean more cancelled trains; cancelled trains mean lower revenues; lower revenues mean less money for wages; lower wages make it harder to recruit and retain drivers. In 2026, RZD has announced that worker wages will be indexed by a mere 0.1 percent — against inflation running at approximately 10 percent, meaning a real-terms pay cut of nearly 10 percent for an already underpaid workforce.
The final and in some ways most profound cause of RZD’s crisis is simply that Russia’s civilian economy is producing and building and buying less. The railway is a derived demand — it carries what the economy generates. When the economy slows, the railway slows with it.
Russia’s construction sector, historically one of the largest sources of rail freight through its demand for steel, cement, sand, gravel, and bricks, is in severe contraction. In the first nine months of 2025, cement production fell 8.7 percent and steel output fell 15 percent. New housing construction starts fell 16 percent nationally — and by 31–32 percent in the Moscow and Moscow Region markets. These declines reflect the combined effect of interest rates that have risen to 21 percent (making mortgage financing prohibitive for most Russians), falling real incomes, and a general withdrawal of investment from the civilian economy as capital flows into the defense-industrial complex.
Russia’s coal industry, another major pillar of RZD freight, is in structural crisis. Sanctions have closed most European export markets and freight costs to Asian destinations have increased dramatically as eastern rail corridors become congested. Coal mines in the Kuzbass region — where 30 mono-industrial towns depend almost entirely on coal extraction — are cutting production and laying off workers. The railway collapse in that region is not an abstraction: it threatens the economic survival of 1.5 million people.
Even when Russian freight trains do run, they have slowed dramatically. Average freight train speeds on the RZD network have fallen to between 36 and 40 kilometers per hour — and sometimes lower — matching levels not seen since the early post-Soviet era of the 1990s. This is not merely an inconvenience. In a country the size of Russia, where a journey from the Urals to a Pacific port might span 6,000 kilometers, the difference between a train traveling at 40 km/h and one traveling at 60 km/h means the difference between a delivery taking ten days or fifteen days. For industries with just-in-time supply chains, for coal mines that need empty wagons returned quickly, and for export shipments with contracted delivery windows, this speed degradation is commercially catastrophic.
The causes are familiar: congestion from military traffic, infrastructure bottlenecks on the critical Trans-Siberian and BAM corridors, a lack of modern signaling and traffic management technology (much of which was sourced from Western suppliers), and the simple fact that older, less powerful locomotives pull longer trains more slowly on deteriorating track.
The bottlenecks are most acute on the eastern export corridors, where China-bound freight competes with domestic traffic and military supply chains in a network whose capacity has not kept pace with the eastward pivot demanded by sanctions. Plans to expand eastern rail capacity — including double-tracking segments of the BAM line — have been delayed or scaled back as the investment budget shrinks.
Russia’s railway crisis is not a purely domestic concern. It is reordering Eurasian logistics in ways that will persist long after any potential ceasefire in Ukraine.
For decades, Russia’s rail network served as the primary land bridge between East Asia and Europe. The Trans-Siberian Railway offered shippers a faster alternative to ocean routes for container traffic between China and Germany, Poland, Finland, and the Baltic states. That transit role has effectively collapsed. Western sanctions have made routing commercial cargo through Russia legally and commercially untenable for most European companies, and the deteriorating reliability of RZD makes it unattractive even for those willing to navigate the sanctions landscape.
In the transit’s place, alternative corridors are rising. The Middle Corridor — running from China through Kazakhstan, across the Caspian Sea to Azerbaijan and Georgia, and onward to Turkey and Europe — has seen sharply increased investment and traffic. The Zangezur Corridor through the South Caucasus is gaining strategic importance. Central Asian states that once relied on Russian rail as their primary export route are actively diversifying toward Southern and Western alternatives. Kazakhstan, in particular, is developing its own rail infrastructure to bypass Russian bottlenecks and capture transit revenue that once flowed through Moscow.
Even China, Russia’s supposed strategic partner, is hedging. The logistical weaknesses of the Russian network have strained the Sino-Russian economic relationship, as Chinese exporters and importers demand greater reliability than RZD can currently provide. Beijing is quietly expanding its investment in the Middle Corridor and other routes that avoid Russian territory entirely.
The trajectory of Russia’s railway and industrial collapse has notable historical parallels — and they are not encouraging.
Analysts have drawn comparisons to Iran after the 2012–2019 rounds of Western sanctions, to Venezuela following the post-2014 oil price collapse, and to Argentina during the era of capital controls. All followed a broadly similar arc: short-term economic stabilization through internal resource mobilization, followed by stagnation, chronic underinvestment, technological decay, and the hollowing out of industrial complexity in favor of raw material export dependency.
Russia is following this arc with one critical difference: its territorial scale provides a longer delay before collapse becomes visible in macro statistics. The sheer size of Russia — its eleven time zones, its enormous domestic market, its massive energy reserves — means that deterioration can be concealed for longer than it could be in a smaller economy. But concealment is not prevention. The physical contraction is real: cement production down 8.7 percent, steel down 15 percent, bricks down up to 13 percent, automobile output down 42 percent, railway freight down nearly 10 percent in 2025 alone. These are not the statistics of an economy in temporary adjustment. They are the statistics of structural deindustrialization.
There is a further complication that distinguishes Russia from the Iranian or Venezuelan precedents: Russia lacks the self-sufficient technological base that might allow a form of autarkic stability. Iran, for all its difficulties, built a significant domestic industrial and technological capacity behind sanctions walls. Russia has not.
By 2025, approximately 67 percent of all equipment installed in Russian factories is foreign-made — predominantly Chinese. “Import substitution,” the Kremlin’s declared industrial policy since 2014, has in practice become import substitution theater: replacing European and American components with Chinese alternatives that are often inferior, more expensive, and themselves dependent on global supply chains that sanctions can threaten.
Where does the Russian railway system go from here? Four broad scenarios can be outlined, ranging from stabilization to catastrophic collapse.
The most likely near-term scenario is a continuation of managed decline — the state channels sufficient fiscal resources into RZD to prevent outright bankruptcy, the network shrinks in effective capacity and coverage without formally collapsing, and the military continues to receive its logistical priority while civilian freight stagnates at low levels. In this scenario, Russia’s economy does not crater dramatically in a single event, but continues its slow deindustrialization, with single-industry towns in coal and metal-producing regions experiencing progressive economic collapse even as aggregate national statistics remain superficially stable.
The government may attempt a more aggressive intervention: restructuring RZD’s debt onto the state balance sheet, conducting the planned IPO to raise some external capital, selling subsidiary assets like FGC, and attracting Chinese investment in exchange for preferential freight contracts. This could temporarily stabilize the financial position but would not address the underlying structural problems of sanctions, locomotive shortages, labor deficits, and declining industrial demand.
A more optimistic scenario involves Russia succeeding in a genuine deepening of its rail partnership with China — attracting Chinese technology, capital, and even rolling stock manufacturing to modernize eastern corridors, in exchange for guaranteed coal, grain, and timber export flows at favorable prices. China has the locomotive manufacturing capacity and the infrastructure expertise. But Beijing would drive a hard bargain, and Russia would effectively be accepting a dependent, colonial-style economic relationship with its neighbor. This scenario stabilizes the railway but at a profound geopolitical cost.
The most alarming scenario — and not an implausible one — is cascading collapse in which the railway crisis triggers broader industrial and social failures that the state cannot contain. If locomotive shortages worsen to the point where coal cannot be transported from mines, those mines close. If steel cannot be moved, metallurgical plants reduce output or shut down. If construction materials cannot be delivered, housing completions fall further, creating a real estate sector crisis on top of the industrial one. If the military’s logistical supply chain degrades sufficiently to affect operational capacity at the front, there are direct national security consequences that would likely force an emergency state response — possibly including the requisition of civilian freight infrastructure, which would further devastate the commercial economy.
The crisis of Russian Railways is not a story about trains. It is a story about the sustainability — or lack thereof — of the entire Russian economic model under wartime conditions.
RZD is the circulatory system of the Russian economy. When 300,000 wagons sit idle, when 200 trains are cancelled daily for lack of drivers, when freight volumes fall to levels not seen in more than twenty years, when investment is halved and debt has tripled, the message is not obscure. Russia’s economy is physically shrinking. The military-mobilization economy is consuming resources, labor and capital that would otherwise sustain civilian production, and the civilian economy is contracting in response.
This contraction does not primarily show up in the GDP figures that Moscow publishes, figures that capture military production at inflated wartime prices and can be massaged to suggest stability. It shows up in the silence of railway sidings, in the empty cement factories, in the single-industry towns where the coal trains no longer run. As one analyst has observed, by 2025 Russian railway freight statistics have become a more accurate barometer of the country’s economic reality than anything the Russian Central Bank or Rosstat publishes.
Even in the event of a ceasefire or eventual peace settlement in Ukraine, a full recovery of Russian Railways would take years — perhaps a decade or more. The cumulative damage from underinvestment, labor attrition, technological isolation, and structural congestion will not be reversed quickly. Infrastructure takes years to build and days to damage. Skilled workers take years to train and months to lose. Trust from freight customers, once shattered, takes time to rebuild. And the geopolitical redirection of Eurasian logistics — the rise of the Middle Corridor, the hedging of Central Asian states, the circumspection of Chinese partners — will not simply reverse itself when the shooting stops.
The Russian railway system once symbolized imperial ambition — a steel thread stitching together the world’s largest nation, connecting Siberian resources to European markets, projecting Russian power across eleven time zones. Today, it symbolizes something else: the widening gap between Russia’s self-image as a great industrial power and the increasingly difficult reality of an economy grinding to a halt, one empty wagon at a time.