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Adjustment of PKP CARGO freight tariffs

Effective September 1, 2008, PKP CARGO SA is introducing an adjustment to its Freight Tariff. Rates for most services will change by an average of approximately 15 percent.

The changes will not apply to transit shipments or intermodal transport in domestic and international traffic. Tariff changes have become inevitable due to a significant increase in costs beyond the company’s control. In the first half of this year, rates for access to infrastructure increased by over 8 percent, traction energy prices by 12 percent, diesel fuel by 20 percent, and other materials by over 20 percent.

Despite these cost increases, PKP CARGO SA did not change its tariffs in the first half of 2008, thereby fulfilling its commitment to its customers. However, maintaining rates at an unchanged level in the following months of this year negatively affects the company’s financial performance. Adjusting rates to reality is also forced by the company’s business environment, which reacts to market price increases much faster than PKP CARGO. As of July 1 of this year, a new Regulations for the sale of freight transport services was introduced, which significantly simplifies relations with the customer. The price-setting mechanism is now more transparent. Provisions regarding the terms and requirements of concluded contracts have also been made more flexible. The introduced changes are the result of a compromise between the company’s business operations and circumstances beyond its control that cause price increases.