The Ust-Luga Container Terminal (ULCT), one of Russia's key Baltic Sea ports, will permanently halt coal transshipment starting January 2026, redirecting operations toward mineral fertilizer handling, local media reported.

The move marks a significant pivot in response to the Russian coal industry's mounting crisis and the growing unprofitability of exports via northwestern terminals.

Coal handling at ULCT plummeted 43.5% year on year to 1.3 million tonnes in the first eleven months of 2025, while volumes of mineral fertilizers surged 2.3 times to 0.9 million tonnes.

The Port of Ust-Luga, which houses ULCT, recorded a 14% drop in total coal exports during the same period, falling to 33.1 million tonnes.

Transport expenses have accounted for up to 80% of the final price of coal exports, rendering shipments via northwestern terminals unprofitable.

Russian Railways' tariff policy aggravated the situation as a proposed 12.8% rail tariff reduction for Siberian coal routes to northwestern ports has not been implemented. Instead, a 10% indexation of the general freight tariff took effect on December 1, 2025.

While terminals in the south and northwest significantly lowered coal handling rates and railcar operators slashed rates to multi-year lows, the growth rate of rail tariffs, regularly indexed regardless of market conditions, often outpaces inflation.

This persistent imbalance is eroding the margins of coal producers, operators, and ports. In the long term, potentially falling cargo flows threaten the economy of the rail carrier itself.