HOW BUSINESS COMMUNITY RATES TRANSPORT AND LOGISTICS IN UKRAINE

Transport and logistics in today's Ukraine are not just infrastructure, but a test of economic stability, the effectiveness of government policy, and the ability of businesses to invest during wartime.

Which industries have weathered the storm, where have reforms been successful, and where do issues persist? We discuss this with MARYNA SHARAPA, Partner at Arzinger Law Firm, based on analytics from the European Business Association's Infrastructure Index.

TEN YEARS OF INFRASTRUCTURE CHANGES

Last year's Infrastructure Day was truly significant. Firstly, it was the tenth anniversary event of the European Business Association. Secondly, it provided an opportunity to look at the development of Ukraine's transport and logistics infrastructure in the dynamics of an entire decade rather than in a snapshot.

It is important that part of the survey questions remain unchanged from year to year. This allows us not only to record the current state of affairs, but also to build comparative analytics: to see how business assessments are changing, where progress is being made, and where issues remain chronic. It is this long-term perspective that provides the most honest picture of the industry's transformations – without emotion, but with clear figures and trends.

OPERATIONAL ACTIVITIES IN TIMES OF MILITARY RISK 

In the context of full-scale war, investments are no longer just an indicator of development. They have become a marker of confidence in the future. If a company invests or plans to invest, it means that it sees prospects, is ready to take risks, and to remain in Ukraine.

Obviously, the study sample does not cover the entire Ukrainian business sector, but it is sufficiently representative of the transport and logistics sectors. Importantly, the behaviour of this business does not differ significantly from general economic trends.

The results of the 2025 survey are indicative. When asked whether the company continues its operations in conditions of military risk, 77% answered in the affirmative. Another 6% were forced to suspend operations but later resumed them in full, 13% resumed operations partially, and only 4% of the companies surveyed are currently not operating.

KEY CHALLENGES FOR THE TRANSPORT AND LOGISTICS BUSINESS 

The top 6 challenges for 2025 have remained virtually unchanged from the previous year, and this is telling in itself. Personnel shortage remains the main challenge, a factor that systematically affects not only logistics but also Ukrainian business as a whole. This confirms once again that the transport sector is no exception; it operates under the same conditions as the economy as a whole.

Businesses cite the limited operation of maritime terminals as the second most significant challenge, as stated by 43% of respondents. The reasons are obvious: regular shelling, security situation, and general instability in the Black Sea region.

Damaged or destroyed property ranks third. This factor was mentioned by 40% of the companies surveyed, and it directly affects both operational activities and business investment decisions.

For maritime transport, the danger of navigation remains a critical challenge, with around 40% of responses. On top of this, there's the rise in logistics costs and the power shortage, which are about as important.

In fact, all these risks are concentrated in one range – around 40%, which indicates complex pressure on the industry. Businesses have to deal with personnel, infrastructure, security and energy challenges all at once. And it is precisely the ability to balance between them that determines the stability of logistics companies today.

IS BUSINESS READY TO INVEST IN DEVELOPMENT DURING THE WAR? 

This is one of the key questions of the infrastructure index, as it is not about supporting operational activities, but rather about investing in development – meaning long-term decisions that businesses make amid high uncertainty.

The survey results show that 64% of companies invested in business development in 2025. This is an extremely strong signal for wartime. At the same time, the structure of investments demonstrates a pragmatic approach. 57% of investors directed funds towards the modernisation of existing facilities, including infrastructure upgrades, efficiency improvements, and adaptation to new operating conditions. This indicates a focus on increasing resilience and optimising existing assets.

At the same time, 33% of companies invested in creating new capacities and new infrastructure. These are, without exaggeration, strategic investments – decisions that businesses make only when they believe in their ability to operate in Ukraine also after the war.

As a matter of fact, we see two parallel strategies: cautious modernisation on the one hand, and a choice in favour of growth on the other. Indeed, it is the combination of these approaches that currently forms the basis for the future restoration of transport and logistics infrastructure.

IS BUSINESS INVESTMENT OPTIMISM STILL THERE FOR 2026? 

Despite the ongoing war and high level of uncertainty, businesses are showing a fairly confident outlook for the future. 72% of the companies surveyed said they plan to invest in 2026, while 28% are not yet ready to do so.  

Again, the structure of planned investments shows the pragmatism of the business. 56% of respondents contemplate allocating funds to modernise existing facilities, so as to improve efficiency, upgrade infrastructure, and adapt to new logistics and security conditions.

At the same time, almost 41% of companies are considering investing in new capacity and new infrastructure. This significant proportion demonstrates the willingness of businesses not only to maintain their positions, but also to expand even in difficult conditions.

RAILWAY INDUSTRY: HOW BUSINESS ASSESSED THE CURRENT SITUATION AND PROSPECTS

After the general set of questions, the survey logically moves on to an industry-specific section, covering rail, sea, and road transport separately. This year, aviation was not analysed for obvious reasons. However, it was the rail industry that became the main outsider in the 2025 infrastructure index.

It is worth considering that the survey methodology involves identical questions for each sector, thus allowing to compare the results accurately. In the case of the railway, these results proved to be demonstrably critical.

The first block rated legislation and the implementation of state policy in the field of rail transport. Here, businesses were extremely harsh in their assessment: 86% of respondents rated it as low or very low. Only 8% rated it as satisfactory, and 6% rated it as mostly high. 

Another important indicator concerned attracting extra-budgetary investments to the industry. Here, the situation is no better: 70% of respondents consider the level of such investments to be low or very low, while another 24% consider it to be merely satisfactory. This assessment directly correlates with the current financial and managerial state of the industry and the situation around Ukrzaliznytsia.

On a separate note, businesses assessed the effectiveness of Ukrzaliznytsia JSC's operational activities – not in terms of state policy, but in terms of the company's work as an operator. Here, the picture is somewhat milder: 46% of respondents gave it a ‘mostly low’ rank, while 26% considered it satisfactory.

Another critical indicator is the state and development of transport logistics in the railway sector. More than half of businesses assessed it negatively: 47% rated it as low, and 15% rated it as very low.

The most interesting block was the final one – what exactly businesses consider crucial for the development of the railway industry. Here, the respondents' position seems quite unanimous. Change in tariff policy ranks first, as stated by 65% of companies. This does not refer to a mechanical increase or decrease in tariffs, but rather to the methodology and transparency of their formation, the structure of costs, and the logic of funds utilisation.

The second priority is opening up the private traction market, backed by almost 60% of respondents. The third is passing a new law on rail transport, which about 60% of those surveyed also said was needed. Incidentally, the issue of railway sector reform has been under discussion for over a decade, but no final decision has been reached yet, despite numerous draft laws, including those registered in the Ukrainian Parliament, and heated discussions with the business community.  

Another systemic request, supported by 56% of respondents, was to abandon cross-subsidisation of passenger transport.

Ultimately, the business community is sending a clear message: the negative assessment of the railway industry is not emotional, but logical and well-reasoned. It is directly linked to the lack of reforms, transparent tariff policy, modern legislation and real access to the market for private capital.

ROAD TRANSPORT: ARE WE SEEING POSITIVE DYNAMICS? 

While rail transport became the outsider in the study, road transport was its complete opposite. According to business estimates, this sector showed the most progress in 2025, particularly in the context of European integration.

This is not a subjective sentiment, but the result of systematic work: the majority of the European integration legislation developed to date relates specifically to road transport. Accordingly, the perception of the business community differs significantly from that of other industries.

In particular, 61% of respondents rated the legislation and state policy implementation in the field of motorways and transport as satisfactory or mostly high. For comparison: in the railway sector, the same indicator has the opposite sign – and this is a very telling contrast.

However, there are areas where problems remain. Investment activity in road infrastructure is a weak point in the industry. Almost 60% of businesses rate it as low or very low. This applies both to the physical condition of roads and to the lack of large-scale private investment.

Before the war, Ukraine was preparing to launch concession roads and PPP projects. Unfortunately, the process has stalled, but it is important that the state intends to return to this topic. Currently, relevant research is being funded by the World Bank and other international partners, and international advisors are being brought in, laying the foundation for decisions in the post-war period.

In contrast, businesses assess the state and development of transport logistics in the automotive sector much more positively: almost 70% of respondents rated it as satisfactory or mostly high.

When it comes to key reforms necessary for the development of road freight transport, 63% of respondents consider the development of road infrastructure to be a top priority. The introduction of permanent visa-free travel for international freight transport enjoys the same level of support.

Businesses pay particular attention to market quality. 30% of respondents consider it essential to introduce the concept of carrier business reputation. This issue is directly linked to raising service standards, market competitiveness, and implementing European directives.

We can see that, according to market estimates, the road transport sector looks the most balanced and promising in 2025: with real achievements in regulatory policy, a positive assessment of logistics, and a clear understanding of what steps need to be taken next.

MARITIME TRANSPORT: HAS PORT REFORM BECOME A GROWTH POINT? 

Business assessments of maritime transport appear more balanced than those of the railway sector but are still controversial. 55% of respondents consider the legislation and implementation of the seaport development strategy to be satisfactory or mostly high, while 40% rate the process as low. The reasons for this polarity are clearly solid.

The maritime industry has undergone profound structural transformation over the past decade. A key reform was the separation of administrative and economic functions of ports: transshipment remained with state-owned commercial seaports (port operators), while management of strategic infrastructure was passed on to the Ukrainian Sea Ports Authority. Although only the first stage of the reform was implemented, it gave impetus to the development of private business in ports. Approaches to the second stage of the reform, in particular the prospects for introducing the landlord port model in Ukraine, have been the subject of numerous studies, including those conducted by advisors engaged by the World Bank. However, the issue of continuing port reform is not currently on the agenda.   

Essentially, the maritime industry has become an example of how institutional changes can trigger growth, even if only partially implemented.

At the same time, investment activity in the port sector is assessed by businesses as mostly low or very low. This is an objective assessment: military risks, physical damage to infrastructure and the lack of long-term financial incentives are holding back investments.

An interesting contrast is the assessment of the Ukrainian Sea Ports Authority's effectiveness. Almost 60% of respondents rated it as satisfactory or mostly high, despite numerous operational conflicts and criticism from the business community. This indicates that the industry distinguishes systemic problems from current management work.

The most urgent reforms for the development of maritime transport, according to businesses, are reducing port fees and cutting the USPA's profit deductions to the state budget, a stance shared by 62% of respondents. The reason is systemic: there is no methodology for setting port fees, their structure is opaque, and their targeted nature is not always adhered to.

According to the law, port fees are the main source of funding for port infrastructure and its development. At the same time, the USPA is a state-owned commercial enterprise obliged to pay dividends to the state budget. At various times, these dividends have ranged from 45% to 90% of profits and currently stand at 75% of net profits. Business consistently insists that these funds should remain in the industry, as the state of port infrastructure is already critical today, and the need for restoration will only grow. Business perceives the State's refusal to even consider a potential reduction in this percentage as a short-sighted policy. Port infrastructure will have to be restored – if not today, then tomorrow. And the USPA may simply not have the funds if this issue is not addressed now. 

Half of the respondents also consider the continuation of port reform to be a key condition for the sector's development. Significantly, in both rail and maritime transport, businesses repeatedly return to one topic – the need to create an independent transport regulator.

All transport sectors in Ukraine deal with natural state monopolies. Regulating tariffs and conditions of access to infrastructure is a classic function of a regulator. However, its creation has been blocked for years due to a number of unresolved issues, in particular t the regulator's independence: how to ensure it, who exactly the regulator should be independent from, etc. Constitutional restrictions remain an additional barrier.

Therefore, for now, maritime transport appears to be an industry with strong potential and unfinished reforms. Businesses see opportunities in it but are awaiting systemic solutions. Without these, port infrastructure risks losing its competitiveness at a time when the country needs it most.

KEY ACHIEVEMENTS AND FAILURES OF THE TRANSPORT INDUSTRY OVER THE LAST 10 YEARS 

The most revealing result of the study was the business community's answers to two questions: about the main achievements and biggest failures of the transport industry over the past 10 years.  

Among the key achievements, the business primarily cites the digitisation and liberalisation of road transport, in particular the introduction of visa-free travel for transport. In fact, most of the positive changes of the decade are associated with the automotive sector. Among the more systemic reforms is the adoption of the law on inland water transport, which was long in the making and became an important step for the industry, even despite the limited possibilities for its enforcement during the war.

Apart from that, businesses highlight the 'Great Construction' as an achievement in road infrastructure. Opinions on this process may vary, but the improvement in road conditions is undeniable. Another significant marker of the decade is the survival of the industry during a full-scale war. The preservation of operational activities, adaptation to energy constraints and staff shortages, and simultaneous investments in business development are considered separate achievements.

In the investment block, businesses note the gradual growth of the role of public-private partnerships, concessions and private investment in general. In particular, interest in the concession tender for the container terminal in Chornomorsk demonstrates the willingness of foreign investors to work with Ukrainian projects even in wartime.  Industrial parks and state support for large investment projects through the 'investment nanny' tools are also considered effective mechanisms.

Among the specific but important decisions, the business community mentions the one-time reduction in port fees, which was a positive signal to the port industry.

Overall, the business community recognises that, over the past ten years, the transport sector has not undergone systematic reform. However, it has acquired a number of tools and practices that could lay the foundation for recovery and growth, provided there is political will and consistency in government policy.

As for the biggest failures in the transport industry over the past 10 years, businesses unanimously point to the railway sector. This is not about individual decisions, but rather systemic inefficiency: the lack of profound reform, the preservation of cross-subsidisation, opaque tariff setting, and failed attempts to open up the market to private traction.

The key problem is a weak management model. There is no clear long-term strategy agreed with business, no independent regulator, and the State's institutional capacity to implement even declared changes remains limited. As a result, the industry has been in survival rather than development mode for years.

This imbalance is particularly noticeable against the backdrop of other transport sectors, where, despite the war, reforms have been implemented, private investment has been attracted and working tools for PPP have emerged. This is a signal for business: without a systematic approach and coordination between modes of transport, the railway will continue to operate in survival mode.

FOR REFERENCE:

The Infrastructure Index has been compiled by the European Business Association since 2020.

The survey rates the state of transport companies and their willingness to invest, legislation and implementation of state policy, investment activity, the state and development of transport logistics, the effectiveness of state bodies and transport monopolies, as well as key reforms and regulations in the railway, road, and maritime sectors.

The survey involved 47 experts from the Logistics Committee of the European Business Association and was conducted from 13 November to 8 December 2025. The law firms Arzinger and Sayenko Kharenko acted as partners in the survey.

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