The new toll system
“Platon” is the name of the automated system for collecting tolls on federal roads. It was introduced in Russia on 15 November 2015. The Government justified this measure by the damage caused to public highways by heavy goods vehicles. The name “Platon,” which literally means “toll per tonne,” does not reflect the system’s true purpose. Practically, everybody pays the same: there is only the lower 12-tonne limit, while the final amount depends on how many kilometers the truck travels on federal highways. The funds collected are meant to be transferred to the federal road fund and cover the maintenance and construction costs of federal roads.
It was decided that private businesses should implement the project. The Rosavtodor (the Federal Road Transport Agpency) entered into an agreement with the private company RT-Invest Transport Systems, which deals in “modernizing” haulage. A dollar billionaire, Arkady Rotenberg’s eldest son Igor, owns 23.5 percent of that company. Another 19% belongs to Andrei Shepelov: his businesses are monopolists in the collection, sorting and disposal of waste in Tatarstan and throughout Moscow. The Rostec state corporation owns 25.5% in RT-Invest, while the largest stake of 39.9% belongs to Sergei Skvortsov, who just a few years ago served as a deputy and advisor to Rostec’s director. As is well known, Russian tanks, artillery, multiple rocket launch systems (MRLS), engines, ammunition, fire arms and electronic warfare systems are manufactured at Rostec plants. Hence, a system designed to manage and automate the collection of tolls to be spent on road construction has been linked directly to the country’s biggest military-industrial entity.
Initially, it was planned that truckers would be charged 3.73 roubles for each kilometer of the federal road once the system was launched. Non-payment would be subject to fines. At that time, as well as now, an administrative fine for a driver and/or a vehicle owner was 5,000 rubles for the first violation and 10,000 rubles for a repeated one (under Article 30 of the Code of Administrative Offences of the Russian Federation).
However, in the face of drivers’ discontent, the government introduced a discount coefficient, and until March 2016, the tariff was reduced to 1.53 roubles per kilometer. This price, too, proved prohibitive for independent truckers. Amid the coronavirus crisis, the Association of International Trucking Hauliers petitioned the authorities to suspend Platon; however, the Ministry of Transport deemed the tolls “a small burden” for both the truckers and the industry as a whole.
Protests by truck drivers
The launch of Platon was followed by protests organized by heavy truck drivers across Russia, beginning as early as 11 November 2015. Truckers demanded that the system be discontinued altogether, which, in their view, would do nothing but “finish off SMEs.”
The protests were largely spontaneous, with different tactics of resistance used in different regions. For instance, on the M4 “Don” federal highway, drivers blocked the road’s right lane completely. Traffic police officers tried to disperse the participants of this unauthorized protest, but there were too many vehicles. On the M51 Novosibirsk-Omsk highway near Tolmachevo airport, some 300 trucks lined up on the side of the road. In Chelyabinsk, around 100 truckers walked back and forth across a pedestrian crossing for an entire hour, blocking the way for cars. Meanwhile, heavy truck drivers in Perm deliberately drove at a snail’s pace, causing a massive traffic jam. This list is by no means exhaustive, but it gives a clear idea of the protest’s nature.
Some long-haul truckers from Dagestan (formerly one of the most active protest regions) decided to march to Moscow and launch a permanent strike. This information surfaced on November 27, and by December 3, some 20 vehicles arrived at a truck parking lot in the town of Khimki, near Moscow. St. Petersburg truckers attempted a similar strike on the M-10 highway near Zelenogorsk but failed to gain a foothold there. Upon learning of the camp of the Khimki Forest defenders, some drivers drove off to Moscow. This is where one of the most notorious stationary protest camps emerged and lasted for several months.
The next milestone in the truckers’ protest against the Platon system came about in late March 2017, shortly before Platon tariffs were raised even higher. Truckers set up camp right on the Moskovskoye Highway in St Petersburg. There were also trucker strikes in Dagestan, Karachay-Cherkessia and North Ossetia. Hundreds of trucks were camped near Yekaterinburg, Volgograd, Krasnoyarsk, Petrozavodsk, Ussuriisk, Ulan-Ude, and the Saratov and Murmansk regions. In total, more than 50 regions took part in the protests.
The truckers failed to have Platon done away with, yet the government had to make some compromises. The tariffs were reduced by half – from 3.73 roubles to 1.53 roubles per kilometer.
As of today, Platon has been operating in Russia for eight years. Its tariff rate has been indexed and increased multiple times. On February 1, 2023, the rate was again adjusted by 30 kopecks. As a result, the rate per kilometer on a federal highway has increased from 2.54 to 2.84 roubles.
“We didn’t stand our ground; we adapted”
Here are two views of truck drivers, Andrei and Alexey.
Andrei Bazhutin, one of the leaders of the truckers’ protests of 2015 and 2017 says: “The aim of the Russian transport business, or rather of its managers — that is, the Ministry of Transport and other state agencies — was to copy and try out the ideas from Europe. Anything that was introduced there had to be brought in here as well. The ‘Platon’ system is the same as the Toll Collect system. But the European market is totally different from ours, even though they are close and overlap… Europe is small; it has numerous countries, each trying to protect its market, transport operators and roads; hence they started to introduce tolling. In Russia, however, this system did not make any sense.”
According to Andrei, there were very few cross-border operators in Russia to begin with, which placed the whole burden on the local market. The local market, however, received no support but instead was decimated. The emergence of the Platon system aggravated the existing precarious situation, where the cost price of transport had long ceased to include profit and margin, leaving nothing but the overheads.
Alexey, a trucker says “At first, I worked as a hired intercity trucker or locally, then I got fed up with it all and decided to start working for myself”. “Those in this business tried to talk me out of it for a long time. They said the good times were over. But I didn’t listen to them, so I bought an old Kamaz trailer and started trucking. The first two or three years of being self-employed were my best. At the time, I felt I was right, and people were talking rubbish. But then, yes, every year, things were going downhill. Spare parts and fuel kept rising while the haulage prices didn’t rise. The bottom line is that there’s less and less money left for you.”
Alexey says he has not been personally affected by Platon. Like many other independent truckers, he found a way around it and didn’t even register in the system: “I guess everyone who stayed in the market has found a way to bypass this tax. There are many ways: there are GPS blockers that make it impossible to charge your vehicle when you drive under the ramp, and there are flip-up license plates that stop the cameras from reading your license plates. There are all sorts of ways.”
Nonetheless, Alexey was an active protester. The fear was not about the burden this innovation would place on the drivers; it was the enormity of the injustice: “Are we going to let them do this to us again! But eventually, we didn’t win anything. Then again, we couldn’t really beat the system with so few participants.”
The truckers are of the common opinion that only large companies can afford to pay this tax painlessly, those operating in a completely different framework, for instance, if they put this tax into the cost of transportation.
“Judge for yourself,” says Alexey, “I usually commute between Ryazan and Moscow and the region. Depending on where I go, I would be paying anything between 1000 and 1500 per haul — with the 20,000 rubles I earn for the whole trip. Some might say: that’s nothing! Yes, I can’t say it would immediately ruin me and my business. It would just make things harder for me. I need spare parts and petrol; I have to pay business and transport tax of 35 thousand…” Platon would simply be another burden, making my already complicated business even more difficult.” He sums it up: “I have not paid, I do not pay, and I won’t pay it! Besides, I don’t believe this money is used for anything good or useful. At this level of corruption? I haven’t noticed the roads improving over the years either!”
In 2015, the active stage of the protests resulted in a small initiative group of truckers meeting with the then Minister of Transport, Maxim Sokolov (now Vitaly Saveliev occupies the post). Sokolov declared at the time that abolishing Platon was out of the question, but in return, he promised there would be data on where the funds collected through the system are allocated. Yet, no report has ever been published in all the eight years that have elapsed.
Andrei Bazhutin says that even before the arrival of the Platon system, the haulage business was already dominated by large companies, now the smaller businesses are being forced out, by increased operating costs: “Platon simply buried it. At the time of the protests, I traveled extensively around the country, talking to truckers and people taking an active civil stance… What is my point? Practically none of these people are in the market anymore!
Bazhutin himself has been in the haulage business since 1991. At first, he used to hire vehicles; then, he officially opened his own business in 2004. At the best of times, his fleet totaled seven vehicles. “The truth is that each year, I began to notice that the turnover seemed to increase, but the profits were growing smaller and smaller. Naturally, I was against the introduction of the Platon system.”
Being actively involved in the protest movement made him put his two remaining vehicles up for sale in 2016.
“This happened mainly for political reasons. I was constantly pulled over while driving a car; they kept saying my license plates were reportedly stolen. The traffic cops would just pull me over, spend a long time talking to me, asking me questions, and making phone calls to someone, and there were repeated arrests on top of that. So I realized that driving a large truck would be impossible if I had such trouble driving a passenger car. I kind of accepted right away that my business was dead. I did not leave the market, though — I still had to make a living. I simply went to work as a hired driver for some friends of mine. That is how I worked until 2021 before I left the country. Now, in Canada, I make my living repairing American trucks.
“Everyone is toiling away, but there are no profits”
The ATI.SU freight exchange conducted a survey in December 2022: “More than half of the truck drivers (56%) admitted that they were barely surviving, and only one-fifth (21%) believed that the situation had improved over the second half of the year. However, there are some optimists: 14% of respondents had a stable performance throughout the year, and 7% could reap some benefits from the crisis by expanding their business and increasing revenues.”
“The economy has really sagged. I mostly transport construction materials to private sites, but after the 24th, construction works somewhat stopped, so there has been little to deliver. The prices of spare parts spiked enormously. Then it pulled back a bit, but the price is still pretty high, and the fuel has increased significantly. Obviously, there are now fewer bookings and less cargo,” says Alexey.
Since March 19, new guidelines for the average cost of spare parts, materials and labor hours came into effect, used to calculate CMTPL (compulsory third party liability) insurance claim payments.
According to Evgeny Ufimtsev, President of the Russian Union of Motor Insurers, the average cost of spare parts rose by 19.5% against March of last year: “Despite some stabilization concerning available spare parts in repair shops, we still cannot go back to last year’s prices,” he added. Most affected are the owners of cars of those brands that have either withdrawn from the market altogether or “suspended” their operations temporarily. In this case, the price increase can be as high as 45%. Doors are considered the most expensive parts. Bonnets, bumpers, optics and windscreens are up by 60%.
“The freight market is taking a severe blow due to many economic and, most importantly, political developments. Just like the banking industry. The only difference is that bankers have a lot of money, while freight operators don’t,” says Andrei Bazhutin. “Whatever they may be telling us about railways, everything that’s imported into this country is imported by trucks. At some point, Putin’s pal Rotenberg attempted to shift freight traffic to Russian Railways, but he failed. The railway is not advanced in Russia. There’s the Trans-Siberian Railroad, which isn’t very fast, and the unfinished BAM railroad. Basically, that’s it.”
The withdrawal of key players from the truck market — such as Scania and Volvo — has been one of the most painful effects the war has had on the haulage industry. “Those vehicles used to be manufactured in Russia — not anymore. Right now, Sitrak is attempting to take over the market… Let’s put it this way: it’s the Chinese version of the German Man. So people buy even these vehicles, trying to hustle out even in these dire economic straits. Many people reassure themselves: yes, the prices are up, but they seem to have stabilized somewhat. But it only looks this way. I know folks with both small and large fleets… They all have one thing in common: they all toil away, but there are no profits, only overheads,” concludes Bazhutin.
Another essential feature of the Russian freight trucking market is that it used to live off big government projects: the Sochi Olympics, the Western High-Speed Diameter toll motorway, bridges, roads, and oil rigs. “We all took stuff there and made good profits. Sanctions have destroyed the national-projects market, too; they are gone; besides, now everything is geared towards the war. And yes, some people take an active part now; they take construction supplies to Donbas. I understand people need to support themselves, but I can’t support this!”
Mr. Bazhutin also says that all the truckers agree that the volume of freight has shrunk drastically: “I’m not saying that there is no freight at all, just that there is very little of it. And the freight rates are not just going up; they dropped down.”
Let’s take the following example to get an idea of how little work there is now.
“I move construction materials and mostly pick up cargo at the iron and concrete plants in Ryazan, where a few of them exist.” — says Alexey. “In good times, during the peak season, I would spend lots of time queuing. For each loading area, there used to be lots of vehicles. Now, in spring and summer, the peak season, I gather that there are only half as many trucks. As for the winter or autumn, now it’s about a third of what it used to be. Now you come to the plant, and there’s no one around! At such moments, you’re just happy you were lucky enough to find a job at all — others, apparently, were not so fortunate if there are only two or three trucks next to you.”
There used to be many imports. Machine tools, equipment, agricultural machines — Russia produces none of those things itself. Consequently, it was small and medium businesses that were hit the hardest. The independent trucker is no longer there; instead, there is a monopolist in the form of a major player. No, I am not saying that no small businesses are left. There are just very few of them, and they barely survive. But people still need a livelihood; people still need to work! You see, many of them put their whole lives into it. They always did the job well. And they do not know how to do anything else!”
“I wake up, and my first thought is: there’s a war going on”
“Perhaps the biggest disappointment is that some of those people who fought with us against the Platon system and the general injustice volunteered to go to the front and fight on Russia’s side. Others merely support this war and tell me that they in Rostov-on-Don have a better sense of what’s going on there than I do in Canada,” says Andrei. “A distant relation of mine volunteered for this war. And, paradoxical as it may sound to the pseudo-patriots, he was disillusioned by what he saw. I’ve always accepted people of other views as friends, too. Well, it’s foolish to shut yourself off and only be around people who think the same way. Otherwise, one will start acting like Putin sooner or later. So, unfortunately, I feel like most people (in Russia?) support this war without fully realizing what it is they are condoning!”
“A week into the war, I made a sign on the board: I wrote ‘no to war’ and drew two peace signs. I drove around like that for quite a while, for about two months. Then I got stopped on the road and was fined 30 thousand rubles for discrediting the Russian army,” Alexey sums up. “The motherland is, on the one hand, the place where you were born. On the other hand, it is where you feel you belong. But I do not feel like I belong here anymore. And I no longer have a motherland either. I would gladly leave this country, but my family situation makes it impossible. I cannot change things; I can only express my position and opinions. I still wake up every morning, and my first thought is: there is a war going on. A horrible, pointless war made up of nothing but war crimes. Platon seems irrelevant.”
However, in March 2022, there was an appeal to the authorities to set a two-year moratorium on tariff adjustments. A draft law on suspending Platon and eliminating highway tolls, submitted to the Duma at the same time, was debated in May and gained no support. All in all, one cannot say that the war Russia unleashed in Ukraine seven years after Platon was introduced has crushed the haulage industry. Businesses still need to move all sorts of freight, though the situation for truckers whose work is unrelated to the needs of the “Special Military Operation” has gotten worse than ever. Big-truck drivers struggle to survive, while businessmen like Igor Rotenberg and the rest of those who rip the benefits off the Russian regime shine in another Forbes list, while the state-owned Rostec corporation boasts about their growing output of missiles and tanks. Many stay strong and continue the business in which they have invested their life. The real question is if this business can still put food on the table today.