Alternative logistics: Ukraine looks for new gateways to export its goods

2022/04/07 at 7:04 PM

Since the outbreak of the Russian aggression against Ukraine, this country has been facing many obstacles in moving its goods abroad. The biggest one is the sea blockade of the Ukrainian ports by Russia with warships and naval mines. The Ukrainian shippers are forced to search for new ways to export their goods.

First of all, the Russian blockade of the Ukrainian sea ports had a negative impact on the export of agri-food products. Tens of millions of grain were found themselves stuck at the elevators, in hopper wagons or at the maritime terminals. According to the preliminary and very approximate estimations, the delay in sending agri-food products to foreign customers costs around 1.5 billion US dollars monthly. The list of the largest importers of Ukrainian grain consists mostly, there are mainly African and Asian countries. All the supply chains had included the maritime delivery from the Ukrainian sea ports, which are currently blocked. What is the solution to address this issue?

Green corridors to Baltic Sea

The most obvious solution for the Ukrainian shippers is to find new ports for exporting their goods. In late March, the European Union expressed its willingness to assist Ukraine in redirecting its export flows to other transport hubs. To this end, the EU countries is considering an opportunity to arrange special routes for Ukrainian goods. “The European Commission is ready to organise such green corridors,” said European Agriculture Commissioner Janusz Wojciechowski in his comment to the Politico online newspaper. According to him, the mentioned corridors will enable Ukraine to export food via the Baltic Sea.

Grain terminal at Port of Gdańsk, source: Port of Gdańsk Authority

Polish ports

Before the Russian invasion, Ukraine had a well-developed network of railway connections to the Lithuanian port of Klaipeda. This corridor was very reliable as it uses tracks of the same gauge but it runs via Belarus. Since it supported Russia in its aggression, the truck and train traffic from Ukraine via this country was suspended. As a result, the nearest to Ukraine Baltic ports are located in Poland. Gdańsk and Gdynia, the largest harbours in the country, are ready to handle the additional volumes of grain and other goods from Ukraine. This is especially in the case of the Port of Gdańsk, which has been regarding the western part of Ukraine as its hinterland for many years.

Ukrainian grain hopper wagons, source: Kryukiv Railway Car Building Works

However, there is an obstacle to delivering the increased volumes of Ukrainian export products to the Polish ports. It is a lack of transhipment capacities at the railway border crossings due to the break of gauge between the countries. This has already resulted in the long queues of wagons with grain at the border stations. More than 10,000 wagons were accumulated at the western border of Ukraine and most of them are on the Polish-Ukrainian border.

To address the issue, the Ukrainian Railway commenced negotiations with its counterparts in neighbouring countries to simplify the customs proceeding. Moreover, the national railway undertaking is planning to develop the border crossing by constructing new transhipment areas and terminals. The Polish side also proposed an important project in this regard. “Poland is currently working on the creation of a dry port at the border, in order to increase the capacity for transporting the export of Ukrainian agricultural products, in particular to the third countries,” said Henryk Kowalczyk, Poland’s minister of agriculture and rural development, at the meeting with his Ukrainian colleague that took place on 5 April. The details of the project were not disclosed but it is certainly needed for both countries.

Grain terminal at Port of Constanta, source: Port of Constanta Authority

Port of Constanta

Besides the Polish harbours, the Ukrainian government is regarding other options for moving export goods. “We, together with partners, are looking for alternative logistics routes to send our cargo through European sea ports, including the Romanian seaport of Constanta. Furthermore, we are discussing the possibilities of rail transport, increasing the volume of transit traffic by truck,” said Mykola Solskyi, Ukraine’s minister of agrarian policy and food.

Meanwhile, the arrangement of export via Constanta needs to address the same issues as in the case of Poland, namely more transhipment capacities. The situation at the border between Ukraine and Romania is even worse as there are fewer terminals for reloading freight between wagons of different types. Despite what way Ukraine will choose as an alternative for its export goods, both options, Polish and Romanian, need significant investments in developing railway terminals at the border.

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