Ports of Baltic states plan to attract more grain from Ukraine

2022/04/28 at 2:34 PM

The Government of Ukraine is continuing to consider new ways to export commodities from the country, primarily grain. In the second half of April, the seaports of three Baltic states expressed their readiness to handle more goods from Ukraine. Each harbour may additionally handle from 1 to 4 million tonnes of grain per year. However, to do this, all the Baltic ports must tackle one crucial issue.

“Everyone is interested in helping the country, which is being ruined by the aggressor,” said Algis Latakas, general director of the Klaipeda State Seaport Authority, during his meeting with Mykola Solskyi, Ukraine’s minister of agrarian policy and food, which took place earlier this week in Klaipeda. The Lithuanian harbour is ready to handle up to 1 million tonnes of Ukrainian grain by the year’s end. To this end, LTG Cargo, the national rail freight operator of Lithuania, has arranged a pilot shipment from Ukraine to Lithuania via Poland to bypass Belarus.

Kaunas Intermodal Terminal (KIT), source: Lietuvos Geležinkeliai

On Wednesday, 27 April, the test container train departed from the Kaunas Intermodal Terminal (KIT) towards Ukraine. In a couple of days, it is expected to return to Lithuania and deliver 50 containers loaded with various types of freight including grain. Around 1,000 tonnes of goods will be moved from Ukraine to Lithuania by using this pilot shipment, which will disclose all the advantages and obstacles of the new route. Moreover, the Lithuanian experience can be applied to the harbours of two other Baltic states, Latvia and Estonia, which are also eyeing the Ukrainian grain.

Expectations of Estonia and Latvia

Estonia is also interested in attracting some additional volumes of export goods from Ukraine to its ports. The country’s minister of economy and infrastructure Taavi Aas held some negotiations with the Ukrainian side. “We offered Ukraine our capacities, and I also suggested that railway technical specialists meet and discuss solutions for a bottleneck at the Polish-Lithuanian border so that more trains can pass,” he said to the local media. According to the Ministry of Economy and Infrastructure of Estonia, the country’s ports can handle up to 4 million tonnes of grain from Ukraine.

Grain terminal at the Freeport of Riga, source: Freeport of Riga Authority

Latvia, in turn, also can be a gateway for Ukrainian commodities. Therefore, Mykola Solskyi, the minister of agrarian policy and food of Ukraine, visited this Baltic state on 22-24 April. His counterpart, Kaspars Gerhards, presented the capabilities of three Latvian ports: Riga, Ventspils and Liepaja. In contrast to Estonia, Latvia did not unveil any expected flows of goods from Ukraine but the country’s government gave clear signs that the local harbours are ready to discuss the exact volumes, especially for the next marketing year, which begins on 1 July.

Main obstacles

Before 24 February, when Russia with support from Belarus invaded Ukraine, there was a well-developed network of rail freight connections between Ukraine and the Baltic states. All of them ran via Belarus due to the similar gauge in all countries. Since Ukraine and the European Union imposed sanctions against Russia and Belarus, this route has become closed for the Ukrainian shippers. Poland is expected to replace Belarus as a transit country on the way between Ukraine to the Baltics.

Grain terminal at the Port of Muuga in Estonia, (Tallinna Sadam)

However, there is a significant obstacle that hinders the development of alternative routes. It is the break gauge on the borders between Poland and Ukraine as well as Poland and Lithuania. Among the three states, Lithuania is in the most advantaged position since it has the 1,435-millimetre-gauge tracks from the Polish border up to Kaunas. This enables launching the direct train to the Ukrainian border stations (like Mostyska and Kovel) without any transhipments. To Mostyska or Kovel as well as from Kaunas to Klaipeda, the delivery of grain can be organised by using road transport.

As for Estonia and Latvia, they need two transhipments of grain: first at the Polish-Ukrainian border and then and the Polish-Lithuanian border. Of course, any additional operation cost additional money that eventually results in higher delivery costs. Meanwhile, there is one more issue: transhipment of grain from wagon to wagon is a more difficult process than in the case of containers. Grain is usually loaded into a wagon from above and unloaded from the bottom. Therefore, LTG Cargo will use containers for moving grain from Ukraine to Lithuania. Even in this case, there are limitations. Will be it efficiently? Let’s wait until LTG Cargo will complete its pilot shipment from Ukraine to the Kaunas Intermodal Terminal.

Related stories:

  1. Port of Gdańsk to handle additional 1-2 million tonnes of goods from Ukraine in 2022
  2. Four crucial challenges for Ukrainian export logistics
  3. Alternative logistics: Ukraine looks for new gateways to export its goods

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