Ukraine loses €155 million per day due to blocked ports

Odessa, Ukraine (PortSEurope) April 25, 2022 - Ukraine loses €155 million per day due to blocked ports, according to Ukrainian media. All the country’s Black and Azov Sea ports are not operational. Ukraine, one of the world’s biggest grain and metals exporters, became a landlocked country after Russia blocked the Azov Sea and closed all Ukraine's Black Sea ports following its invasion of February 24. In 2021, Ukrainian Black and Azov seas ports handled 145.5 million tonnes of cargo, according to Forbes Ukraine magazine. Today, the combined efforts of Ukraine’s railway and road transport can handle only about 19 million tonnes. The three ports on the Danube River, that are free and operational, processed 5.3 million tonnes in 2021 and can handle over 4 million tonnes today. In other developments, Russian missile strikes hit again Ukrainian Black Sea ports of Odessa and Mykolaiv/Nikolaev on the left side of the Yuzhnyi Bug River in early April. Artillery shelling against the Azov Sea port of Mariupol has continued for almost two months. Azov Sea’s port of Berdyansk is still occupied by invading Russian armed forces. On April 3, Russian missiles destroyed fuel storage facilities and damaged a refinery near Odessa in an escalation of the process of Ukrainian ports' destruction during the invasion. The city of Mariupol is over 80% destroyed, according to Ukrainian media. Port of Mykolaiv is heavily damaged after March 22 shelling. A free Mariupol and Odessa prevent Russia from establishing a land corridor to the Moldova’s breakaway region of Transdniestria, occupied by Russia 30 years ago. Also, a free Mariupol prevents Russia from establishing a land corridor to Ukraine’s Crimea, occupied by Russia in 2014. Connecting Crimea and Transdniestria to Russia, as well as depriving Ukraine from access to the sea, seems to be the new goal of Moscow. The Danube & Inland Ports Kiev can still use Danube River for water transport towards Europe. Until the re-opening of the Black Sea for shipping, Ukraine’s Bilhorod-Dnistrovskyi (Belgorod-Dnestrovsky) Commercial Sea Port is to function as a transport and logistics centre (TLC). The port is located in close proximity (120-200 km) to the country’s three operating ports on the Danube River – Izmail, Reni and Ust-Dunaysk. Before the Russian invasion, more than 70% (worth about $47 billion a year) of Ukrainian exports went country’s sea ports. Until 2014, Mariupol port handled some 15 million tonnes of cargo a year. After the Russian occupation of parts of Donbas region os Eastern Ukraine, the port’s turnover was reduced by a factor of three times. Just before the February 24 invasion, the port was looking at processing over 7 million tonnes of cargo in 2022. The Kherson port (Black Sea) handled about 3 million while Berdyansk port (Azov Sea) was processing some 2 million tonnes of cargo before the Russian invasion. In the past few days there are indications that Russian occupying forces are resuming Berdyansk port’s operations. The largest Ukrainian ports in the Black Sea, that handled more than 85% of country’s sea freight, remain under the control of Kiev - Mykholaev, Olvia, Odessa, Chornomorsk and South (Pivdennyi, Yuzhnyi). The war created opportunities for growth in three small ports at the mouth of the Danube. These are the only three ports out of 13 that Ukraine has, that are fully operational, but in peacetime, they accounted for only 5% of exports. Now they can carry the same cargo volumes as in peacetime, but the export potential of the Danube River is huge. It all depends on the railway infrastructure. If the railway is improved and renovated, this is a way for Ukrainian commodities to reach Romania Black Sea port of Constanta. Through its land border and the river ports, Ukraine will be able to export up to 7 million tonnes of cargo per month. But this is not enough - in March for example, only 415,000 tonnes of grain were exported (by railway), which is 79% less compared to the same period last year. Polish ports can take over some of the Ukrainian exports, but they do not have much spare capacity. Romania’s Constanta is already overloaded and is also with outdated railway infrastructure. Bulgarian Black Sea ports of Varna and Burgas have spare capacity and good intermodal infrastructure but are further away from Ukraine. And the ports in the three Baltic states, despite being smaller, can also be used. One palliative solution of the grains and metals export problem is for Ukraine to start processing the commodities in the country and export finished products, which are smaller and more expensive. But the war creates additional difficulties to such an approach. The problems with Ukrainian commodities export is an opportunity for neighbouring ports – according to experts, they can earn up to $50 per tonne of Ukraine’s grains and metals. Cargo turnover of Ukrainian ports in 2021 (in million tonnes): Pivdennyi (Yuzhny, South) 53.5; Mykholaev (Nikolaev) 29.8; Chornomorsk 25.6; Odessa 22.5; Mariupol 6.8; Olvia 5.1; Berdyansk 1.6; Herson 0.5; Izmail 3.9; Reni 1.4; Ust Dunayisk 0.06. More PortSEurope news about the Ukrainian crisis Copyright (C) PortSEurope. All Rights Reserved. 2022.

Ukraine loses €155 million per day due to blocked ports

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