Open appeal of the Ukrainian Business Council to the Verkhovna Rada of Ukraine and the Cabinet of Ministers of Ukraine
Regarding the organization of container transportation along the “grain corridor” route from the ports of Great Odesa.
At this stage, due to the strike, a significant amount of cargo accumulated on the Polish border. Despite the government’s efforts, the problem is not quickly resolved, and demonstrates our dependence on the Polish border. After all, even minor strikes lead to a collapse on the western border, and numerous negotiations show that the problem is complex. Russian influence on this situation is not excluded, and the Polish government does not contribute to solving the problem. In general, this problem is systemic and difficulties at the border were observed before, before this protest action by Polish carriers.
Since the concept of using the “grain corridor” has now changed, in particular, since mid-September, this corridor has been operating without the participation of Russia and without the need to agree on the list of goods and ships entering the port – it is worth establishing international container lines to the ports of Great Odesa for the transportation of finished Ukrainian products and unloading western border.
153 vessels carrying more than 5.6 million metric tons of grain and other cargo passed through the Black Sea Humanitarian Corridor of Ukraine from September to November 24, 2023.
If we establish international container lines on this route of the “grain corridor” and expand the list of products transported through this corridor with other goods with high added value, this will allow us to solve several important issues at once.
This will have a positive effect on the cost of logistics, improve the position of Ukrainian food and other goods on foreign markets, contribute to an increase in the total volume of exports, and it would also relieve the traffic checkpoints by more than half and reduce queues at the western borders, in particular, with Poland and the ports of Gdańsk , Reni, Konstanzi.
For example, before the beginning of the full-scale war, only confectionery and starch-molasses products provided a sufficiently powerful cargo flow (about 160 thousand tons) through the Odesa port, using sea container transportation. The situation is similar in other food industries.
Another example is the fishing industry. Taking into account the objective circumstances, about 90% of Ukraine’s needs for fish and seafood are met by imports. Fish and seafood occupy the first place among all imported food products in Ukraine. Before the start of the full-scale war, 40% of imports, which then amounted to about 420,000 tons, were carried out through Ukrainian seaports.
Currently, the volume of fish imports has decreased to 300,000 in 2022 and 320,000 in 2023 (forecast), and almost all of this volume is brought to Ukraine by road transport across the borders with Poland, since instead of Great Odesa, the main port for the fishing industry of Ukraine is the fish terminal of the port for the second year the city of Klaipeda (Lithuania). Since Ukrainian importing companies cannot export fish products intended for Ukraine due to Polish strikers, there is already a logistical problem in the ports of countries with access to the Baltic Sea (Poland, Gdansk; Lithuania, Klaipeda; Riga, Latvia, etc.) collapse and crisis. There is not enough space for new containers, ships are standing on the road waiting for freeing places for unloading. Delivery deadlines for other cargoes are disrupted. That is why, including the leadership of the countries of Lithuania and Latvia, they have already volunteered to help speed up the unblocking of the Polish-Ukrainian border.
Currently, products exported by sea go through Polish ports, which leads to an increase in the cost of logistics and negatively affects the competitiveness of Ukrainian exports. Compared to the pre-war period, such a bypass route increased the cost of transporting products by 45% – 100%.
This issue has already been raised before the Ministry of Infrastructure. In October 2023, the Deputy Minister of Infrastructure, Yuriy Vaskov, during the Coordination Council on Logistics in Rural Areas (which is periodically organized by the Ministry of Agriculture and Food Policy) noted that the current temporary “corridor” has no restrictions on the type of transportation, but there are currently no container lines. who would be ready to undertake such transportation and declared vessels for passage on this route. This possibility is being studied by the ministry, in particular, the ministry is in constant communication with carriers, work is being done on risks, guarantees and insurance, but there is no readiness yet.
It was agreed that within a month the Ministry of Infrastructure will organize a joint meeting with exporters and carriers to discuss the possibility of organizing container transportation from the ports of Greater Odessa. But as of now, for more than 1.5 months, this issue remains unresolved, the relevant meeting has not been held.
On November 16, at the regular meeting of the Coordinating Council on Logistics in Agriculture, the Minister of Agrarian Policy and Food M. Solskyi suggested that exporters independently negotiate with international container lines, but exporters will not be able to negotiate with container carriers on their own, since we are talking about working in a situation of increased danger and carriers are waiting for specific steps from the authorities (regarding insurance, guarantees, etc.)
In this regard, we call on the Cabinet of Ministers and People’s Deputies to intensify work with international container lines and to facilitate the acceleration of the launch (primarily through the provision of war risk insurance) of container transportation of products with high added value, in particular ready-made food products – to/from ports Great Odessa.
Best regards
Business associations
Members of the Ukrainian Business Council