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  • Iryna Kosse: the only way to restore export to pre-war levels is to unblock Ukraines Black Sea ports

    18.05.2022

    Now Ukraine cannot solve it’s main logistics problem – export of grain – by means of rail or road transportation.  The only way to restore Ukrainian export to pre-war levels is to unblock Ukraine’s Black Sea ports.

    It was said by a senior researcher at the IER Iryna Kosse during the discussion “War impact on the economy of Ukraine: monthly assessments with a special focus on logistics issues”.

    According to the expert, russian troops have blocked almost all seaports. Currently 3 out of 13 sea ports that operated before the war, ship goods: Izmail, Reni and Ust-Dunaisk. The rest are either occupied or blocked. This creates a huge problem for Ukrainian exports.

    Correspondingly, all this flow is trying to be reoriented to rail and road transport, however here are some problems with this. Currently for rail transport only western border crossing points are operating, its workload has increased several times, but the capacity for all cargo to process is still insufficient. At the most popular border checkpoints the line of wagons has already reached 40 days. "Ukrzaliznytsya" has to introduce conventions (prohibitions) on carriage of certain goods in specific directions. However, even in the most optimistic scenario, the railway are able to export 1.5 million tons of grain per month, while there are already 20 million tons of last harvest and 35 million tons of future harvest of grain and oil (are expected to be produced for export this year. 

    land border crossings are also overloaded. The grain exports are forced to stand in lines and compete with traditional goods that were exported by road transport, as well as with the flow of fuel, humanitarian and military aids. The Ukrainian government has reached agreements regarding temporary suspension of the permit system with the EU countries: Latvia, Lithuania, Denmark and Estonia - by the end of the year; Italy, Greece, Hungary and Germany - until 30 June 2022; Bulgaria, Georgia, Slovakia and Austria - for wartime. Recently, an agreement with the Ministry of Infrastructure of Poland on cancelling transportation of fuel permits was reached.

    Regarding air transport, then Ukrainian airspace is closed and airports are suffering airstrikes. Ukrainian airlines operate abroad by providing their aircraft in a "wash leasing" (the aircraft together with the crew) or by transporting cargo to Polish airports;

    Therefore, due to the lack of capacity, rolling stock and unpreparedness of European carriers, networks and ports to our volumes, it is currently impossible to fully resume Ukrainian exports at the pre-war level.

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