Before the outbreak of the current war, at least 90% of agricultural raw materials were exported from Ukraine by sea. In 2021, 49.5 million tons of grain cargo was exported through seaports. Ukrzaliznytsia (UZ) exported 29.3 million tons of grain cargo, of which 28.7 million tons were sent to ports. The total volume of the UZ grain transportation in 2021 amounted to 33.7 million tons, Valeryi Tkachov, Deputy Director of the company’s Commercial Affairs Department, told .
Currently, Russia has blocked Ukrainian seaports. Only four ports on the Danube River are operating: Reni, Izmail, Kiliya, and Ust-Dunaisk. But these are low-capacity ports, providing only about 10% of the pre-war volume of transshipment.
Therefore, the issue of developing alternative ways of grain exports became acute. In addition to the Danube ports, this is exporting by land by road and rail across the western borders.
In March — April, exports by rail were carried out through the following main border crossings: Izov (Poland) — 24%, Uzhhorod (Slovakia) — 18%, Chop (Czech Republic) — 13%, Izmail (Romania) — 9%, Batovo (Hungary) — 9%, and Chop (Slovakia) — 6%.
At present, the UZ railway infrastructure includes 13 operating railway border crossings with Western countries, through which export-import transportation is carried out.
Per month, the potential capacity of transporting goods for export by rail is 102,660 wagons (approximately 6.6 million tons), including about 21,930 wagons (1.5 million tons) of grain cargo.
In fact, in April, the total volume of cargo transportation by rail amounted to 9.154 million tons, including 3.894 million tons for export. Transportation of grain for export for the month amounted to 638,000 tons, including 518,500 tons through the western border crossings.
To date, the actual average daily supply of goods of various types for export is 1,916 wagons (124,000 tons), or 55.8% of the potential throughput. Including 361 wagons (25,000 tons) of grain cargo, or 49% of the potential.
That is, the existing potential of border crossings is not yet used to its full capacity, Tkachov believes.
Five border crossings are used at 100% capacity, the remaining seven are loaded at 30-50%.
"Ukrainian business needs time to build new supply chains through all existing crossings. A separate and very acute issue is the unwillingness of foreign carriers and the railway infrastructure to increase the transportation of goods from Ukraine. There is a shortage of rolling stock (cars and locomotives for 1,435 mm gauge) and infrastructural limitations of the European railway infrastructure," Tkachov explains.
Ukraine and Poland intend to set up a joint logistics venture shortly. The corresponding memorandum was signed by Prime Ministers Denys Shmyhal and Mateusz Morawiecki in Krakow. In particular, countries agreed to work together to increase cargo transportation across the western border of Ukraine, solving technical and organizational problems: the difference in customs rules, the use of different routes, and the search for free rolling stock.
As for the capacities of Poland’s and Romania’s ports, by the end of 2021, 67.5 million tons of cargo were transhipped in the port of Constanta, of which 25.2 million tons were grain. The capacities of Polish ports: Gdansk (53.2 million tons), Szczecin-Świnoujście (26.7 million tons), and Gdynia (26.7 million tons). All ports of Poland transhipped about 107 million tons of cargo in 2021, including 8.2 million tons of grain.
The above-mentioned ports have a certain margin of strength allowing to increase transshipment volumes by working with Ukrainian grain, but they are overloaded and limited in their infrastructure capabilities.
In general, the ports of Poland and Romania will not be able to replace the ports of Ukraine in full, therefore, to ensure exports, one should pay attention to the ports of the Baltic (Klaipeda and Rostock), the Black (Constanta, Varna, and Burgas), the Adriatic, and the Mediterranean (Koper, Trieste, Rijeka, and Thessaloniki) Seas.
But using these ports will result in a significant increase in the cost of export logistics and, possibly, unprofitability of grain exports along these routes.
"In order to increase the capacity of border crossings, systematic work is required: developing existing transshipment terminals and constructing new ones; creating mobile transshipment points; increasing the number of narrow-gauge bogies and involving an additional wagon fleet of carriers on the narrow gauge; and simplifying border crossing procedures," Tkachov sums up.