How to stimulate shipping in Ukraine to not depend on transit through Poland

The current situation on the Polish-Ukrainian border forces the Ukrainian government and businesses to seriously consider alternative logistic export routes. The best alternative is transportation through Ukrainian sea and river ports. Read more about whether the Ukrainian government is doing everything necessary to create new, reliable logistic routes through sea and river ports in an article by Serhii Nedilko, the law firm Ilyashev and Partners (the Odesa office head) - Black Sea and Danube alternatives: how could compensate for the border blockade with Poland.

With Russia's final withdrawal from the Grain Initiative, Ukraine has quickly managed to find a formula for stable and safe navigation to the ports of Odesa. Of course, the Military Maritime Forces (MMF) play a crucial role in this process, jointly with border guards, the Maritime Search and Rescue Service, and the Administration of Sea Ports, implementing the passage regime to these ports through the north-western part of the Black Sea, also known as the Ukrainian corridor. The Ukrainian corridor operates only for commercial vessels of civilian shipowners and does not impose any restrictions on the types of cargo, except for military ones.

The Ukrainian corridor, during its operation period, has shown extraordinary efficiency. According to the Ministry of Infrastructure, the latest data show that since August 2023 (start of the corridor), 894 vessels have used it, transporting nearly 27 million tons of cargo, including about 19 million tons of Ukrainian agricultural products. Despite the success of the Ukrainian corridor, the development of ports in the Danube cluster has been and remains one of the development priorities.

Since the full-scale invasion, cargo handling volumes at the ports of Izmail, Reni, and Ust-Danube increased by 2, 6, and 12 times respectively. The Ministry of Infrastructure plans to establish new routes to European ports on the Danube to help minimise cargo flows through Ukraine's western borders. The Ukrainian Danube Shipping Company (UDSC) is actively working to ensure uninterrupted export.

This is a state-owned shipping company that provides maritime and river transportation. UDSC offers container delivery to Danube ports in Bulgaria, Serbia, Hungary, Slovakia, Austria, Germany and Romania. Businesses hope that the state will continue to work towards increasing the logistical attractiveness of Danube ports, including by introducing discounts on port fees, reviewing tariffs for railway transportation to the port of Izmail, and creating alternative railway routes across Moldova.

It is extremely important for the entire port industry to resolve "eternal" issues related to the development of a fair and economically justified methodology for calculating port fees, as well as to pass a law on construction on water fund lands. Instruments for state compensation also need improvement. The budget for 2024 includes 2 billion UAH for damage compensation caused by Russia's armed aggression to shipowners and charterers, but the payment procedure is practically not operational.

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