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2M means to launch Ukrainian rail-river export service, despite ‘challenges of war’

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Herons Logistics

MSC, as part of the 2M Alliance, is to launch a rail-river export service for Ukrainian cargo in the Odessa region heading to Constanta in Romania, for onward connections to global destinations.

Odessa-based consultancy Informall said the first train was due to leave DP World’s TIS Pivdennyi terminal in Port Yuzhnyi, 40km east of Odessa this week.

However, it added, although the service had been announced, such operations  were “very challenging due to the war”, and not all expected services will run.

The planned route for the rail-river service is for cargo to leave Yuzhnyi by rail travelling west to Odessa and then on to Izmail Port on the Romanian border. From there, containers will be loaded onto river barges headed for Constanta.

Development of the route is still taking place, given the difficulties posed by the military conflict. Exports from Ukraine are expected to decrease once the cargo already at the ports is shipped and all available empty equipment is used.

It was still uncertain whether shipping lines would supply empty containers from neighbouring Romania, due to the war-related risks.

Informall said Ukrainian ports had remained closed since 24 February, with about 100 merchant ships unable to put to sea. However, some ports are completing loading and discharge operations for the vessels at berth.

“This logistics route [Odessa-Constanta] is still under development, cargo is not consistent and the timeframe of each leg is uncertain. Full containers are expected to be accumulated in Izmail until a barge arrives, however it remains a theoretical service,” explained an Informall spokesman.

As of today, export containers were being delivered to Constanta via trucks only.

“Freight forwarders and other transport stakeholders have developed this route on paper. However, as always happens in real life, it takes a lot of effort to make it all work out,” said Informall, adding that this was particularly the case when an estimated $163bn worth of infrastructure losses to day 34 of the conflict were factored in.

Moreover, Informall pointed out, the export service once fully launched would “help to handle heavily loaded containers which cannot be delivered by road due to weight limitations”.

Port and terminal operations in Ukraine remain difficult, not least due to reported sightings of “free-floating mines in the Black Sea, far from Ukrainian territorial waters”. It means vessels are also unable to call at Ukrainian Black Sea facilities. However, the actual number and location of mines have not been confirmed by Ukrainian officials.

Russia’s naval forces are also blocking Ukrainian ports in both Azov and the Black Sea, which means new container loads and empties cannot be landed directly in the country. With cargo and equipment already trapped by the war, shipping companies have officially stopped calling at Ukraine.

However, ONE (Ocean Network Express) has announced that change of destination (COD) administrative fees and cancellation fees have been waived for bookings to and from Ukraine, and detention and demurrage charges, applicable to containers that arrived in Odessa pre-war, or those due to depart from there, have been suspended until further notice.

Constanta has been a major import hub for Ukrainian import and export containers during the war, while Hamburg and Gdansk are also facilitating Ukrainian imports, but at lower volumes. The majority of cargo is medical and food supplies coming via western land borders into Ukraine’s Lviv region.

Last year, Ukraine, Russia, Romania, Georgia and Bulgaria handled 2.45m teu in the Black Sea region, of which more than half were imports. The full-to-empty teu ratio is 78.3% to 21.7%, respectively. Ukraine had been the leading country in terms of regional container turnover since 2016, except for a 2017 blip.

And in 2021, while eastern Ukraine, the Donbas and Crimea regions were occupied by Russia and the world economy was recovering from the pandemic, causing ocean freight rates to soar as well as empty equipment shortages, Ukraine still increased its volumes by 1.2%, at 829,725 teu, 34.2% of the Black Sea market.

Informall data analyst Daniil Melnychenko said“The annual results show the real resilience of the people of Ukraine, their adaptability, their drive to build their nation and move forward, despite all the issues we encounter.”

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