The war that Russia started in Feb’2022 is still ongoing with no apparent signs of ending.
The consequence over shipping, logistics and trade in Ukraine are dramatic, however Ukraine is recovering.
This review summarizes the year of 2024 with focus on present situation in ports, tips and practical advises for the shipping business players when operating in Ukrainian waters, and review of commercial activities in Ukraine.
Ukrainian ports’ operation nowadays
Ukrainian grain corridor remains the reliable sea route, playing critically important role in the world’s food safety. Special support for export capabilities is provided by the Danube ports.
All regions of Ukraine face lack of power due to partly destroyed energetic objects by Russian attacks. For example, in the mid of July’24 Odesa Region had 3-4 hrs power on, then 5-6 hrs off, daily.
It is reported that unstable power supply and air raid alarms will significantly impact regularity, speed and volumes of agricultural export by sea. Need of additional power equipment (generators) for grain elevators will lead to increase of storage and handling tariffs.
Ukrainian Naval Forces make every effort for safety and development of the sea corridor. Also, there is a significant international support, for example on 11/01/2024 Romania, Bulgaria and Turkey signed memorandum on de-mining of the Black Sea. In the beg. of July the said countries started de-mining operations to improve safety of the navigation, in particular for Ukrainian grain export.
General advice for calling Odesa, Chornomorsk, Pivdennyi ports (sub to changes/updates, port agents always guide the Owners/Master with the latest updated information/rules)
*During air raid alert cargo operations prohibited; *curfew imposed in Odesa Region – 00.00 – 05.00 LT; *navigation inside harbor – 07.00 – 18-19.00 LT;
*While passing the corridor the AIS signal must be turned off and the navigation radars must be turned on. *When 5 miles to arrive to the Northern waiting area and during the period when vessel is located in the Ukrainian port AIS signal must be turned on and the navigation radars must be turned off.
*For the period of the martial law legal regime in Ukraine, it’s prohibited to use the electronic communication equipment, television, video and audio devices, external video surveillance cameras, video recording, etc., for capturing infrastructure objects (including seaports).
In order to comply with the mentioned above restrictions, the Masters of the sea vessels calling at the Odesa region ports, have to turn off the external video surveillance cameras available on the vessel. If it’s impossible to do due to the absence of a technical possibility - they have to block their operation physically (by using camera covers or other objects).
*All transiting to/from the ports of Ukraine vessels are obliged to be in constant communication with the Coordination Center of SE "USPA" through the vessel's agent, and to comply with all instructions given by the Coordination Center.
In order to avoid danger from floating mines or false recognition of vessels passing through the area of military threat, the vessel should monitor the mine situation during the passage of the Route at a certain time. The vessels transition through the combat zone should be carried out as quickly as possible, without any stops. *Bunker supply in the ports of Ukraine is possible and done by trucks. The average capacity of the truck is 25 tons. There may be separate charges for protective booms, fire brigade attendance & security service, invoiced via the port Agents.
Danube ports strategy
For the Danube ports 2024 year was a challengeable one.
There is a continued tendency of reorientation of the grain flow from The Danube region and Romanian Constanta towards Ukrainian Black Sea Ports.
Due to demand fall Ukrainian Danube Company put part of fleet on hold. The crisis has the following reasons, in particular:
- lack of support of Danube export and need to lower the costs;
- abnormally high temperatures in summer 2024 as well as shallowing. Shallow waters complicate
movements of barge caravans;
- loss of part of harvest due to high temperatures, consequently shortened volume of cargoes exported from
Danube;
- low freight rates.
To overcome the crisis the following strategy was held:
- to avoid salary debts;
- to skip fleet employment with minus profit;
- to continue modernization program;
- to prevent any risks of corruption schemes;
- to continue cooperation with International Financial Corporation.
Ukrainian Danube Shipping continues export of iron ore raw materials to European countries. Contract for current year implements increase of the volumes for 30%. Shipments will be held by the modernized fleet for higher profitability.
One day these ports will serve Ukrainian economics again…
Before war started, there were 18 ports in Ukraine. 5 ports were occupied in Crimea in 2014, 4 more ports, namely Mariupol, Berdyansk, Kherson & Skadovsk were occupied since 2022. Kherson has already been deoccupied but can’t be operated due to a close frontline, as well as Mykolaiv.
Calling Mykolaiv ports is still considered to be risky since the vessels have to pass Dnieper-Bug Estuary Channel and then sail close to Kinburn Split in order to proceed to Black Sea. Kinburn Split is located on the part of Kherson Region which is still occupied by Russians and therefore they can easily attack every ship navigating through. Shall be noted that as per the experts’ prognoses, unblocking of Mykolaiv ports would cut exports costs by 15%.
After Crimea occupation by Russia in March 2014, in April Ukraine officially named Crimea as temporarily occupied, and in June issued order for “Closure of Sea Ports” of Crimea. When operated by Ukraine, the Crimean ports served export of Ukrainian grains and steels, as well as transit export of gas & oils from Kazakhstan & Russian Federation. Import consisted of consumer goods, mainly Turkish origin and vehicles, also passenger lines operated via Yalta & Sevastopol.
Nowadays in order to override sanctions the ships, when calling Crimean ports, do the following:
- indicate another, not Crimean destination port;
- switching off AIS during entering the ports & stay thereat, during loading & discharging operations.
However, Security Service of Ukraine can easily determine whether the vessel called Crimean port before entering Ukraine, and impose corresponding sanctions, the following case may serve as example:
Master of mv USKO MFU was brought to justice with penalty in amount equal to abt USD 2500 and prohibition from taking sea transport navigating positions for 2 years, due to calling Sevastopol port which is occupied by Russia, before calling Ukrainian port Reni in July 2024. When calling Sevastopol Master switched off AIS and modified the vessel’s movements data to hide the position. Security Service of Ukraine confirmed that Master was detained due to cooperation with Russian occupants on stealing of Ukrainian grains from Crimea. During the searches relevant documents proving the illegal activities were found onboard.
The impact of the Russian aggression onto the maritime & shipping business can’t be overestimated. Here are some significant incidents happened during 2024:
On 27/02/2024 7,600-dwt m/v Kuruoglu 3 stuck in Kherson since 22/02/2022 was hit by 2 Russian missiles which caused the vessel to start taking on water. The vessel is owned by Turkish company “Kuruoglu Denizcilik”. According to available information the ship had 2800 tons of nitrogen fertilizers onboard. No reports as to number and condition of the crew onboard are currently available.
On 04/07/2024 Russian forces attacked civil port infrastructure of Chornomorsk, as a result port and administration buildings were damaged, 1 person died, 7 injured.
On 09/07/2024 Russian forces attacked port infrastructure in the Odessa region. Guard and truck’s driver died, 1 person injured. Warehouses and trucks sustained damage. Also due to damage to civil ship there was a leakage into water basin.
On 06/10/2024 General Cargo Ship PARESA (IMO 9008134), laden with about 6000 tons of Ukrainian corn for export, was damaged by Russian military forces during the attack against port Pivdennyi. Reportedly no crewmembers, citizens of Egypt & Syria, were injured.
On 07/10/2024 General Cargo Ship OPTIMA (IMO 9528691) was hit by Russian missile attack against Odesa port. 1 Ukrainian citizen working with cargo operations died, 5 foreign crewmembers were injured.
On 09/10/2024 Russia launched 2 ballistic missiles against the Chornomorsk Fishing Port, one of which hit a container vessel SHUI SPIRIT IMO: 9216729, moored at the pier.
As a result of the missile hit, 2 crewmembers sustained mild injuries - Bosun and Cadet. Apart from the crew, 9 people were killed and 9 people injured, most of them are stevedores.
n 28/12/2024 as a result of Russian drone’s attack storage tank with vegetable oil was damaged and oil penetrated into Southern Bug River, Mykolaiv Region. Absorbing boom barriers were used to avoid spread of oil in the river. More than 114 tons of oil were pumped out.
On 15/12/2024 two Russian tankers Volgoneft 212 & Volgoneft 239 were sinking in the Kerch strait. As a result, more than 4300 tons of fuel oil were spilled, as well as other oil products. Ecologists estimate that Black Sea will need at least 5-10 years for liquidation of the contamination consequences. 61 dolphins and thousands of birds died due to the accident.
As can be noted, there are damage to ships, infrastructure, cargoes, ecological disasters, and losses of lives, that is the price Ukraine pays in fighting for its freedom & independence.
Cargo turnover results 2024
During the 2024 year 6840 ships called Ukrainian Black Sea Ports, 2221 ships called Ukrainian ports on Danube.
Ukrainian agricultural sector earned USD 24.5 bln from export of grain in 2024, which is USD 2 bln more than in 2023.
Export of Ukrainian sugar in 2024 reached 746.3 thousand tons which is the highest volume over the years starting from 1997. 40% of exported sugar were delivered to European countries, other leading importers are Turkey, Lebanon & Cameroon.
Ukraine remains export-oriented country and internal consumption of agricultural products is 3 times less than production.
Recovery of Ukraine
At its meeting on 6 August, the Cabinet of Ministers of Ukraine allowed foreign companies to obtain construction permits in Ukraine without obtaining licenses. The right to conduct construction activities will be granted by submitting a free of charge declaration of economic activity to the licensing authority without the need to obtain a construction license. The adoption of this act will improve the regulatory framework for foreign companies in Ukraine.
* Foreign and local companies in Ukraine have adjusted to the new realities and continued to work and try to expand their operations during the war. Moreover, many companies are considering entering the market early so as not to miss out on Ukraine’s reconstruction, but are prevented by internal policies that do not allow them to enter the market without proper insurance coverage.
In response to market needs, Willis Towers Watson (WTW) developed Personal Accident and Emergency Medical Assistance insurance in Ukraine. According to WTW General Director’s information, for organizations contemplating entry into the Ukrainian market, due consideration should be given to the duty of care and the best possible protection to their staff and contractors working on behalf of the insured organization.
* Since the start of the war, Russia has inflicted severe damage on Ukraine’s energy infrastructure, leading to a critical need for comprehensive rebuilding efforts. As a result of the attacks, Ukraine has lost over 9 GW of electricity generating capacities, while local gas production has dropped 5–10 percent.
In one of the largest attacks on Ukraine’s energy infrastructure, Russia targeted critical facilities, including the Kyiv Hydroelectric Power Plant, leading to emergency power cuts, as well as significant damage reported across 15 of Ukraine’s 24 regions.
Ukraine’s energy infrastructure has seen more than half of its pre-war capacity destroyed. Reconstruction efforts are focused on restoring damaged infrastructure, including the construction of new substations and power transmission lines using modern and energy-efficient technologies.
To ensure continuous and uninterrupted energy supply, Ukraine is exploring various innovative solutions. There is a strong emphasis on developing renewable energy sources such as wind, solar and biomass, including biogas and biomethane. Decentralized energy generation is also being promoted to enhance resilience against attacks. Technological innovations include new space heating technology for heat pumps, innovative battery storage solutions, smart grids and geothermal energy harnessing.
Ukraine is constantly working on restoration plan for its transport infrastructure, strengthens partnership with other countries, develops mechanisms for protection of port objects.
With help of international community, the Ukrainian ports continue their operation during such challengeable times, demonstrating stability and efficiency.