Blocked by Polish truckers, Ukraine is turning to the Black Sea to boost trade
Weeks is one border blockade by Polish truck drivers has severely hampered Ukrainian overland trade, preventing the war-torn country from exporting tons of grain, delaying the delivery of vital military equipment and putting pressure on the country’s already meager revenues.
But an economic lifeline has emerged from what has long been considered a risky trade route: the Black Sea.
The Ukrainian government said Tuesday that more than 10 million tons of cargo have already been exported through a shipping corridor recently built by Ukraine to bypass Russia’s effective blockade of its Black Sea ports. Half of these exports consist of agricultural products, according to Oleksandr Kubrakov, the Ukrainian Minister of Infrastructure, said in a statement.
The announcement, which came just a day after Polish truck drivers again blocked one of the main border crossings with Ukraine, was a rare bright spot in an otherwise difficult period for Ukraine, marked by inconclusive battle against Russia And eroding U.S. support for continued military assistance.
Ukraine has achieved “a great victory” in the Black Sea, President Volodymyr Zelensky said said at a news conference on Tuesday, which highlighted his country’s success in securing the new maritime trade route. Russia, Mr. Zelensky added, is no longer blocking the Ukrainian economy through the sea.
The contrast between the success of the Black Sea Route and the disruption on the Polish border is a striking development from the start of the war, when companies concerned about shipping goods through the disputed waters of the Black Sea turned to land routes .
But Ukraine’s ability to repel the Russian navy and political unrest on the western borders may now change that calculus.
“The Black Sea Corridor already has significant positive impacts on the Ukrainian economy and is likely to become one of the main growth drivers next year,” said Olena Bilan, chief economist at Kyiv-based investment bank Dragon Capital.
Ms. Bilan added that trade through the corridor had likely more than offset the economic loss caused by the border blockade, noting that total Ukrainian exports increased by almost $500 million from October to November, the month the blockade began.
Still, the border disruptions have taken a heavy toll on the Ukrainian economy. Volodymyr Balin, Vice President of the Ukrainian Association of International Road Transport Operators, told reporters on Tuesday it was reported that the country’s economy “lost more than 1 billion euros” as a result, about $1.1 billion.
The blockade was triggered by a complaint by Polish truck drivers that cheap competition from Ukrainian counterparts, who are not subject to European Union rules on working hours and wages, is eroding their profits.
The Polish and Ukrainian governments hold regular talks to resolve the issue and Donald Tusk, the newly elected Polish Prime Ministerhas promised to end the blockade.
But the dispute has been dragging on for weeks, and on Wednesday, Ukrainian officials said that more than 5,000 vehicles were still queuing to enter Ukraine through four blocked checkpoints.
The blockade has not only hindered trade, but also… also the deliveries of war supplies, according to Ukrainian soldiers. A Ukrainian commander said on Tuesday that the drones he ordered had been blocked at the Polish border. encouraging people on social media to help him buy new ones.
In light of the recent border disruptions, analysts say Black Sea trade could increase in importance.
Dragon Capital’s Ms. Bilan said she estimated that commodity exports through the corridor could rise to 7 million tons per month, up from an expected 5 million tons in December, and that exports of high-value products could “partially reorient from the blocked roads to seaports.”
The corridor – which encircles Ukraine’s western Black Sea coast and provides passage to the territorial waters of countries under NATO protection – was launched in mid-September, after Moscow withdrew from a United Nations-backed deal allowing Ukraine to ship its grain by sea.
After the collapse of the agreement, Russia threatened that it would consider any ship approaching a Ukrainian port as a potential military threat. It’s been that way ever since repeatedly attacked Ukrainian port infrastructure.
Yet the Ukrainian military has largely done just that managed to secure the new route through a series of ambitious military operations. The Ukrainian government also launched an insurance program last month to provide affordable coverage to shippers plying the corridor.
So far the route has been a relative success.
Mr. Kubrakov, the Infrastructure Minister, said 337 ships had loaded cargo at Ukrainian ports and transited through the corridor since its launch, or about 112 ships per month.
That is more than the average monthly number of ships sailing the Black Sea under the UN-backed agreement, according to figures provided by Andrii Klymenko, the head of the UN agency. Institute for Strategic Studies of the Black Sea. He added that Ukraine exported 3.2 million tonnes of products through the corridor every month, compared to 2.7 tonnes under the UN-backed agreement.
Mr Klymenko said he expected Russia to attack more port infrastructure and ships in an attempt to derail use of the corridor. Last month, Ukraine said a A Russian missile had hit a commercial shipwhich killed a port pilot and injured three crew members and a dock worker.
Prosperous trade in the Black Sea means that “Ukraine earns extra money, including for the budget that finances the army,” Mr Klymenko said. “Russia hates this.”