The enemy continues to strike at logistics – the commercial fleet, ports, bridges, border checkpoints with Moldova, parking areas for heavy trucks, and warehouses. Meanwhile, Ukraine is finding new alternative routes and calculating how much the economy is losing. GRANDAR co-founder and Managing Director Oleksii Abramov spoke about logistics amid intense attacks in an interview with Olha Hvozdetska, a journalist with the Ukrainian Information Service.
– On September 1, at the UN General Assembly, Ukraine’s Deputy Foreign Minister Mariana Betsa stated that over the past several years Russia had damaged more than 1,050 port infrastructure facilities, attacked more than 240 civilian vessels, and attacked more than 50 vessels during the summer of this year. How has the transportation system changed? Are we returning to the crisis of 2022, or has the system nevertheless adapted?
– The system has adapted to some extent, but not completely. I would probably describe Ukraine’s current logistics system as follows: previously, there was a model based on a maritime corridor plus alternative routes, whereas now it operates as a shortage of maritime capacity combined with competition for those same alternatives. De jure, the ports of Greater Odesa are still open, but de facto they are blocked.
It is not only port infrastructure and the commercial fleet that are suffering, but also domestic logistics. Russia is striking heavy trucks, railways, and locomotives. All of this is leading to a shortage of transport and logistics capacity. According to my information, Ukraine has managed to carry out approximately 30% of its export potential.
That is why the ports of Greater Odesa are critical for Ukraine. Naturally, logistics is now looking for other routes that could compensate for Odesa, Chornomorsk, and Pivdennyi. There is the Danube, which remains our main lifeline. There are also alternative routes, for example through Poland. Nevertheless, due to certain circumstances, unfortunately nothing can fully replace the ports of Greater Odesa.
– And what exactly are those circumstances? Apart from Russian attacks, what other factors are involved?
– If we talk about the Danube, there is a queue building up at the entrance to Romania’s Sulina Canal. It is difficult to say when the queue will disappear, but Ukraine, Romania, and Moldova have developed a special project intended to compensate for the shortage of pilots. They are currently trying to pass 8–10 vessels a day.
Even at that rate, we need several weeks to distribute this queue among the terminals in the Danube ports, because new vessels are also arriving. In addition to the queue at Sulina and the shortage of pilots, the shallowing of the Danube significantly restricts logistics. We depend on the water level in the river, and this leads to a reduction in the amount of cargo a vessel can carry.
For example, if we compare the situation with the ports of Greater Odesa, in Odesa, Chornomorsk, and Pivdennyi we could receive Cape-size vessels. Now, however, the vessels being loaded here carry several times smaller volumes of cargo. There are also restrictions related to cargo accumulation. The terminal areas in Reni and Izmail do not allow large quantities of cargo to be accumulated and stored for a certain period of time. Therefore, we face restrictions that are genuinely critical compared with the ports of Odesa.
– But the enemy is also shelling the Danube ports. What is the risk that the alternative Danube hubs could also stop operating or significantly reduce their transshipment volumes?
– Of course, there are risks. The attacks continue, and something is constantly flying toward the southern part of our country. But our Defense Forces are fighting this. We understand — and shipowners and cargo owners understand as well — that when you send a vessel to a country at war, you are naturally exposing yourself to a risk that must be carefully considered.
After the effective blockade of the ports of Greater Odesa, cargo insurers also reconsidered the approach they had previously used. There is now a risk to the vessel, a risk to the crew, and a risk to the cargo. All of this is causing a significant increase in insurance costs. Naturally, insurers are imposing different rules, which ultimately leads to an increase in the cost of the cargo.
– Under these conditions, are foreign clients ready to work with Ukrainian companies and buy Ukrainian products, particularly grain? Have there been any refusals recently?
– They are unquestionably ready. We are working and will continue to work. I see that there is demand and support for our country. Logistics companies such as GRANDAR address this issue comprehensively.
At present, in addition to the Danube, there is a land connection with Romania. It existed before, but together with the Danube route it now works differently. For example, cargo is accumulated in small batches in Reni. It is collected by barges and small vessels, which deliver it to the port of Constanța. There, the cargo is transshipped onto an ocean-going mother vessel, which then proceeds to the final consignee. This system works not only for bulk carriers. It works in general, including in the container business.
Maritime carriers and agents representing the interests of major shipping lines in Ukraine have also shown flexibility on this issue. I can see that they, too, were preparing for the effective blockade of Greater Odesa. The primary alternative is rail transport.
Ukrzaliznytsia has launched freight transportation from Ukraine through Moldova to Constanța. This gives us the opportunity to export and import at a significantly lower cost than the prices currently offered by road hauliers.
We are grateful to our state and to Moldova for meeting us halfway. In August, a 50% discount was agreed for all rail transportation passing through Moldova in transit. Naturally, this will help us increase cargo turnover, because previously the cost and economic factors in most cases did not allow cargo to be exported by rail at all, as the shipments were often not profitable.
To deliver cargo to Ukraine’s Danube ports, road transport must be involved. If we compare rail and road transport, rail is cheaper. We face the fact that road transport has its own limitations and follows specific routes, some sections of which are also shelled by the enemy. Nevertheless, road transport offers flexibility. You can drive directly to a field, load the cargo straight from a combine harvester, and take it immediately to a Danube port. So, overall, the routes exist.
There are routes, there have been routes, and most likely there will continue to be routes. Logistics companies and the state as a whole are considering how to optimize them and what additional solutions to integrate. However, we still face a shortage of cargo turnover and freight capacity.
– What is the current shortfall as a percentage compared with the figures before the full-scale invasion? How much less product will Ukraine export in 2026?
– At present, it is approximately 70%. Warehouses are full, there are very large accumulations of cargo, and shipments are moving. Ukraine is trying to export through every possible route.
By the way, we have now reached a period in which imports are balancing exports, because previously imports subsidized exports. This is now the agricultural export season, and the value of goods has increased. This gives us the opportunity to export, sell, and conduct trade with almost the entire world.
– You mentioned that insurance costs are rising. Who bears these expenses? Let us take grain as an example.
– I would like to point out that grain and the agricultural sector are indeed one of our areas of activity, but they are not our primary focus. GRANDAR can both export and import any type of cargo. All of the company’s specialists have been working in logistics for a very long time, and, in principle, our capabilities and knowledge allow us to do a great deal.
Returning to your question about the rising cost of logistics: previously, the transportation formula was much simpler. It could involve road or rail transport, after which the port accepted the cargo and transferred it onto a vessel. The cost of transporting a ton of cargo was approximately 20–25 dollars, or a maximum of 30 dollars per ton, when considering the entire route. That is the average figure for bulk agricultural commodities.
The cargo would be transported by truck from the field, then by truck to Reni and onto a barge, from the barge to Constanța, and from there the mother vessel would take it to the countries importing the cargo. If the cost used to be 20–30 dollars per ton, it can now reach 120 dollars. In other words, logistics costs have tripled. Naturally, this is hitting our exporters in the pocket.
– Will Ukrainian producers suffer?
– Of course. There is a global market that determines the price of goods for a particular period. We depend on it as well. We cannot sell our wheat at a higher price than the rest of the world. There is an average price that determines whether we can export a particular product, depending on its type. You then calculate the cost price. Naturally, Ukraine suffers first and foremost, because we are unable to generate additional revenue for our country.
– Are there goods that, because of this increase in costs, are no longer worth exporting? Because no one in the chain gains anything.
– There certainly are such goods, but I will not name them, because every seller, just like every buyer, has different capabilities. I am referring to logistics itself. Someone may rent a vehicle for one thousand dollars, while someone else may not be able to find one even for three thousand.
Therefore, everyone has different options. Each person chooses a logistics partner who offers a particular service. That service may simply not fit within the pricing structure required for a particular export operation.
– Where does russia currently have the greatest interest and derive the greatest benefit from its strikes?
– I do not want to give russia hints about where it has an interest or where it can strike. But, of course, it is no secret that the president of the russian federation has ordered strikes against our energy sector and Ukraine’s infrastructure, on which we are highly dependent.
The enemy wants to demoralize us and effectively block our economic activity. Naturally, they will target critical points, including terminals. These may include areas where vehicles, railcars, locomotives, and cargo are accumulated, as well as the terminals themselves.
This is infrastructure on which the logistics chain critically depends. We understand this, the state understands this, and we are addressing it and trying to solve the problem through our own efforts, our appeals, and our decisions.
– Finally, Oleksii, I would like you to name three specific figures. How much does it currently cost to transport a notional ton of cargo by sea, how much does it cost via an alternative route, and how much could the price increase if the Black Sea is not reopened in the near future?
– In fact, I have already told you that alternative routes through the Danube and Constanța can cost up to 120 dollars per ton. That is 3.5 times more than it was before the full-scale invasion. However, not everyone sells their agricultural products by sea. Some export to Europe, depending on the type of goods.
Ukraine is able to export more than just agricultural products. We are not limited to that. Therefore, I would not single out one particular category or say specifically that one cargo costs a certain amount and another costs a different amount. Every sector has its own specifics. But I can point out that we are actively exporting many types of cargo.
– In your opinion, will russia succeed in destroying logistics in Ukraine? And if it does, what should be done then? Are there backup plans?
– It definitely will not succeed. Our spirit is unbreakable. We have already shown this to the whole world.
Logistics has one major strength: flexibility – the flexibility of solutions. We have strong, thoughtful people who plan their actions several steps ahead. That is why I am certain that it is impossible to destroy logistics in Ukraine.