The redirection of export flows to Black Sea ports has affected the Danube ports, with freight rates dropping and a number of investment projects suspended, chief executive of Ukrainian Danube Shipping Company (UDP) Dmitry Moskalenko said.
“The situation on the Danube river is objectively difficult, freight rates are at minimum levels, the agricultural exports have shifted to the ports of Odessa. The largest players in the river transportation market are cutting costs by suspending some investment projects and optimizing staff,” Ukrainian media quoted Moskalenko as saying on social media.
UDP initiated a discussion of the situation at a meeting at the Ukrainian Reconstruction Ministry, where it was decided that UDP should continue modernizing its fleet even amid the crisis.
“For decades, the company has only been ‘eating away’ at the old resource. Finally, it has a historic chance for a modern fleet,” he said.
The meeting also addressed making changes to the financial plan with regard to decommissioning and selling the ships that have been idle for years, he said.
“This is mostly scrap not economically viable to repair that […] is washing away the company’s working capital. The position of colleagues is clear: it is necessary to get rid of [it],” Moskalenko said.
He said UDP expected the process of selling its scrap to be immediately unblocked. The state will benefit from this through taxes and dividends, while Kilia Shipbuilding and Ship Repair Factory will get jobs, and the UDP fleet will receive an additional transportation orders, he said.
Moskalenko said earlier that the shipping company wanted the government to introduce a 30% discount on the tariff for rail transportation to Danube ports. If the discount is provided, farmers could guarantee a stable export flow through these ports, he said.
A 30% discount on the transportation of agricultural products by rail to the ports of Danube would be appropriate if the government determines compensation sources for Ukrainian Railways, Andrei Miroshnikov, deputy director for transportation technology and commerce at Ukrainian Railways, said.
Source: Interfax