Interview of the President of the Association of International Freight Forwarders of Ukraine (AMEU) Viktor Berestenko to the agency “Interfax-Ukraine”
Text: Olena Manzhelo
– After the dismissal on May 9 of the Deputy Prime Minister for Reconstruction – the Minister of Community Development, Territories and Infrastructure Oleksandr Kubrakov, and then his deputy Yury Vaskov, who was in charge of the maritime industry, no one has been appointed to these positions. Didn’t this lead to a halt in important areas of work?
– Due to their absence, nothing stopped as much as it could have happened. But, as we saw in the case of the cancellation of measures to Ukrainian ports of container ships, the issues are not resolved. Scandals are needed for this to happen.
I know that some concession procedures are being prepared in the Chornomorsk port, and despite the absence of appointed managers, these processes are ongoing. There is a need for legislative regulation. I’m not sure that this is the best time to allow someone to enter into a concession agreement. But I share and defend the point of view that all state-owned enterprises engaged in commercial activities, such as state-owned seaports, should be privatized. Their form of ownership must be changed from state to some other: either it is a concession, or a joint activity, etc.
As for communication, there is the administration of sea ports, there are heads of structural divisions, state enterprises – they work. However, if the appointment of a profile deputy is delayed or an unknown person is appointed, it will be bad. Yurii Vaskov is a person who understands how the maritime industry works and how important it is for Ukraine. But let’s see. Now, as I said, nothing has been stopped, but there is no understanding of how things will develop in the future.
– Do you think that Vaskov can be reinstated?
– I am not sure that such an option is being considered. The question is not who will be appointed, but how it will work. The worst thing is if a person is appointed, but he does not have enough authority. As for the professional component, I think that it will be quite difficult to find a person who would have such experience, understanding of the work of the industry and competence as Vaskov.
– Why do you think that the concession in the Chornomorsk port is not on time?
– Currently, there is a statement by the CEO of Maersk Ukraine, Roman Koloyanov, that the company will not resume sea container transportation with its own ships in Ukraine until the end of the war. However, if it doesn’t happen, I don’t understand what to use the port for then (as reported, representatives of the Danish shipping company Moller-Maersk confirmed a significant interest in the concession of the container terminal of the port of Chornomorsk, – IF-U). Maersk will use feeder ships operated by the Ukrainian company “ITERIS” and which will go to the seaport “Chornomorsk”.
The next thing to note is that the capacity of our container terminals is 3.5 million TEU, while before the war the annual volume was about 1.02 million TEU, and the current flow does not exceed 500-600 thousand TEU per year. Thus, our throughput is always greater than the actual cargo flow.
Let’s think logically: what is the concession, why is it a plus, or will the concessionaire actually be willing to invest in the construction of a container terminal, because in this port there are only remnants of it, and it does not meet modern requirements. Reconstruction needs to be done there, which should be done by the state, because it seems that there is a need to restore moorings, return passport depths and so on.
– It was reported that the container ship Levante F of another global giant MSC was due to arrive at the port of Odesa on June 6, and this would be the company’s first call since the full-scale invasion. So it didn’t happen?
– Indeed, container transportation from the ports of Great Odesa (“South”, “Chornomorsk” and Odesa sea trade port – IF-U) have recovered since April. At the moment, it was about the ship’s call by the own fleet of the largest carrier in the world, the MSC company, to the port of Odesa. The ship MSC Levante F docked here and as of Monday morning is on the roadway, awaiting the start of putting into the port for cargo operations.
This is a very significant moment, because MSC is the world’s largest container carrier, and it made the first port call with its own ship. Do you understand? This is a shipping safety indicator that will be a model for other major companies.
Another important point is that it establishes a connection with one of the largest hubs in Turkey, which in turn connects with the whole world: the USA, South America, Africa, Asia. Because until now we worked through Constanta. And this is not even a transit hub, but some intermediate point between large hubs and the port of Ukraine. MSC’s activity will contribute to lower costs of logistics, reducing the time of cargo transportation to and from Ukraine.
Plus, this is a new level of trust in the Ukrainian authorities, in the safety of navigation from the point of view of protecting sea routes connecting Ukraine to the whole world. Work in this direction continues. And the President of Ukraine Volodymyr Zelenskyy mentioned the other day about the maritime doctrine, which they should consider at the National Security and Defense Council (NSDC).
We need to return our cargo flow from Polish, Baltic and Romanian ports to Odessa. Current services will not allow us to physically bring them to Ukrainian ports. Therefore, we expect an increase in the number of services by large ships and destinations not only with Turkey, but also with Greece (Piraeus port) and Egypt (Said port). As it is known, the call of the MSC vessel became possible only for the third time. There were two previous attempts, but only the third was successful.
– Why were the first two attempts unsuccessful? What was the biggest obstacle?
– Actions of the Odesa Customs, which is coordinated by the Odesa Military-Civil Administration. Customs created artificial obstacles for entities that process cargo at sea checkpoints and ports. Out of 580 containers prepared for loading in the port of Chornomorsk, only 24 were processed in more than a week. Because of this, the other vessels were anchored in Constanta (Romania) and did not go to the ports of Odesa. Customs blocked the registration of export cargoes, demanded laboratory tests. And this was done by the same customs office, which cleared the same cargoes at the land border in Starokozachy, Reni, Orlivka. But in the port, in contrast to the land border, it is easier to drag out these issues, because when there are queues of 400-800 cars at the MAPP, a scandal will break out, and in the ports it is almost imperceptible.
Our Association informed the Council of Entrepreneurs at the President’s Office about the situation, but we did not receive any response in return.
For a whole week, starting on June 17, we tried to prove to the Odesa Customs, the Central Customs Office, and the Military-Civil Administration that the issue of processing these cargoes should be a priority of the Ukrainian authorities, because we are returning the Ukrainian cargo base to us. However, I repeat, no action was taken. And only after the scandal became public, we began to receive the first reaction. But in particular, as we know, the President’s Office was sincerely indignant and believed that we were spreading ipso, lies. So far, we have prepared a large package of documents and appeals to the prosecutor’s office regarding delays in registration by Odesa customs officials. We will publish it in the AMEU Telegram channel in the near future.
– Have you met with representatives of the President’s Office on this issue?
– No, not with anyone. But as far as I understood, the Office of the President was very angry that such information came to the public domain. And then we saw how everyone was trying to defuse the situation, you know? Instead, after it exploded as a scandal, all containers were issued in three days. But at that time, due to the fact that the issue was not resolved, the owners of the cargo took part of the containers to the Romanian port of Constanta by motor vehicle.
– To what level will MSC Levante be loaded, what are your expectations?
– About 500 containers should be loaded on board the ship is almost 90%. Currently, the situation has stabilized – the customs office has begun to process the cargo. We hope that this matter is now under the control of the Office of the President, the State Customs Service, and the Odesa Military-Civil Administration.
– How strong is the competitor “Ukrzaliznytsia”, which loudly declares its intention to develop multimodal and container transportation? A significant share of cargo is taken from the ports?
– “Ukrzaliznytsia” sincerely surprised us by refusing the offer to organize the delivery of container cargo from the network of private terminals on the border of Ukraine and Poland to the ports of Greater Odessa. On April 24, Maersk Ukraine General Director Roman Koloyanov and the managers of New Ukrainian Railway and Road Terminals LLC, Western Container Terminal, Ukrainian-Greek Joint Enterprise Imtrex, AMEU sent a corresponding letter to its management. In response, an unsubscribe was received without any specifics (the editors have a copy of the letter – IF-U).
– What is happening in the Danube ports? As we can see, this year the cargo flow mostly goes through the Black Sea ports, and the Danube ports have decreased significantly. How does this affect the situation in the Danube ports and, in particular, the interest of investors in the implementation of projects? Has the interest boom we saw last year passed?
– The topic of Danube ports is one of the most popular on the forum of our association. Last year in March, when everyone came with proposals to invest in the Danube ports, I followed this point of view: as soon as the “big water” (Black Sea ports) is fully operational, the Danube will return to its pre-war volumes. But, in the end, it may roll back even more due to the reduction of the Ukrainian cargo base.
The Danube cluster, to be honest, has certain limitations, in particular due to the actions of local groups, which include both government officials and law enforcement officers. This is a limitation of the size of vessels. Are the Danube ports able to compete with the ports of Great Odesa in terms of infrastructure, mechanization, tariff policy and competitive attractiveness? Definitely not.
The shoulder tariff for delivering goods there by road and rail absolutely kills any appeal. After all, transshipment rates even on the spot in Greater Odessa are much more attractive. Personally, I do not see great prospects for the development of “Reni” and “Izmail” ports, since their cargo base will remain only certain volumes of agricultural products grown in the South, in Bessarabia. This is my personal opinion.
– What is your forecast for the dynamics of cargo flow from the Danube cluster, and how will this affect the results of 2024?
– I think that the Danube ports will handle not much more this year than in 2021. (According to the results of 2021, the port of “Izmail” handled 3.9 million tons of cargo, “Reni” – 1.37 million tons, “Ust-Dunaisk” – 64.3 thousand tons. The very next year, the ports increased volumes by 3-10 times – I-FU).
In 2022-2023, the Danube cluster was an alternative to the Black Sea Corridor, and this was the only reason why the monthly figures there reached a record 3 million tons.
– How do you assess the activity of the Ukrainian Danube Shipping Company (UDP)? Do you notice positive changes?
– I quite positively assess their activities from the point of view of optimization, minimization, efficiency. Representatives of the UDP visited our association’s events and offered their services. I hope that the management that is currently at the helm of UDP will continue the efficient, profitable operation of this state-owned enterprise.
– What results do you expect from the “sea corridor” this year? You have already exported 56 million tons and more than 2,000 ships, which is already much more than what was exported during the “grain initiative”.
– We will fully master all necessary exports of Ukrainian grain and other products, gradually approaching pre-war indicators. However, taking into account the structure of cargo flow and the existing Ukrainian cargo base, this is still a long way off. But I know for sure that the carrying capacity of the ports of Great Odesa is sufficient to process all available Ukrainian cargo flows.
– What currently prevails: export or import?
– Export prevails – more than 10 times. Despite the damage that the port infrastructure suffers from shelling in the Black Sea ports, its capacity significantly exceeds the current need.
– Does the insurance work well?
– Rates continue to decrease and already reach 0.8%, while before the war without military risks it was 0.5%.
