25 April (Lloyd's List) - BOXSHIP trade in the Black Sea has changed significantly since Russia’s invasion of Ukraine. While overall traffic has plummeted, neighbouring countries have seen a boost in demand for container services.
Traffic in the region has decreased by 28.4% last year, according to data from Informall Business Group, an Odesa-based consultancy. Laden import volumes fell 25%, while export volumes were down 33%.
Ukraine’s boxship market, which pre-war had an annual turnover of more than 1m teu, has suffered the most. The country’s key container terminals have been blocked since the start of the invasion in February 2022. While the port of Odesa is open and operating under the Black Sea Grain Initiative, boxship services are unable to sail given the deal only applies to vessels carrying grain and other specific agricultural commodities.
Containers can still be delivered direct to Ukraine via barges and smaller ships.
Prior to the war Ukraine’s Danube river ports of Reni and Izmail did not handle boxships, however, the port infrastructure and supply chains have been adapted to accommodate the trade.
“This logistics solution offers much-needed relief from overland transit trucking from Romania to Ukraine, which was previously the primary option for moving containers post-invasion,” said Daniil Melnychenko, a data analyst at Informall BG.
Imports and exports destined for Ukraine are now being funnelled through the port of Constanta, boosting Romania’s yearly turnover. Constanta handled an additional 75,000 teu in 2022, according to data from Informall BG.
“A 15% increase in laden container turnover is a significant jump for Constanta, and it would be for any other port of that size,” says Mr Melnychenko. Under normal circumstances Constanta’s container terminal yearly growth rate is around 3%-5%.
Georgia’s boxship terminals have also benefited from the conflict with a 22% increase in laden volume year on year reaching 302,000 teu, according to Informall BG’s research. The country, which borders Russia, is viewed as a potentially viable route for moving products between Europe and Asia.
“Opportunities for Poti and Georgia are driven by the port’s location at the western end of the Central Asia/Caucasian rail network connecting Asia with Europe through the Middle Corridor,” said Iain Rawlinson, chief commercial officer of APM Terminals Poti, in a statement announcing CMA CGM’s Caucasus Georgia Express service.
“This is a trade which is in its infancy, but with a container penetration rate estimated at less than 5% of the potential market, and a $250bn economy, the opportunities for cargo growth over Poti are enormous.”
CMA CGM’s CGX services transports cargo from Poti to Piraeus, Greece and Ambarli port in Istanbul, Türkiye. The first call of this new service was made in February.
“The Middle Corridor leg connecting Georgia and Romania via container liner services has not yet proven its viability,” said analysts from Informall BG. “Many intermodal operators are utilising railway routes via Türkiye to avoid time-consuming transhipment via the ports of Poti and Constanta.”
Imports were largely responsible for the growth in Georgia’s container trade in 2022. Georgia was a popular destination for Russian citizens fleeing their home country because of the conflict and other war-related policies. This immigration wave has pushed up import demand.
“Cargo volume through Georgia has continued to be strong since the start of the conflict in Ukraine,” said a spokesperson for APM Terminals Poti. “While we do not have visibility on the final destination of all cargo transiting through the port, the information we have is that most of the cargo growth has been destined for Georgia itself, or for the countries that have had their traditional supply chain through Russia curtailed as a result of the international sanctions.”
APM Terminals Poti, owned by Maersk, is sanctions compliant and does not do business in Russia nor with Russian interests, it said.
