Ukraine's exports fell by 47% in the second quarter of 2022, compared with the second quarter of 2021, because of the Russian aggression against the country and the blockade of its seaports.
Volodymyr Husak, the director general of the Ukrainian Federation of Transport Employers (FRTU), stated this during the European Economic and Social Committee’s expert hearings on the European Commission’s action plan on Ukraine-EU Solidarity Lanes to facilitate agricultural exports from Ukraine and bilateral trade between Ukraine and the EU, the CFTS portal reports.
According to him, Ukraine’s agricultural exports were somewhat less affected, falling by 35%.
The export of agricultural products from Ukraine amounted to USD 1.4 billion In July 2022, which is 15% less than in July 2021. "However, there remains a great potential for an increase in exports from Ukraine to the EU. In particular, it is necessary to increase the transfer of freight cars through border crossings in western Ukraine," the FRTU said in a statement.
The federation added that Ukraine has the capacity for the transfer 3,400 freight cars per day but only 1,800-1,900 are actually transferred. According to the federation, transferring an additional 1,500 freight cars per day will result in an additional 3 million tons of Ukrainian exports worth at least USD 500 million per month. "This is an issue caused not just by the different widths of railway tracks in Ukraine and the EU. Much can be achieved through administrative and organizational measures," the federation said.
In particular, Husak called on the European Union to increase the working hours of phytosanitary and veterinary control agencies as much as possible (ideally, these agencies should operate daily and around the clock). "As an alternative, the EU could consider suspending or simplifying its own phytosanitary controls with the recognition of the relevant Ukrainian certificates. Simplification of phytosanitary and veterinary controls will also facilitate improvement of the situation at truck crossing points, where lines stretching many kilometers long have recently been observed," he said.
According to him, single border and customs checkpoints should be established for trains. Currently, both sides conduct separate inspections of trains, resulting in delays averaging 6-8 hours on each train.
Husak noted that the opening of Ukrainian ports to allow grain exports was a positive development. "However, it is necessary to open Ukrainian ports for the export of all goods, and not only agricultural goods. Ukrzaliznytsia (Ukrainian Railways) has lost 60% of its freight volume since the beginning of the Russian aggression," he said.
"Ukrzaliznytsia raised the rates for all types of freight by 70% on 29 June 2022 to compensate for its loss of income. Ukrzaliznytsia may continue raising its rates if the volume of rail freight transportation does not increase (and the opening of ports for the export of all types of cargoes will allow it to increase). And this will make the logistics component of most of Ukraine’s agricultural exports (by rail) so expensive that exports may become unviable. Therefore, it is necessary to facilitate the expansion of Ukrzaliznytsia’s cargo base as much as possible," Husak said.