Russia Increases Attraction of its Black Sea Ports

Due to the development of the Black Sea region as one of the major regional centers of world trade, the ports and countries intensify competition. Recently, Ukraine has taken a number of measures aimed to increase the attractiveness of its maritime ports.

Russia also intends to increase the attractiveness of its Black Sea deep-water ports as a result of growing competition from Ukrainian ports. The Russian president instructed the government to study the possibility of increasing the throughput capacity of access infrastructure and “capabilities to handle ships of large tonnage” in the port of Novorossiysk.

According to market operators, now Russian shippers use Ukrainian ports for large vessels, but because of the complications in the political situation there is a need to increase the volume of transshipment through the port of Novorossiysk. In particular, it refers to the need of increasing grain handling capacities to 5 MMT per year.

UkrAgroConsult estimates the total capacities of grain handling facilities in the port of Novorossiysk to be around 14.0 MMT per year.

During the current year, Ukraine is conducting a series of reforms aimed at deregulating the port industry, including the simplification of processing of cargoes and ships, as well as dredging.

It should be noted that Russia pursues the development of its own port capacites and trying to waive the use of third countries’ ports for handling of its cargo for several years now. For the period of 2010-2014, volumes of Russian goods transshiped through the ports of Ukraine and the Baltic countries fell by nearly a quarter, while its own ports have increased the number by 20%.

An even more sharp drop in transshipment of grain of Russian origin through Ukrainian ports is due to the development of their own grain-handling capacities: at the end of 2014 the transit of Russian grain in Ukrainian ports was absent, whereas previously the volumes could reach 4 MMT per year.

UkrAgroConsult believes the need for dredging in the ports of the Black Sea region is a response to the demands of modern trade regarding reduction of transportation costs share, especially in the face of declining commodity prices.