The blockade at the border with Poland has crippled Ukraine’s land trade. But a new Black Sea route is providing an economic lifeline.
For weeks, a border blockade by Polish truckers has severely hampered Ukraine’s overland trade, preventing the war-torn country from exporting tons of grain, delaying the delivery of vital military equipment and squeezing the country’s already meager revenues.
But an economic lifeline has emerged from what was long viewed as a high-risk trade route: the Black Sea.
Ukraine’s government said on Tuesday that more than 10 million tons of cargo had already been exported through a shipping corridor recently established by Ukraine to evade Russia’s effective blockade of its Black Sea ports. Half of these exports are agricultural products, Oleksandr Kubrakov, Ukraine’s infrastructure minister, said in a statement.
The announcement, which came just a day after Polish truckers resumed blocking one of the main border crossings with Ukraine, was a rare bright spot in an otherwise difficult period for Ukraine, marked by inconclusive fighting against Russia and eroding American support for continued military aid.
Ukraine has scored “a major victory” in the Black Sea, President Volodymyr Zelensky said at a news conference on Tuesday, highlighting his country’s success in securing the new maritime trade route. Russia, Mr. Zelensky added, is no longer “blocking Ukraine’s economy” via the sea.
The contrast between the success of the Black Sea route and the disruption at the Polish border is a striking development from the start of the war, when companies worried about shipping goods through the disputed waters of the Black Sea turned to land routes.
But Ukraine’s ability to fend off Russia’s navy and political upheaval on its western borders may now be changing that calculus.
“The Black Sea corridor already bears sizable positive implications for the Ukrainian economy and will likely become one of the key growth drivers next year,” said Olena Bilan, chief economist at the Kyiv-based investment bank Dragon Capital.
Ms. Bilan added that trade through the corridor had likely more than compensated for the economic loss caused by the border blockade, noting that Ukraine’s total exports rose by nearly $500 million from October to November, the month the blockade started.
Still, the border disruptions have taken a heavy toll on the Ukrainian economy. Volodymyr Balin, the vice president of Ukraine’s Association of International Road Carriers, told reporters on Tuesday that the country’s economy “has lost more than 1 billion euros,” about $1.1 billion, as a result.
The blockade was triggered by a complaint from Polish truckers that cheap competition from Ukrainian counterparts who are not subject to European Union rules on working hours and wages is cutting into their profits.
The Polish and Ukrainian governments have been holding regular talks to solve the issue and Donald Tusk, the newly elected Polish prime minister, has pledged to end the blockade.
But the dispute has dragged on for weeks, and on Wednesday Ukrainian officials said that more than 5,000 vehicles were still lining up to enter Ukraine through four blocked checkpoints.
The blockade has not only hampered trade but also the deliveries of wartime supplies, according to Ukrainian soldiers. A Ukrainian commander said on Tuesday that the drones he had ordered were blocked at the Polish border, urging people on social media to help him buy new ones.
In light of the recent border disruptions, analysts say that Black Sea trade might grow in importance.
Ms. Bilan, of Dragon Capital, said she estimated that commodity exports through the corridor could rise to 7 million tons per month, up from a projected 5 million tons in December, and that exports of high-value products “may partially reorient from the blocked roads to seaports.”
The corridor — which hugs Ukraine’s western Black Sea coast and provides a passage to the territorial waters of countries under NATO protection — was launched in mid-September, after Moscow pulled out of a United Nations-backed agreement that had allowed Ukraine to ship its grain by sea.
Following the collapse of the agreement, Russia threatened that it would regard any ship approaching a Ukrainian port as a potential military threat. It has since repeatedly targeted Ukrainian port infrastructure.
Still, Ukraine’s army has largely managed to secure the new route through a series of ambitious military operations. The Ukrainian government also launched an insurance program last month to provide affordable coverage to shippers sailing the corridor.
So far, the route has been a relative success.
Mr. Kubrakov, the infrastructure minister, said 337 ships had loaded cargo in Ukrainian ports and sailed through the corridor since it was launched, or about 112 vessels a month.
That is more than the average monthly number of ships that sailed the Black Sea under the U.N.-backed agreement, according to figures compiled by Andrii Klymenko, the head of the Black Sea Institute of Strategic Studies. He added that Ukraine was exporting 3.2 million tons of products every month through the corridor, up from 2.7 tons under the U.N.-backed agreement.
Mr. Klymenko said he expected Russia to strike more port infrastructure and vessels in an attempt to derail the use of the corridor. Last month, Ukraine said a Russian missile had struck a commercial ship, killing a port pilot and injuring three crew members and a port worker.
A prosperous Black Sea trade means “Ukraine is earning additional money, including for the budget that funds the military,” Mr. Klymenko said. “Russia strongly dislikes this.”
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Blocked by Polish Truckers, Ukraine Turns to the Black Sea to Boost Trade - The New York Times
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