Ukrainian Danube Shipping sends first barge convoy with Nibulon grain to Constanta

MOSCOW. July 18 (Interfax) - Ukrainian Danube Shipping Company (UDP) has sent the first barge convoy loaded at the grain terminal of one of Ukraine's largest grain market operators, Nibulon, from Izmail to the Romanian port of Constanta, Ukrainian media reported UDP as saying on Telegram.

"The format of cooperation is maximally mutually beneficial. UDP gets a guarantee of stable fleet operations on the Lower Danube. Nibulon gets the opportunity to organize logistics, which increases its efficiency," the statement said. UDP added that it has a sufficient fleet reserve to meet the shipping needs of its partners.

The Danube export route is an alternative to Odessa ports, a strategic reserve, UDP said. "Keeping this reserve ready means providing work for grain terminals and the fleet. [...] But our efforts alone are not enough, support from the government is needed," the company said.

Danube grain logistics could compete with Odessa ports given a 30% discount on rail shipments to Izmail, UDP said, adding that such a discount is "not a preference and not a gift," since the reduced rail freight rate would be offset by increased cargo handling and river shipments that would boost budget revenue from the operations of terminals, the state port and fleet.

UDP also said it is continuing to work with Romanian partners on eliminating the canal toll and piloting, the port fee rate and conditions for using anchorages at the Constanta port. On the Dnieper River, payment for vessel lockage, passage through the Bug-Dnieper-Liman Canal and piloting for inland shipping vessels has already been eliminated to develop shipping.

"If we minimize costs at all stages, from the elevator [to loading] onto the vessel, the Danube route will grow in potential" and could evolve "from a backup to a main" route, the company said.

UDP ships cargo along the whole navigable part of the Danube, from Ukrainian ports to the port of Constanta in Romania and Kelheim in Germany and back. Cargo consists of iron ore, coal and coke, grain, metals, fertilizer and oil products. In 2023, most of the cargo traffic consisted of grain exports from Ukrainian ports on the Danube to Constanta, as well as iron ore shipments from Ukrainian ports to Serbia with return shipments of grains to Constanta.

Nibulon, which was founded in 1991, owned 27 transshipment terminals and complexes for receiving crops with combined storage capacity of 2.25 million tonnes, and a fleet of 83 vessels (including 23 tugboats) before the start of the conflict in Ukraine. The company also owned the Nikolayev Shipyard, cultivated 82,000 hectares of land in 12 regions of Ukraine and exported agricultural products to over 70 countries. The company's exports of agricultural products peaked at 5.64 million tonnes in 2021.

Nibulon now operates at 32% of capacity and it has moved its headquarters from Nikolayev to Kiev.