Thursday, July 7, 2022

How Ukraine has kept cargo ships sailing in the Black Sea despite Russian exclusion zone

Port facilities near Odessa in southern Ukraine.The Globe and Mail

At 6 am on Sunday, the vessels O. Solodunov and A. Lisenko set sail on an urgent mission – to secure a safe route for cargo ships to Ukraine’s ports around a huge exclusion zone imposed on the Black Sea by the Russian military, which said it is intended to conduct naval exercises there.

Maps showed that the only clear path left to Odessa and other ports was a kilometer-wide strip along the coast. But no one had checked depths there since 2017, a concern for companies reluctant to entrust valuable ships and cargoes to old data.

So the O. Solodunov and A. Lisenko were raced out of winter storage and dispatched for emergency hydrographic work. By 3 pm on Monday, they had sailed 450 kilometres, collecting soundings that confirmed depths of at least 15 meters through the narrow passage, enough for most ships sailing to Odessa and other nearby ports.

The rapid work to assemble new data formed a particularly dramatic part of Ukraine’s efforts to shield itself from the military threat that has encircled it, with Russian ships, attack helicopters and troops poised to attack from numerous directions.

The new bathymetric findings were quickly added to digital maps, allowing ships to continue their service to Ukraine in the midst of intense military threats.

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In the days that followed, there have been disruptions, although minor. At least one container ship skipped a call on Odessa, citing increased risks. Depth restrictions in the kilometer-wide corridor mean the heaviest vessels have either delayed, or set sail with partial loads of iron ore.

How Ukraine has kept cargo ships sailing in the Black Sea despite Russian exclusion zone

An amphibious assault ship of the Russian Navy sails near the Black Sea port of Sevastopol, Crimea, on Feb. 16, 2022.ALEXEY PAVLISHAK/Reuters

The designation of the Black Sea as a place of heightened risk by the Joint War Committee, a marine insurance advisory, has modestly increased insurance costs. Some freight rates have climbed, also modestly, and some shippers demanded prepayment for service to Ukraine.

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Customers were “nervous” after the declaration of the exclusion zone, asking “if this will influence container shipments,” said Katerina Balyutova, Odessa-based managing partner at Marine Container Service.

So far, those anxieties have proved largely unwarranted.

The number of vessels sailing to Ukrainian ports has been higher this week than in the same period last year, Yurii Vaskov, a deputy minister at the country’s Ministry of Infrastructure said Friday, continuing a trend of higher cargo movements this year linked to a healthy grain harvest and strong commodity prices.

“We see an absolutely normal situation in shipping right now,” he said.

It was his ministry that dispatched the ships to conduct new soundings. Russia had warned that naval training would begin Sunday evening. By then, the ministry had already sent out preliminary results from the hydrographic mission.

That effort won industry plaudits. “I can’t imagine what they could have done better,” said Andrii Kuzmenko, an Odessa-based shipping executive.

The scramble to protect shipping underscores the seriousness of the threat posed by recent Russian actions.

“Ukraine is not going to be a country – will probably lose its sovereignty – without Odessa. I don’t think there is any prospect for a Ukraine without access to the sea,” said Andrey Stavnitser, one of Ukraine’s most prominent port owners. His Yuzhne terminals move immense quantities of grain, iron ore, containers and mud for the manufacture of porcelain bathroom fixtures.

On Friday, the Kremlin said Russian President Vladimir Putin would oversee nuclear drills, while Russia-backed separatists in eastern Ukraine called for evacuations, amid unverified reports in Russian media of a large explosion in the region.

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The escalation in tensions there did not appear to be mirrored in the Black Sea, government and industry representatives said.

Indeed, the Russian navy does not appear to have conducted any exercises in areas of the exclusion zone near Odessa, Mr. Vaskov said. A few ships have sailed directly through the naval exclusion area, tracking data showed. “Some captains are crazy enough to actually go through the training zone,” Mr. Stavnitser said.

He cautioned that much uncertainty remains, including whether Russia will end the Black Sea naval training as scheduled on Feb. 19. “If the whole thing continues, it’s going to be a big problem,” he said. At particular risk is the port of Mariupol, which is important for steel producers. If conflict hampers shipping there, steel can move through his terminals in the Odessa area, but “I hope it’s never going to happen,” he said.

For now, a rise in insurance premiums has added US$2,500 in costs to a standard ship sailing to Odessa, considerably less than the US$20,000 increase in premiums on vessels sailing around war-torn Yemen.

That stands in contrast to the aviation industry, where insurers have balked at flights into Ukraine, leaseholders have ordered commercial aircraft to leave the country and commercial airlines, including KLM, have halted service.

Parts of the maritime industry possess a very different approach to risk, noted Gennadiy Ivanov, director of BPG Shipping and Kronos Bulkers. “There are owners whose vessels call on Somalia,” he said. Relative to that, Ukraine is “not a problem.”

He also expressed confidence that, despite foreign warnings of a Russian invasion that could take over the country, Odessa would be spared.

Any attempt to block ships to Ukraine, he said, would almost certainly block movements to Russian ports as well.

And, Mr. Ivanov added, Odessa occupies a unique spot in the Russian imagination. Built into the country’s second most important port by the czars, it became a Soviet naval base and has long been a popular destination for seaside recreation.

Russians “consider Odessa a Russian city,” he said. Bombing it “would be like the Italians bombing Venice.”

How Ukraine has kept cargo ships sailing in the Black Sea despite Russian exclusion zone

Drone photo of port facilities near Odessa in southern Ukraine. Nathan Vanderklippe/The Globe and MailThe Globe and Mail

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