The issue of restoring container shipping in the ports of Greater Odesa is strategically important for Ukrainian logistics. Currently, these processes are ongoing, and major container lines are returning to Ukraine. How well will expectations of restored shipping align with reality?
Peak Season Surcharges: Analytics in Figures
A critical question is whether other container lines will follow the initiative of Hapag-Lloyd and CMA CGM in introducing peak season surcharges for shipments from Asia to Northern Europe and the Mediterranean. We have observed the World Freight Index continuing to rise. This is a common market trend. Currently, all lines are introducing such surcharges, and we are seeing a rapid increase in prices. Since mid-April, prices have been rising by $400-500 almost every week. We will see how this develops, but some analysts agree that the market is returning to the peak prices characteristic of the COVID-19 pandemic period: $15,000 for 40-foot containers and $9,000 for 20-foot containers. Overall, the global economy is experiencing a peak in its development following recovery from the pandemic and the instability of 2022-2023.
Pre-war Indicators: Real Prospects or Unjustified Expectations
Another important question is whether current logistics capacities allow for a return to pre-war container handling levels in the ports. The capacities themselves have not disappeared. The infrastructure of the ports of Greater Odesa is quite robust. Some carriers and volumes of shipments have disappeared on the scale that existed before the full-scale invasion. There will definitely be no infrastructure issues. The existing terminals handled volumes of millions of TEUs per year. So, there is no need to worry about this issue. Moreover, cargo heading to the western region of the country will move through Gdańsk, even after the victory. It is also essential to consider the current structure of container shipping. Now, the entire flow has shifted to Chornomorsk, accounting for 10-15% of the market. This month, Odesa is being added. So, it can be predicted that by the end of the summer, about 30% of cargo may be directed to the ports of Greater Odesa. Some cargo will remain in Constanța, and some in Polish ports. Regarding distribution, it will be split between road transport and rail.
Features of cargo flow when transportation resumes
If the trend of returning lines to the ports of Greater Odesa continues, many are interested in the question of what the cargo flow will be. This concerns the priority of import, export, or transit. It is worth noting that exporters are the least afraid to take risks. There is a simple economics at work here: if 1-1.5% of cargoes are affected by shelling during shipment, this will not affect the overall profitability picture. So, exports have made great strides, and this is good news. Chornomorsk port is now showing the best performance, as it is pricier to ship from Odesa port. As for imports, they are also being shipped, but the real situation shows that importers are more afraid to risk their cargo. This is logical, as there are significantly more risks than when exporting. The company has paid for the goods, they have almost arrived, so their potential destruction becomes more critical. With this in mind, shipment in Constanta, Romania, or Polish ports looks more reliable and justified according to importers.
Container line return trends
Today, Maersk container lines have returned, but this happened through agents. Hapag also returned directly, but through feeder vessels. MSC is bringing its vessel to Odesa in June. CMA announced the resumption of direct ship calls in mid-July. Most of the major lines have been contacted, and the rest are expected to do so, and the outlook is positive.
The insurance issue
When talking about the return of container lines in a full-scale war, it is impossible to avoid the issue of cargo insurance because it is about risk management. Full insurance against war risks is expensive and ranges from 1 to 1.2%. Compared to the standard rates of 0.2-0.25%, this issue remains open. The feasibility and profitability depends on the value of the cargo, the determination of the sender and the consignee.
Return of large container ships: between hope and realism
Whether large container ships can call at the ports of Odesa region during the attacks by Russia is another relevant and still open question. When we discuss container ships with a capacity of 10+ thousand TEU, it is currently impossible. The reasons are market conditions and objective military conditions. We will be able to talk about it no earlier than in 2 years. But if we are talking about container ships of 3-5 thousand TEU, which will reduce the cost of transportation, then if the current market dynamics are maintained, it will be no earlier than winter 2025.
Thus, it remains to be seen what factors will continue to influence the operation of container ships in the ports of Greater Odesa and what the trends will be.
