Rising shipping prices

With the Sea of Azov fully blocked by Russia – and Black Sea ports, including Odesa, not being operational for an indefinite period – Ukraine, the EU and UN are taking action to redirect trade flows and goods away from Ukrainian ports. Increasing the capacity of the Sulina channel connecting the Danube River with the Black Sea could be one option that would permit additional exports. Alternative transit through Danube Maritime Cluster ports could cover a part of global transport needs. Connections need to be made with ports such as Constanta, visited recently by the TRAN committee, and Varna (Bulgaria). Meanwhile, Turkey has forbidden access of all naval ships through its territorial waters, based on the Montreux Convention, and Ukraine has recently asked Turkey to take action over a Russian-flagged cargo ship carrying grain from Berdyansk port in the Sea of Azov. Bunker fuel prices have risen worldwide, over which Parliament has already expressed its concern. According to the UN Conference on Trade and Development (UNCTAD), the war in Ukraine is hindering trade and maritime logistics, in particular in the Black Sea region, leading to more global vessel demand and higher costs of shipping globally (see Figure 1). The war and the pandemic have affected global shipping costs. Disruptions in logistics and port operations, the destruction of infrastructure, and trade restrictions have increased marine insurance costs and fuel prices. Shipping distances have increased, along with transit times and therefore costs.