Ukraine shipowner seeks to revitalise Danube market with newbuildings

Analyst at Informall BG, Daniil Melnychenko has said that rates on the Danube have declined markedly, and many operators have suspended operations or are only utilising a part of their fleet.

Vitaliy Kaminskyi COO at V-River, a Ukrainian owned and operated barge company, said: “I believe that April and May will likely be months of stagnation. Shipowners are adopting a more cautious approach and are waiting for better market conditions before putting their barges to work.”

He added: “Freight rates are not as desirable as we'd hoped, and survival in this market demands considerable effort. However, discussions within the shipping industry suggest a potential improvement in the months ahead. While we may not see the same results as last year, working during the season still holds promise for profitability.”

In addition, Kaminskyi points to some of the obstacles to be overcome by UDSC in order to establish services to the Upper Danube region, which has more stringent certification requirements for crews, and barge conditions.

“Finding a captain with the necessary documents is a challenging task nowadays, as such specialists often have long-standing positions in established companies and rarely switch them,” said Kaminskyi.

Currently most barge operators are transporting grains, including wheat, corn and barley, from Izmail, Reni, and Orlivka to Constanta, Romania, while imports such as fertilisers would head back to Ukraine.

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However, UDSC’s new larger bulk carrying barges aim to head further upriver to ports in Bulgaria, Austria, Romania, Moldova, Serbia, Hungary and others. “Here are enough options to put our fleet to work but it all comes down to freight rates,” explained Kaminskyi.

With barges heading further north the cargoes on offer would also be more diverse with metals and ores, sulphur, liquid cargoes, fertilisers, glass, as well as grains.

From time to time,” said Kaminskyi, “We get particularly interesting offers come in for transporting heavy-lift-type cargoes (oversized parts of structures and equipment).”

According to Kaminskyi UDSC also has a project that will see the carrier handle containers on the Danube, which, he said, could potentially overcome issues with the blockade of Ukraine's land borders and establish new trade routes.

“It's an ambitious idea, but if UDSC demonstrates good cargo turnover performance, it's likely that other participants in the maritime business will follow suit,” he said.

Melnychenko was more sceptical of the potential for such a project, pointing to the barriers that must be overcome to achieve this venture.

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“It requires specialised barges designed for container transportation, collaboration with shipping lines that provide container equipment, infrastructure for transhipment and storage of containers in river ports,” he said.

“It's a highly complex process involving multiple stakeholders, which entails high risks for the liner operator. As current practice in Ukraine shows, liner operators prefer to have full control over the container transportation process, including transportation along the Danube River,” he added.