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What is Belarus’ opinion on Dnipro — Black Sea transportation — interview

20 November 2019   Konstiantyn Ilnytskyi

Existence in the Republic of Belarus of a state-owned enterprise called Belarusian Shipping Company indicates the country's interest in development of shipping traffic in the maritime direction. How this enterprise emerged, what it deals with and intends to do — the correspondent of Ports of Ukraine asked about this Andrii Kasianiuk, Director of the Belarusian Shipping Company.

What is Belarus’ opinion on Dnipro — Black Sea transportation — interview

In May 2005 by the Decree of the Ministry of Transport and Communications of the Republic of Belarus in order to develop the Belarusian foreign trade freight traffic through the sea ports as well as implementation of the program for development of inland water and sea transport by 2010, the republic an unitary enterprise (RUE) ‘Interavtorans’ was transformed into the RUE ‘Belarusian Shipping Company’. In 2009 following privatization process the shipping company was transformed into an open joint-stock company where the state has 99.8% of its shares.

Our country exporting considerable number of various goods as well as purchasing a great deal of imported raw materials and goods is interested in enhancing the infrastructure of export-import transportation. In addition, the Belarusian Shipping Company is actively involved in this process, primarily as a freight forwarding company. The strategic direction of the company’s activity is to set up a national carrier on the basis of JSC ‘Belarusian Shipping Company’ for delivery of export-import and transit freights from the former Soviet republics and other foreign countries by means of river-sea vessels to / from the Republic of Belarus as well as to create port infrastructure in the republic with constant guaranteed waterway dimensions.

Having partnerships with the leading container line — COSCO SHIPPING Lines, being a freight forwarder we provide door-to-door container transportation worldwide, carry out a full range of port forwarding in Klaipeda, Riga, Odesa, Chornomorsk, Yuzhny as well as complete the accompanying and customs documentation.

We deal with chartering of vessels, provide services for transportation of containers, general and bulk freights by the vessels among ports of the Republic of Belarus and Ukraine. We arrange railway and road transportation, loading and unloading operations in river ports and railway stations of Belarus.

— What fleet do you have? According to UNCTAD, in 2018 maritime fleet under the flag of Belarus totalled 5 vessels with an overall modest deadweight of 5 thousand tons.

— These vessels are not related to the Belarusian Shipping Company. For many years, despite its name that is more suitable for the carrier, we have worked and are working as a freight forwarding and logistics company. Our staff consists of 29 people. Only in 2019 we became a ship owner having acquired a share in Nadezhda motor vessel built in 2002. The vessel has a deadweight of 1,348 tons and is designed for transportation of both general and bulk freights. It can transport containers. Its length is 73.8 meters, width is 12.2 meters, and maximum draft is 2 meters. It has documents issued by the Russian River Register allowing it to operate on the rivers, lakes and sail non-recurrently in the coastal region — in fact, from Belarus along the Dnipro river to port estuaries and under one-time permits to the sea ports of Ukraine.

Our shipping company has permission from the Ministry of Infrastructure of Ukraine for cabotage transportation among ports and port points of Ukraine. In these directions from Kyiv to Kherson and Mykolaiv the Nadezhda vessel is currently operating.

This August at Staiky port point in Kyiv region the Belarusian Shipping Company together with Agrostudio Group loaded 1,300 tons of wheat onto the Nadezhda motor ship with a barge platform and transported the consignment to Mykolaiv port. The event became a milestone since for the first time  the grain shipment was carried out from the northernmost shipping point of Ukraine.

Our company has professional water managers who are well aware of the Dnipro and Prypiat rivers. This year for the first time our river transport workers ‘ have sniffed the sea’ delivering to the transshipment site in Banka Trutaieva region a batch of barley which was loaded onto PANAMAX vessel. So there have already been real reasons to be called the shipping company.

In the 2000s considerable scopes of potassium chloride from Belarus were exported through Mykolaiv seaport where Belarusians even invested proceeds in Greentour-EX transhipment terminal. According to recollections of the former head of the port Vasyl Zubkov, up to 1.3-1.4 million tons per year. This freight was predominantly delivered by the railway. But about 140 thousand tons came from Belarus by water transport along the Dnipro river. Why were these shipments terminated?

— As far as I know, at that time a lack of return loading was a very acute problem for the fleet. It called into question the profitability of transportation. Regarding the main freight traffic flow, there was strong competition from the port of Klaipeda which provided very attractive conditions for cooperation. When the global economic crisis struck in 2009, the traffic flow of potassium chloride was ultimately switched to the Lithuanian port. In Klaipeda, by the way, Belarusian potash employees became co-owners of the terminal for transshipment of mineral fertilizers. And in Mykolaiv they sold their share, the terminal was redesigned to operate with grain freights.

Belarus, being a continental country, does not have a direct access to the seas but can reach the seas owing to the river. Moreover, our country has something to stand out with. The total shipments of Belarus to the non-CIS countries are estimated at 35 million tons per year. The major part of them is carried out using maritime transport. Still the main volume of freight traffic flows is directed to the ports of the Baltic Sea due to existing logistic schemes.

We believe that for the time being, a lack of stable through cargo shipping from Belarus along the Dnipro river to the Black Sea is wrong.

Let me give you a small but very illustrative example. Today, Belarusian potassium chloride is imported to Turkey on the Marmara sea. And it is transported there through Klaipeda port. It is paradoxically, isn't it? Moreover, these are usually not very large batches of 3-5 thousand tons. It means very ‘convenient’ volumes, for example, for a convoy that can bring a shipload lot at a time to the Ukrainian estuary port and transfer it to a river-sea ‘three-thousand’ or ‘five thousand’ vessel.

— Which Belarusian freight traffic flows could be switched to waterways in the direction of the Black Sea?

— Products manufactured by Belaruskali are, without any doubts, the number one candidate for such transportation. In second place I would put the products of the Belarusian Metallurgical Plant (BMP). At present, part of their export metal is transported through Klaipeda port, and another part is transported through the Odesa port where freight is delivered by wagons.

Minsk Tractor Plant shipping its products worldwide is a major exporter. It runs assembly plants in various countries, for example, in Venezuela. Unassembled tractors are dispatched in containers, and are to be assembled on-site. There is a great potential for transportation of oil products from the Mozyr Oil Refinery JSC, timber, building materials etc. down the Dnipro river. The raw materials for chemical production, slag for cement production, granulated meal, sunflower oil, cereals and other cargoes to be competed for can be transported from Ukraine and through Ukraine upstream the Dnipro river

To achieve this it is necessary to solve two main problems. First, we have to shift away from the cargo fleet traditionally used in Belarus. Typical vessels are ‘one thousand’ ore carriers with deck stowage. They are all of the river class, and can only sail along water storage basins with one-time permits issued by the Register. In order to arrange through traffic on the Dnipro river, hold vessels of the lake class as well as tug boats of the lake class are required. To go down, for example, to Mykolaiv port by caravans with shiploads of 3 thousand tons each.

In this direction, our small enterprise is going to develop its fleet. On Nadezhda vessel  we intend to raise cargo holds by increasing the sides and modifying the design of hatch covers. We also want to attract additional tugboat and two barges. On the basis of two flat-top river  barges it is proposed to make one barge with holds and sliding covers designed for coastal sea navigation with a carrying capacity of 1,700 tons.

What is the second objective?

-The second one is to create modern port infrastructure in Belarus which has constant guaranteed waterway dimensions.

For example, we have three ports in Mozyr, Rechitsa and Gomel provided with all necessary services and permits for export-import operations. However, in reality, vessels are only able to enter there during one month in the spring when there are floods. At any other times, the depths do not allow it.

On the other hand, ports do not have developed infrastructure that enables to process efficiently various freight. For example, poultry farming for the needs of which from 25 to 50 thousand tons of meal are imported monthly from Ukraine is highly developed in Belarus. The meal is delivered to enterprises including those located near the Dnipro and Prypiat rivers as well. For shipping companies it could be a great opportunity of return loading. Yet existing ports do not have the infrastructure to transfer such freight.

As a radical solution to the problem, we have elaborated business plan for the investment project to create a transport and logistics complex as well as a new port with container terminal on the banks of the Dnipro river in the Bragin district. It is only 23 kilometres from Kyiv Reservoir. This place was chosen since the natural depths of the Dnipro river reach 3 meters there meaning that it is possible to deal with a large-capacity fleet according to the river standards.

While developing the project we proceeded from the fact that it was not enough to build a port, we also needed an effective fleet delivering freights to this port. In addition, the project should be implemented on the basis of public-private partnership.

The project envisages construction of 200 meters long berth and 3 more mooring berths. Container terminal is designed for storage of 1200 TEU. It is foreseen to procure portal frame crane with a lifting capacity of 50 tons and 2 reach stackers. The project stipulates construction of 2 pusher ships and 3 integrated barges. On the route Belarus — ports of the Black Sea, it is anticipated to use set-up vessels with river-sea navigation area of Dnipro-max class; these are the pusher vessels of RSD67 project and the integrated barge of RDB67 project. The peculiarity is that under a total loading of the vessel of 450 TEU, the draft will be 2.6 meters.

The volume of investment in the project is estimated at the level of USD 50 million. It is anticipated that the port will be granted the status of ‘free’ with a preferential tax system for the import of goods and functioning of the business entities.

Are the lots of people wishing to invest  in the project?

— We are still actively facilitating and promoting it. The fact that investors are cautious is understandable since the success of the project can be affected by various circumstances occurred in both countries.

The most important thing is that the waterway should be ready for operation of the fleet. If we strive to intensify shipping along the Dnipro, Prypiat from Belarus to the Black Sea, then maintaining of the guaranteed dimensions of the navigation pass throughout this waterway is a primary objective. For Belarusian and Ukrainian vessel owners who have been actively increasing shipping in terms of their GDP in recent years, this is a very topical issue.

I will also point out that potential investors as well as vessel owners are waiting for what the Law of Ukraine on inland waterways will turn out to be, the drafts of which are now being actively discussed.

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