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In Mykolaiv port services of only one company are imposed — statement

17 October 2019, 19:14

In Mykolaiv port services of only one company are imposed — statement

Novik agency company demands to stop monopolizing market of the agency services in Mykolaiv seaport. The corresponding request is included in an open letter submitted by the director of Novik LLC Tariel Khajishvili to the Minister of Infrastructure of Ukraine Vladyslav Kryklii.

Khajishvili asks the minister to pay attention to the situation in Mykolaiv sea port. According to him, Mykolaiv branch of the USPA ‘has artificially created conditions under which only the selected agents have an opportunity to provide agency services’.

 ‘To bring light to the situation, it is necessary to understand the mechanisms allowing Mykolaiv branch of the USPA to exert pressure on business entities in the port — on companies providing agency services as well as directly on terminals providing transshipment and loading services for the vessel which, in turn, have indirect influence on the agent to be appointed’, the document says.

 ‘Mykolaiv branch of the USPA, through a group of people close to it, has full control of the companies that provide towing services for vessels, mooring services as well as  services of wagon supply and cleaning (which is mainly used to exert pressure on private terminals when distributing wagons). The selective system of influence on the agency company to be accepted for operation has two scenarios’, Khajishvili points out.

According to the first scenario, agent submits a pilotage request to the terminal, which normally accepts it (by putting signature and seal on the original of request confirming readiness for loading the vessel). The original of this request is further submitted to the USPA dispatcher for signature. ‘In the premises of Mykolaiv branch of the USPA there is an access control, and agent companies like ours are not allowed to enter it. If the company is not in the list of privileged, then the dispatcher will simply not go out to set a seal to the request. Thus, the vessel will stand until the vessel owner, shipper and terminal begin to incur significant losses and therefore will be forced to turn to an accepted agency company’, the document specifies.

According to the second scenario, Mykolaiv branch of the USPA finds the lever of pressure on terminal (the pressure methods the USPA can exert on the terminals are described above). In this scenario, the terminal does not accept the agent’s pilotage request at all without giving the agent’s vessel any opportunity to enter the port. It usually happens without any written responses since the pilotage request is a document that does not require a formal response. This impediment continues until the ship owner and the charterer begin to incur losses associated with the vessel, downtime and therefore are forced to appoint an accepted agent.

Using described mechanism of ‘pushing out’ marine agents from the market, Mykolaiv branch of the USPA has actually established a monopoly of one agent company in Mykolaiv sea port. ‘The major part of agency companies which had been operating in Mykolaiv for decades ‘left’ therefrom, lots of companies shut down. Some of the agent companies that continue to operate in Mykolaiv port, considering insignificant amount of their work, are present in the port purely nominally creating an impression of competitive market for agent services in the port. But this is far from the case’, said Khajishvili.

 ‘Our company received a nomination for sub-agentation of Astoria motor ship on 10 October 2019 which was to be loaded with about 10,000 tons (+ / 10%) of sunflower meal in Mykolaiv seaport at the NikMorService Nikolaev LLC terminal at berth No.9. The vessel arrived at the inshore of Pivdenny seaport (inshore mooring of Mykolaiv port is located there) and submitted ETA notice on 10 November 2019 at 12:00. By telephone, we notified the chief dispatcher of Mykolaiv branch of the USPA — Serhii Oleksiiovych Symenov — that the vessel was ready for loading whereat we received spoken replies of the following content: ‘Stay out of there — this war is useless to you’,  the director of Novik company indicates.

‘Thereafter the situation began to unfold according to the second scenario. The terminal verbally refused to accept the pilotage request referring to non-existent problems with the shipper. The vessel owner, in order to avoid further costs associated with downtime, was forced to apply to the accepted agent. Then the situation developed in a completely unexpected way — the accepted agent refused to service the vessel directly referring to my publication on Facebook from 9 October 2019 at 18:13 reasoning refusal by the fact that if they accepted the request, they would confirm the accuracy of my words. The situation is at a stalemate. Volume of cargo was accumulated and ready for loading, it had already passed customs clearance and orders had been issued. Since noon of 11 October 2019, the vessel had been standing at the inshore mooring awaiting confirmation of registration. The shipper’s contract is breached, the vessel owner incurs colossal losses associated with the ship downtime, the export has actually stopped. Today, on 17 October 2019, following nearly week-long downtime, the cargo owner has been urgently forced to seek an alternative site for ship loading — and such is the ‘Black Sea Shipbuilding Yard’, the letter said.

Thus, the criminal attempt of Mykolaiv branch of the USPA to monopolize agency services market only on one specific example led to direct shortfalls in the state budget. There is a high degree of probability of shortfalls not only on this vessel call, but also on all subsequent despatches of the shipper already planned in the future through Mykolaiv sea port.

 ‘Such gross attempts to monopolize the market not only lead to financial losses of all parties involved, but also to colossal image losses of Ukraine as a sea state. ‘This case is just one example of the problems faced by hundreds of companies providing services in the Ukrainian ports. We are asking you to intervene in the current situation without delay (all documents are available for submission). Since the marine business community has high hopes that it is under your control the Ministry of Infrastructure will finally establish order to the industry,’ the letter states.

Novik agency company has been providing marine agency services in the Ukrainian ports since 1999.

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