This week in waters off the Crimean Peninsula, a Russian-Ukrainian naval skirmish disrupted a significant amount of regional shipping trade.
On 25 November, Russian naval forces fired upon and detained two Ukrainian gunboats, one tug and 24 mariners and escorted them to the port of Kerch in Crimea. Russia also closed the Kerch Strait passage by enlisting a tanker to block the fairway below the recently opened bridge that links Crimea to mainland Russia.
Russia’s moves in the Kerch Strait have served to expose a geopolitical weakness for Ukraine. A substantial level of the Ukrainian economy is reliant on export trade from ports including Berdyansk and Mariupol in the Sea of Azov.
In fact, about 25% of Ukraine’s export revenue comes from products shipped out of Mariupol, alone.
By 0800 on 26 November, the Kerch Strait had reopened with hordes of ships waiting to transit between the Black Sea and Azov sea, and Moscow had proven that it can halt maritime trade in the region.
What will now follow politically is unclear. What is obvious is that Ukraine will need to take practical steps and find alternative trade routes that avoid the Kerch Strait.
A multimodal solution to the problem is the most likely scenario.
Creating a rail link along with barge transportation from Berdyansk and Mariupol to a terminal on the Black Sea or further inland would be one option. A link to the Dnieper River and its network of lakes, such as Kakhovske – transporting cargo past Kherson and into the Black Sea – would be another.
Either option would benefit from additional tugs, barges and multimodal terminals, and given the tensions in the region, it would not be surprising if Ukraine had already begun working on a solution.
The Dnieper River is a key conduit for grain exports. To expand on that trade, Ukrainian shipping and industrial group Nibulon is building a US$19M transhipment terminal on the Dnieper River at Ternivka, near Zaporizhzhia and south of Dnipro.
Interestingly, Nibulon is also building a fleet of inland river tugs to escort convoys of non-self-propelled vessels along the Dnieper River and Buh-Dnipro-Lyman Canal. One of those tugs is already in operation and a second is scheduled for delivery in December from Nibulon’s shipyard.
An even more expedient workaround would be for Nibulon or another Ukrainian entity to purchase pre-built vessel stock from shipyards in Turkey or some of those under construction by the Damen Group.
Whatever decision Ukraine takes, the point is this: a viable backup trade route complete with a tug and barge fleet ready to serve it would offer the country some amount of economic security in the face of escalating tensions with its much more powerful neighbour.