In Ukraine, there were record harvests of grain and grain legumes in the 2021/2022 marketing year (MY, July-June) — 84.6 million tons (+19.7 million tons compared to the previous year). This is the largest harvest of grain and grain legumes since Ukraine’s independence.
The previous record for harvesting grain and grain legumes was set in the 2019/2020 marketing year. 75.1 million tons were harvested that year. But in the 2021/2022 marketing year, this figure was exceeded by 9.5 million tons.
After the grain is harvested in the fields, it should be transported to storage, processing, and export locations (through border crossing points: seaports, road, and rail crossing points). The entire grain and grain legume crop forms a cargo base for transport companies (by road, rail, river, and sea). The greater the grain harvest, the more cargo to be transported by different types of transport. At the same time, transport companies also deliver foreign grain and grain legumes in transit through Ukraine (from one border crossing point to another) and import grain crops to Ukrainian consumers.
Road, rail, sea, and river transports are in close coordination with each other during the transportation of grain and grain legumes. The vast majority of crops grown in Ukraine are exported to various countries around the world through seaports. Grain is usually delivered to seaports by rail, road, and river.
The schematic cooperation of transport types is as follows:
- Road transport
The leader in the transportation of grain and grain legumes in Ukraine (in tons) is the road transport that delivers grain from fields to elevators, railway stations, and approach lines, seaports, processing plants, and other locations. Most of the grain is delivered to railway loading points (railway stations, approach lines) by road and then it is transported for export to seaports by rail. In such a way, grain and grain legumes are usually delivered to railway stations by road.
Unfortunately, there is no complete and reliable information on the volume of grain and grain legume transportation by road, as most of such transportation operations are not covered by shipping documents or are registered with cargo underweight, or are not included in the statistics at all. However, most grain is transported by road, as this transport type is involved in all logistics chains.
- Railway transport (Ukrzaliznytsia)
The next largest volume of grain and grain legumes (in tons) is transported by rail. The statistics of rail transportations is more complete and reliable. Information on the volume of transportation of grain and milling products is formed every month based on registered railway receipts for their transportation in wagons and containers.
For example, according to Ukrzaliznytsia, in July-December 2019, 21.2 million tons of grain and milling products were transported by rail, in July-December 2020 — 19.3 million tons (-1.9 million tons compared to 2019), in July-December 2021 — 20.8 million tons (+1.5 million tons compared to 2020 and -0.4 million tons compared to 2019). Given the record grain and grain legume harvests in 2021/2022 MY, Ukrzaliznytsia should also significantly increase grain transportation volumes, but the actual figures do not show a sharp increase in grain transportation by rail.
Grain and milling products are transported by rail mainly for export (88-89% of total transportation). In July-December 2019, 18.7 million tons were transported by Ukrzaliznytsia for export, in July-December 2020 — 16.9 million tons (-1.8 million tons compared to 2019), in July-December 2021 — 18.5 million tons (+1.6 million tons compared to 2020 and -0.2 million tons compared to 2019).
As for domestic transportation, Ukrzaliznytsia transported 1.6 million tons in July-December 2021, and this is less than in the same period in 2020 (-0.8 million tons) and 2019.
The transit carriage of grain and milling products showed positive dynamics. In July-December 2021, 0.6 million tons were transported by rail, and this is much more than in the same period in 2020 (+0.3 million tons) and 2019 (+0, 6 million tons). Such a significant increase in transit grain carriage is due to the transportation of grain in the amount of 563 thousand tons from Moldova to the port of Reni. In particular, between the following border stations:
Petrostal (exp.) – Reni-port-export (Ukrzaliznytsia’s transportation distance is 48 km): in July-December 2021, Ukrzaliznytsia transported 343 thousand tons of Moldavian grain in transit (59% of Ukrzaliznytsia’s grain transit);
Bolhrad (exp.) – Reni-port-export (Ukrzaliznytsia’s transportation distance is 35 km); in July-December 2021, Ukrzaliznytsia transported 76 thousand tons of Moldavian grain in transit (13% of Ukrzaliznytsia’s grain transit);
Reni (exp. – Reni-port-export (Ukrzaliznytsia’s transportation distance is 4 km); in July-December 2021, Ukrzaliznytsia transported 67 thousand tons of Moldavian grain in transit (12% of Ukrzaliznytsia’s grain transit);
Frikatsei (exp.) – Reni-port-export (Ukrzaliznytsia’s transportation distance is 24 km); in July-December 2021, Ukrzaliznytsia transported 57 thousand tons of Moldavian grain in transit (10% of Ukrzaliznytsia’s grain transit);
As for the import carriage, in July-December 2021, transportation volumes were steadily insignificant, and during this period, Ukrzaliznytsia transported only 0.1 million tons, which is at the level of similar periods in 2020 and 2019.
The figures of Ukrzaliznytsia’s transportation of grain and milling products only of Ukrainian harvest (for export and domestic carriage) for the last 3 years are shown per month in the chart. As you can see, Ukrzaliznytsia’s figures for 2021 do not show significant growth and are mostly lower than in 2019 and 2020. Only in September, the figures for 2021 were higher than the figures for 2019 and 2020. It follows that the record harvest of grain and grain legumes in Ukraine has not led to a significant increase in grain transportation by Ukrzaliznytsia.
- River transport
In Ukraine, river cargo transportation is carried out along the Dnipro, the Danube, and the Southern Buh. In particular, grain cargo is transported on these rivers.
Unfortunately, there is no statistical information on grain transportation on all these rivers. But more than 70% of all cargo transportation is carried out on the Dnipro River and such information is publicly available.
In particular, in July-December 2019, 3.1 million tons of grain cargo were transported on the Dnipro River, in July-December 2020 — 2.3 million tons (-0.8 million tons compared to 2019), in July-December 2021 — 2.5 million tons (+0.2 million tons compared to 2020 and -0.6 million tons compared to 2019).
Transportation of grain cargo on the Dnipro River didn’t increase significantly compared to 2020 and showed a decrease compared to 2019.
- Maritime transport
According to the Administration of Sea Ports of Ukraine, in July-December 2019, 30.1 million tons of grain-producing cargo were handled in seaports (99% of them are grain), in July-December 2020 — 24.7 million tons (-5.4 million tons compared to 2019), in July-December 2021 — 33.1 million tons (+8.4 million tons compared to 2020 and +3.0 million tons compared to 2019). Given the record harvest of grain and grain legumes in 2021/2022 MY, seaports significantly increased grain handling (transshipment) volumes. At the same time, a significant part of the grain-producing cargo is handled for export (95%).
Export of grain crops, grain legumes, and flour
According to the Ministry of Agrarian Policy and the State Fiscal Service, in July-December 2021, Ukraine exported 32.6 million tons of grain crops, grain legumes, and flour. This exceeded exports in the same period in 2020 by 6.7 million tons and exports in the same period in 2019 — by 1.0 million tons.
Almost all grain exports of Ukraine (93-95%) are carried out through seaports, to which 55-60% of cargo are delivered by rail, 30-35% — by road, and 7-10% — by river.
Given that Ukrzaliznytsia transported 18.5 million tons of grain and milling products for export (57% of total exports) in July-December 2021, we can conclude that 14.1 million tons of other grain crops, grain legumes, and flour are transported by road and river. At the same time, there is a significant increase (by 5.1 million tons) in grain transportation for export by road and river, while Ukrzaliznytsia decreased this figure by 0.2 million tons compared to 2019 and showed a slight increase by 1.6 million tons compared to 2020.
Ukrzaliznytsia’s ongoing problems with grain cargo transportation and a significant increase in tariffs for its services lead to a shift of grain transportation to road transport that is becoming more mobile and flexible every year. Ukrzaliznytsia is actively losing its competitive advantages.
**The analytics was prepared by experts of the Center of Railway Transport Research and the Better Regulation Delivery Office.
Source: URM