Bread’s Path: New Grain Delivery Schemes

The world is facing a global food crisis caused by the Covid-19 pandemic and rising fuel prices. Full-scale invasion of Ukraine will exacerbate the crisis for millions of people, pushing up the price of food and electronics around the world, according to a report released by the UN.

For more information about how global supply chains will be impacted by blocked sea lanes and tools linked to the logistics industry can be used to cope with the new reality’s challenges, we spoke with Natalia Iwanowa-Kolakowska, Deputy Regional Director for EU Countries at AsstrA.

The crisis

“Today's food crisis has arisen mainly due to three factors: first, in 2021 there have been climate disasters like droughts in North and South America, floods in Australia, and abnormal heat in Europe. Second, there have been supply chain disruptions caused by Covid-19 and official responses like the PRC's "zero tolerance" policy. Third, the full-scale invasion of Ukraine has sent economic “shockwaves” around the world.

After the invasion of Ukraine began, the Russian navy imposed a blockade of the country’s ports, effectively freezing 20 million tons of grain, corn, and sunflower oil intended for export. Representatives of a number of countries, international associations, and independent organizations have been working to identify alternative transport solution for months. Among the grain export options evaluated was a scheme for delivering cars and railways from the southern regions of Ukraine to the Polish port of Gdansk, from where the cargo could be sent via ship to Africa. During the peak season in August 2022, 4.6 million tons of grain were exported, with 3 million by sea. The remaining 1.6 million tons of grain were sent by road, rail, or ship on the Danube river.

The difference between railway gauges used in Ukraine vs the EU complicates alternative delivery schemes. In addition, the number of grain carriers in Europe is limited and at harvest times there are barely enough dedicated vehicles to transport EU-produced grain. At this time of year, increased volume requires the optimization of carrying capacity and a larger number of grain carriers. Manufacturing them takes time, energy, and money.

It remains a priority to improve the efficiency of Ukrainian border crossing points by, for example, improving the availability of veterinarians and building temporary warehouses on the Ukrainian border.

Grain from Ukraine

According to a statement published in The Guardian, up to 60 Ukrainian grain carriers will be sent by the end of the first half of 2023 to a number of African countries to prevent starvation in the continent’s poorest countries

Government agencies, NGOs, and private corporations will work together on this delivery scheme. The first three ships are scheduled to be sent from Odessa to Sudan, Somalia and Yemen. The German-funded pilot ship has already left for Ethiopia.

Swiss-headquartered AsstrA-Associated Traffic continues to develop delivery schemes, adapt logistics offerings to market requirements and find individual solutions for each corporate client, even when the market outlook is most uncertain.