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ICS: Do not let Ukrainian, Russian seafarers become ‘collateral damage’

Crews and commodities could be impacted by Ukraine port closures

(Image by VesselsValue)

An adviser to Ukraine President Volodymyr Zelenskyy’s chief of staff announced operations at the country’s ports have been suspended after Russian forces invaded by land and sea on Thursday. What the world needs to watch is the duration of these closures and the timing of where we are in the ag export cycle. 

Lloyd’s List Intelligence data is showing as many as 116 vessels currently queuing in the southern inlet to the Kerch Strait and an additional 52 vessels waiting to the south. And in tracking the situation, VesselsValue has generated a map showing vessels are stopped and apparently waiting between the Black Sea and the Sea of Azov.

MarineTraffic posted a video of vessels sailing near the Bosphorus strait that seemed to be changing their routes over the past several hours.

The International Chamber of Shipping issued a warning Thursday morning of the human capital component of this blockage — Ukrainian and Russian seafarers are now locked out. According to the ICS and BIMCO Seafarer Workforce report, 10.5% of the global seafarers are Russian and 4% are Ukrainian.

“The safety of our seafarers is our absolute priority,” stressed Guy Platten, secretary general of the International Chamber of Shipping. “We call on all parties to ensure that seafarers do not become the collateral damage in any actions that governments or others may take. Seafarers have been at the forefront of keeping trade flowing through the pandemic and we hope that all parties will continue to facilitate free passage of goods and these key workers at this time.”

ICS tells American Shipper that in order to maintain unfettered trade, seafarers must be able to have crew changes freely across the world. ICS warns that with flights canceled in the region, this will become increasingly difficult. The ability to pay seafarers also needs to be maintained via international banking systems. 

Ukringorm is reporting Ukraine has submitted an official appeal to Turkey to close the Bosporus and Dardanelles straits to Russian ships.

Agriculture context

Jesper Buhl of BullPositions tells American Shipper the timing of this invasion needs to be put into context.

“This is the low season for ag exports coming out of Ukraine and Russia,” Buhl said. “If this invasion happened in July or August when exports are at their peak, this would be a different story.”

At this time, Buhl told American Shipper, the world can fill the Ukraine bucket of corn, wheat and barley. The  EU, U.S. and Argentina can export if the Ukrainian ports continue to be inoperable for four to six months. The commodities will just cost more because they will have to travel a farther distance.

Buhl said what matters most is the duration of port closures. 

“If this drags out between six to eight months, you have 10 to 15 million tons of Ukrainian corn, wheat and barley not going anywhere,” said Buhl. “If that happens, the only commodity that the U.S. will export out is corn. The United States consumes its wheat and barley.”

Buhl crunched the trade flows for both wheat and barley and compared the exports year-over-year. In a note to clients, he explained the flow of trade and reality of agriculture exports.

Buhl writes that Ukraine, Romania, and Bulgaria exported more than 33 million tons of wheat and barley by the end of January 2022. Fueling this increase is the frontloading of +11 million ton in exports compared to the same period time.

“This sharply contrasts the downbeat export observed from Russia so far in the 2021-2022 season. Russian estimated exports of 21 [million tons of] wheat and barley in the July-January period of 2021-2022, [which is 11 million tons] below the same period of 2020-2021. A low-level export being driven by a 13 million ton production drop and a sharp decline in export competitiveness as a result of increased Russian grain export taxes. It needs to be added that the Russian wheat and barley flows traditionally dominate other Black Sea origins in the February to end-June period.”

Tanker impact

VesselsValue also has looked at the possible impact on the energy sector, reporting that Russian exports of oil and refined oil products account for 5.2% of global seaborne trade on tankers and 6% on liquefied natural gas carriers. 

“Such significant proportions are not readily replaceable from other sources,” VesselsValue said. 

According to VesselsValue analysis, 7.4% of the world’s tanker fleet and 3.5% of the LNG fleet would be at risk.


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Lori Ann LaRocco

Lori Ann LaRocco is senior editor of guests for CNBC business news. She coordinates high profile interviews and special multi-million dollar on-location productions for all shows on the network. Her specialty is in politics, working with titans of industry. LaRocco is the author of: “Trade War: Containers Don’t Lie, Navigating the Bluster” (Marine Money Inc., 2019) “Dynasties of the Sea: The Untold Stories of the Postwar Shipping Pioneers” (Marine Money Inc., 2018), “Opportunity Knocking” (Agate Publishing, 2014), “Dynasties of the Sea: The Ships and Entrepreneurs Who Ushered in the Era of Free Trade” (Marine Money, 2012), and “Thriving in the New Economy: Lessons from Today’s Top Business Minds” (Wiley, 2010).