Volodymyr Demenko: Simple steps to increase traffic to the EU


Text by Mykola Kopylov
Volodymyr Demenko, General Director of Levada Cargo LLC (subsidiary of Lemtrans LLC)
Since the outset of the Russian invasion, we have learned that we had to be flexible and fast in order to survive. Every day we would work out new routes for the transportation of Ukrainian goods and try to negotiate future agreements with our European partners.
After the Ukrainian ports had been blocked, the goods were exported primarily by rail. It was important to convey to the Europeans that almost 100% of Ukrainian exports today depended on their position, decisions and readiness to ensure the transportation of Ukrainian goods from our border.
The issue of cargo delivery to European ports and consumers arose.

Our challenges
Firstly, no one in the EU anticipated or was ready for an avalanche of cargo from Ukraine. And this was to be expected since the EU cannot technically process and transport the volumes of export in our country.
In addition, we experienced a lack of Ukraine/EU cross-border infrastructure and rolling stock (containers, hopper cars, fitting platforms), both in Ukraine and in the EU.
The increase in the distance of cargo transportation has led to a dramatic increase in the cost of logistics, which sometimes renders transportation impossible. This is quite a big problem that Ukrainian manufacturers have faced. But Ukrainians have a superpower of adaptation.
Since 2014, when we lost our main sales markets in the CIS countries, we have been constantly adapting. While historically we worked with bulk types of cars such as gondola cars, box cars, etc., now the main foreign trade partners are the countries of Asia and the European Union, where container transport makes up more than 55%.
So we are continuing the path of progress toward containerisation that we started in 2014.

How to improve transportation
We spent quite a lot of time at the border facilities and came up with ways to increase the transportation of Ukrainian goods to Europe. These are various measures that do not necessarily require significant investment.
For example, we suggest increasing staff at docking stations in Ukraine and EU countries to enable 24/7 operation. Unfortunately, some EU stations are not open around the clock, which would allow for increasing the carrying capacity of the infrastructure and, accordingly, the volume of cargo transportation.
Other measures include:
1.    Increasing coordination of the transportation process with EU countries;
2.    Repair of border infrastructure to increase the carrying capacity. In fact, many border stations have not been upgraded for 10-20 years. Ukrzaliznytsia only now started to invest funds in infrastructure restoration;
3.    Streamlining the registration processes of customs, border and phytosanitary services. Ideally, a combination of inspection by Ukrainian and EU bodies, which will speed up the process of cargo clearance;
4.    Quota system for Ukrainian cargo in the EU ports.

It should be noted that cargo clearance has already sped up. We have also established positive dialogue with the border guard service and customs.
There is another problematic aspect that requires significant investment in new border terminals, in the EU port infrastructure. Unfortunately, it cannot be built in one year. There is also a need for fairly large investments in additional cars and containers.
But this is my firm belief that these transport corridors will still process significant traffic even after the end of the war.
The fact is that for the sales markets in the EU that are new to us, which are 200-300 km deep into the continent and equidistant from the main EU ports (Rotterdam, Hamburg and others), there is no better solution than intermodal transportation. And these transport corridors will stay there in the future.
The coming years will see a further process of integration of the Ukrainian transport system, particularly the railway, with the European one. Therefore, today’s situation can be used to create a new Ukrainian logistics system.

The biggest mistake today is not to invest in Ukraine. That is why we continue to invest in the terminal and our other projects, which means investing in Ukraine.
Lemtrans and Levada Cargo together with their partners (including N’UNIT) built and launched a container terminal on the Polish–Ukrainian border. This provided a real opportunity to further increase the capacity of the railway border crossing.


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