The 2018 was the 25th anniversary of MAERSK Line on the Ukrainian market. For the reporting years, the company reached a considerable progress and fulfilled the strategic projects that influence development of the transport and infrastructure in Ukraine. The result of the company activities, the current status of the market segment, and the prospects of the container shipping were the topics of our interview with the General Director of MAERSK Ukraine, Roman Koloyanov.
— The company MAERSK Line operates in Ukraine for 25 years. What have You succeeded for the time?
In March 2018, we had an anniversary – 25 years on the market of Ukraine. During the time we have managed to achieve significant results. First of all, it is expressed and proved by the leading position of our company in terms of volumes of container shipping. For example, last year we shipped nearly 200 thsd TEU via Ukrainian sea ports.
— Why did the company decide to launch the service in Ukraine? What prospects do You see in MAERSK Line and MAERSK Ukraine development?
MAERSK Line interest in arriving on the market of Ukraine stemmed from the absence of container shipping as a way of transporting cargos in Ukraine in 1993. It was a new and prospective market. Today, this area in Ukraine still has a significant potential due to the low level of containerization in comparison with the European countries. Thus, the company has a significant field of work and can consolidate the achievements and widen the activities. This in turn created the stimulus to improve the quality of our operations.
— What is the share of agricultural products in the general cargo turn-over of the company?
The lion’s share of the company’s turn-over is occupied by the industrial wood and agriculture. In particular, the share of the agriproducts amounts to 50-55% of the total export.
— What are the most desired directions of grain and oilseed exports in containers?
In fact, the majority of export is directed to Asia, Middle and Far East and Pacific region. The directions of the shipping in containers totally depends on exporters and importers. Basically, the shipping in containers in many respects repeat the shipping in bulks.
— How would You characterize the tendencies of the shipping in containers of agriproducts in Ukraine? Is there a growth of the demand or not? Why?
Of course, the market of the shipping in containers is growing due to the growth of the export from Ukraine. For the last 10 years the figures increase from year to year. And this increase is provided on behalf of the agricultural segment. The main widening of the geography of shipping is attributed by the transportation of the processed agricultural products in particular. There are many markets that are easier to operate in terms of chipping in containers due to the size of the batches in demand and the particular geographic limitations. Additional growth of the shipping in containers is affected by the increase of the processed product output of grains and oilseeds. In particular, it is flour and vegetable oils in flexitanks and/or in bottles.
— In April 2018, MAERSK Line stopped its operations in SE Sea Commercial Port of Odessa. Herewith, since April the Japanese container operator Ocean Network Express (ONE) entered the port. Are these facts connected?
These two facts are absolutely not connected. The leave of MAERSK Line from SE Sea Commercial Port of Odessa is connected entirely with the inner reorganization and the need to transfer the service.
— Before MAERSK Line left SE Odessa Commercial Sea Port, Your company was present in the three seaports – in Odessa, Chornomorsk and Yuzhny. How would the presence of the company in two ports only affect the company’s operations and the further development?
If we speak of the presence of MAERSK Line in Odessa in short term before and after the leave, I should say that the company was a leader in 2016; from the end of 2017 and until now we preserve our leadership position in terms of the volumes of the shipping. Of course, the leave may affect to some extend the turn-over of cargos because we will lose the clients that are tightly connected to SE Odessa Commercial Sea Port. Every seaport has its advantages and disadvantages. Every client has its preferences, wishes and interests. But I am convinced that more coordinated work in Sea Commercial Ports of Yuzhny and Chornomorsk will allow us to compensate the losses and find new logistical decisions that will not only change but also improve the company’s position on the Ukrainian market.
— Do You mean the collaboration with the company TIS in terms of the launch of the regular full-length trains to Kyiv and Dnipro from the Sea Commercial Port of Yuzhny?
Yes, it is one of the large projects. I can say that the launch of the trains was one of the important reasons to transfer the service to the Sea Commercial Port of Yuzhny. For the moment we have two regular full-service container trains leaving the Sea Commercial Port of Yuzhny:
- To Dnipro, that was launched on 6th of September in 2017. The capacity totals to 100 TEU, the length of way is 630 kilometers, and the time is 19 hours;
- To Kyiv, that was launched on 31st of January of 2018. The capacity totals to 130 TEU, the length of way is 750 kilometers, and the time is 19 hours.
Also we continue to develop the train logistics in Ukraine that is an interesting area for providing import and export. Proof of that is the third train that was successfully launched on the trial basis in May to Kharkiv. Its travel time totaled 21 hours from the Sea Commercial Port of Yuzhny. Now, we are working on the tariff policy for the clients and in the near future this train will be introduced to the market of containerized shipping.
— At startup of the train Kyiv-Lysky – the Sea Commercial Port of Yuzhny, You planned to create a train yard for containers. At what stage is the launching of the yard for the containers?
In fact, it was created almost at the same time with the launch of the train. Today Kyiv-Lysky is a specific dry port for the cargoes in our containers. It accepts the imported and exported goods in containers. The first ones after the unloading are transported out by the importers and the others are loaded on the train and transported to the Sea Commercial Port of Yuzhny and loaded to the ship.
— In July 2017, the press-service of Ministry of Infrastructure of Ukraine announced to make the Sea Commercial Ports of Chornomorsk as the containerized grain hub. It supposed the introduction of the global operator of the container terminal HutchisonPorts. How would it affect the work of MAERSK Line? What do You think we should expect due this?
I would like to say that the development is always good. The appearance of the large global players on the domestic market always brings positive changes to the transport infrastructure. They bring to the country the international practice and the new technologies. The work of MAERSK Line is not going to be affected.
— As of March 2018, the State Service of Ukraine for Transport Safety did not approve MAERSK Line as a foreign navigation line that does not allow receiving 20% discount on the tonnage tax rate. To what extend this decision brings challenges to the work of the company? At what stage is the decision now?
As for now, we have registered one of our lines in the Sea Commercial Port of Yuzhny – the line ECUMED. Moreover, we prepare the documents to register new line – MEZ. Now, the new instruction of the registration is preparing.
— Since 1st of June of 2018 MAERSK Line has introduced special allowances for its services due to the bunker fuels cost growth. Also, the fuel cost is expected to increase significantly by 2020 due to the requirement of the International Maritime Organization (IMO) to reduce sulphur levels from 3.5% to 0.5%. How had it influenced the volumes of the shipping of Your company, and what results do You expect in the near future?
Indeed such allowance was introduced but we had to do it. MAERSK Line is the only line that had to make such as decision. Of course, for our clients that came as a shocking surprise. In the short-term period this brought some changes into our operations. Bit when several companies had to do the same the volumes of shipping have rebalanced.
If we speak again about the necessity to introduce the higher allowance rate I would say that the main reason was the significant price rise of the bunker fuel.
Considering the 2020 and the consequences of the requirements to reduce sulphur levels to 0.5% the analytics believe that the fuel switching would cost the industry nearly $60 billion. Of course this will affect the transporting prices for the clients. But in fact such an allowance is not a novelty for the industry in waters of the EU and the US.
— What problems the shipping in containers has? Thus, what measures are needed to be taken to eliminate the problems?
If we speak about the measures to be taken from apart of the government it would be the drastic decrease of the port charges. Ukraine must not and cannot be the most expensive country in Europe in terms of port charges. This indirectly holds the development of the global trade. Today, in fact the Ukrainian exporters and importers actually pay more for the shipping.
Also I believe that the special attention should be paid to the simplification of the registration of the cargos and transferring to the electronic document circulation system.These will allow to significantly fasten the logistics in general.
Some changes are needed in legislation. The multimodal transportation in UKraine should become such, that means that the change of the vehicles must be simplified, the cargos should have the possibility to be transported through the bills of lading and to inland destinations and in transit regime as well. Ukraine has a great potential that will allow to compete with the other countries in terms of transit cargoes that in turn will bring positive changes to the economy of the country.
— How would You characterise the condition of the maritime infrastructure in UKraine? What prospects of the development do You see?
If we speak about the shipping in containers the maritime infrastructure is more than developed. The capacities of the shipping in containers exceed the demand. Whereas the land infrastructure should be developed as it cannot keep up with the current cargoes flow.
— What are the prospects of the marine transport development in Ukraine in Your opinion?
In fact the maritime transport development depends on the economic development of the country, on the place of UKraine on the global scene. The transport is the mean to provide the exports and imports, whereas the product and its quantity depends on the economy of the country.
The segment of the shipping in containers will grow due to the increase of the volumes of the processed raw materials. It is possible that there will be the redistribution of the export cargo and the share of the finished products in containers will increase significantly.
Interviewed by Konstantin Zeykin, APK-Inform Agency
