Grain transportation costs rise across Ukraine: most sharply on short routes

In Ukraine, the cost of road transportation of grain and other agricultural products has increased. Over the past week, short routes up to 300 km have risen the most, with rates increasing by 9–14%.

This is evidenced by data from the company Ukrvantazh AGRO. The increase in transportation costs was recorded on almost all main routes. On routes longer than 500 km, rates increased by an average of 1–11%.

The main reason for the rise was high demand for grain trucks amid an insufficient number of available vehicles in several agricultural regions. The highest demand for road transportation was observed in Dnipropetrovsk, Sumy, and Kherson regions, while significant volumes of cargo were also generated in Kirovohrad region.

The main cargoes remain wheat, barley, and rapeseed. Meanwhile, the geography of transportation is changing: more and more agricultural products are heading to the Danube ports and to Ukraine's western borders. Significant volumes of grain are being transported to Izmail, Reni, and Orlivka, while active routes to Lviv and Khmelnytskyi regions remain.

Queues at borders reduce the number of available grain trucks

Additional pressure on logistics costs comes from queues at road border crossings. As of August 31, at the Yahodyn – Dorohusk crossing, 1,174 loaded and 1,270 empty trucks with a mass over 7.5 tonnes were waiting.

At the Porubne – Siret crossing, 765 trucks were in line, and at Orlivka – Isaccea, another 409.

Due to long waits at the border, a single truck can make fewer trips during the week. As a result, the actual supply of transport decreases even without a reduction in the total number of grain trucks, and shippers have to compete for available vehicles.

The situation is further complicated by the redirection of part of the export flows to the western borders and the Danube direction. Longer trips increase vehicle turnaround time and the market's need for transport.

In the near future, the cost of transportation will depend on the volumes of agricultural products, the situation at border crossings, and how export flows are distributed between the Danube ports and the western direction.

Based on materials from: Latifundist, UkrAgroConsult