The government wants to increase transport on the Dnipro River to reduce freight costs and remove trucks from the Ukrainian roads.
New numbers by the River Information Service of Ukraine, RIS, show that freight traffic on the Dnipro River in Ukraine has increased by 35 percent for the first ten months this year to 11.62 million tons. It is 3.01 million tons more than in last year.
The RIS informs that most freight is for the construction sector, which reached 7.93 million tons and grew by 84.4 percent compared to last year. The authorities don’t explain the vast increase, but the previous year’s economic slowdown at the pandemic’s beginning may have had an effect.
The numbers also show that the volumes of grain freight grew by 6.6 percent to 2.57 million tons, while the transportation of metal decreased by 27.8 percent.
Part of the plan
While it is unclear why freight transport on the Dnipro River is increasing right now, the Ukrainian government last year approved the law “On Inland Water Transport,” aiming to improve freight transport on the Dnipro River.
“Thanks to the implementation of this law, we will be able to revive the cheapest and most environmentally friendly way of delivering goods – river transportation and to create efficient river logistics. This, in turn, will increase freight traffic to 30 million tons per year and the economic effect for the state to UAH 13-16 billion annually,” said the former Minister of Infrastructure of Ukraine Vladyslav Kryklii back then.
Ukrainenu previously wrote about the law and what it could mean for Ukraine. Increasing freight transport on the Dnipro Rover to 30 million tons per year would mean more than a doubling of the average volumes in recent years. Ukraine has some of the worst car traffic in the world, and it, therefore, makes sense to focus on the Dnipro River and its potential to remove trucks from the roads.
“In addition, the law is expected to improve competition in the market, increase investment through equal conditions and transparent rules, and create new jobs for people. The transfer of part of the freight from highways to the river will help to significantly unload the road traffic and reduce the cost of their repair. For example, 1 million tons of freight transported by river and redirected from land transport reduces the cost of road repairs by UAH 1 billion over four years,” said Kryklii last year.
Investments are already on the way
It is not only the Ukrainian government that sees potential for freight transport on the Dnipro River. Ukraine Business News has also reported about interest from several companies, and the EU’s ambassador to Ukraine, Matti Maasikas, has also talked positively about the changes. Maasikas last year argued that Ukraine only uses 10 percent of its potential for freight transport on the Dnipro River.
One of the major freight companies on the country’s rivers is Nibulon. The company last year announced that they will build a new terminal on Dnipro for freight transport. It is a $23 million project in the Dnipropetrovsk region. The company is not alone. According to Ukraine Business News, Danube Shipping Company last year announced that they are raising 200 million euros to modernize its freight and passenger transport on its rivers.
The company Argentem Creek Partners LP, based in New York, will invest $75 million in a terminal near Odesa to increase the Ukrainian freight of grain on the country’s rivers. Similarly, the media Angro Portal writes that eight silos with a total capacity of 117,000 tons will be built with a possible annual freight of 2.5 million tons, which is also a step towards increasing freight transport on the country’s rivers.