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Russia-Ukraine truck transit war hits Europe, too

February 16, 22:04 UTC+3 Alexandrova Lyudmila
© Anton Vergun/TASS

MOSCOW, February 15. /TASS/. Unfolding truck transit war between Ukraine and Russia, which flared up entirely through Kiev’s fault days ago, has harmed transport companies in both countries and the manufacturers of goods they deliver, including European ones. Traffic jams in some European countries, for instance, on the border with Lithuania, are another side effect. Experts are certain that the root causes of the current situation are rather political than economic ones, and a negotiated settlement will be the sole way out. In the longer term the means of transportation should be diversified, many analysts add.

Ukraine on February 15 halted the transit of Russian transport companies’ trucks through its territory. The decision followed a similar ban the Russian Ministry of Transport adopted for Ukrainian carriers. The Russian freeze on truck transit was imposed in retaliation for political measures by Ukrainian nationalists. On February 1 Ukrainian radicals in the Trans-Carpathian Region declared an open-ended boycott of Russian trucks. A short while later radically-minded activists in nine Western regions of Ukraine joined the campaign.

Russian Deputy Prime Minister Arkady Dvorkovich says about 100 Russian trucks currently remain in Ukraine and another 500 trucks are unable to leave the European Union to get back to Russia through Ukraine and Belarus. The idleness of one Russian truck on the border costs at least 200 dollars a day. The Russian Transport Ministry said earlier on Tuesday nearly 200 Ukrainian trucks have been detained in Russia.

Russian cargo vehicles are unable to reach the European Union using overland routes, because Poland is closed to them, too. Moscow and Warsaw have so far failed to come to terms as to the number of trucks allowed to transit either country this year. In December 2015 Poland demanded Russia should revise the quotas (by raising Poland’s to 100,000 and reducing Russia’s to 20,000). The two countries are still in talks.

Russian cargo carriers now have only one option left - to send cargoes through Belarus and the Baltic countries from where they can proceed to the EU by ferry. This solution is far costlier. The Baltic countries and Belarus are already experiencing problems with the influx of Russian trucks. Long jams develop on the border with Lithuania.

Cargo deliveries are a major line of business for companies in Russia, Poland, Lithuania and Belarus and, to a smaller extent, in Ukraine. In principle, in order to avoid border crossing problems customers may turn their backs on Russian logistics companies in favor of their Belarussian and Baltic competitors, but economic losses for Russians would be tangible, indeed.

"A negotiated solution will have to be identified and alternative means of transportation looked for simultaneously," Professor Viktoriya Gerami, of the Higher School of Economics, has told TASS. "We are not for competition among different means of transport, but for their interaction. This is precisely where the latest developments are pushing us."

The current situation is a blend of politics and economics. "In any case a negotiated settlement will have to be looked for. There is no other option. Otherwise, the customers will have to pay," said Gerami, the head of the HSE logistic infrastructures management chair.

In her opinion container traffic by rail and by sea should be developed first and foremost. This is a world trend. But far from all items can be container delivered. For instance, many foods constitute an exception.

Gerami believes that the problems with Poland will most probably be settled. "Last time we made concessions. This time we should stand firm. Their traffic is enormous in contrast to that of our companies. There must be parity. They seek supremacy."

In fact, alternatives are very few," the science doyen of the Automotive Transport Research Institute, Vadim Donchenko, has told TASS. "True, ferry and container traffic can be developed further, but the pressure on railways is rather strong already. The situation as it is, an agreement should be sought by all means."

"If the number of Russian companies shrinks as a result of competition, it will be a hard blow on our carriers, because our industry is rather large. International transportation companies operate a combined fleet of 40,000 trucks. There are so many people and so large budget incomes involved! We should not concede our market. There must be parity and balance. Both foreign and our own companies should have the right to do business on that market. Proportions may vary. A 50/50 ratio is optimal. For the time being our share is smaller, although it has grown in recent years."

Although it might seem at first sight that the point at issue is Russian-Ukrainian problems first and foremost, this dispute has affected Europe, too. "Our businesses have partners in the European Union. Long lines at European borders are not the sole problem. We are not getting their goods, they don’t get money for them. The sanctions-related tensions have lasted for while by now and the inability to deliver goods merely turns the situation from bad to worse.

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