The impact of the Ukraine conflict in internal and external grain transport costs

Abstract

Armed conflicts are known to have significant consequences forthe shipping industry, namely the closure of ports and increased risks for navigation, thus preventing or hindering the steady flow of imports and exports. The recent conflict in Ukraine illustrates this, as it has disrupted severely global grain transport chains. A number of alternative transport chains have been used but its capacity is limited and costs, both internal and external, are deemed to be much more significant, impacting on the economies but also on the environment. This paper presents a quantification of the impact of this conflict for various possible alternative transport chains. A methodology is presented to evaluate the internal costs, emissions, and external costs of transport and applied to evaluate these parameters for chains having a common origin in Ukraine and destination in a representative major North African port. The main conclusion drawn regarding the impact of this conflict is that costs and emissions may easily double for the alternative transport chains.

Keywords

• Grain
• Multimodal Transport chains
• external Costs
• emissions
• Logistics
• Armed Conflict