Blockade kills logistics companies

Up to 70% drops in turnover were reported by local logistics companies due to the blockade of the EU border with Ukraine by farmers. Entrepreneurs are facing difficult decisions about laying off workers or even closing businesses. They are also concerned that in the future, goods from the territory may bypass Poland.

The blockade and farmers’ protests at the Dorohusk and Hrebenne border crossings with Ukraine continue on February 9 this year, with other crossings blocked since the last months of last year. The main demands of the protesters are that the European Union abandon green deal regulations and block imports of agricultural products from Ukraine. From the point of view of local logistics companies, the inability to cross the border efficiently means increasing losses, and businesses in the industry that operate in other regions of Poland are also expected to suffer from the situation.

According to Andrzej Mikutra, director of customs agencies at the logistics company JAS-FBG, the losses caused by the nearly six-month blockade of the EU border with Ukraine already amount to several hundred thousand zlotys.

 – It is not only companies directly related to transportation that are losing out on the protest of one social group. Radically lower turnover is experienced by all entities trading goods with Ukraine. Finally, almost the entire TSL industry, exporters, importers are suffering from the protests. Contracts are being terminated or huge fines imposed for undelivered cargo, he stresses.

Jacek Korzeniewski, president of Success Logistics Group and vice president of the Kresy Export and Logistics Development Association, stresses that the situation is causing completely absurd and costly changes in border transportation.

 – There happen to be cases where when we have a cargo to transport from a Polish port to a Ukrainian city, it goes to Ukraine by a circuitous route, that is, through Hungary and Romania. This was the case with the cargo which was supposed to go to a place about 200 kilometers from Poland, and due to the blocked border, it had to travel an additional 1,200 kilometers. I know that other companies do the same or pay hefty fines for failing to fulfill transportation contracts. Goods that come to us from Ukraine also usually take a circuitous route. If nothing changes in this matter, one can already draw the sad conclusion that all trade with Ukraine will bypass us in the future – he points out.

Leszek Kapka, owner of the OSCAR Group, adds thatit is a common situation that cargoes bypass Polish border crossings and go through Hungary or Romania. Especially since a highway is currently under construction in Romania that will connect the country to Ukraine, which could have a negative impact on all Polish logistics. Farmers are apparently unaware of this.

According to the Polish Chamber of Shipping and Logistics, the border blockades have undermined confidence in Poland as a predictable partner able to ensure order in its own backyard. The Romanians have obliquely taken advantage of this, and regaining confidence and lost cargo streams will not be easy. 

In April, it was possible to organize a meeting of farmers and entrepreneurs with the governor of Lublin. Its immediate effect was to shut down the protest at the Dorohusk crossing by the governor. At the end of April, talks also succeeded in increasing vehicle traffic at the Hrebenne crossing, but farmers still intend to protest there.
Many entrepreneurs operating in the border areas understand some of the protesters’ demands. One of them, for example, talks about the need to restore tariffs on Ukrainian agricultural products. It is, after all, about the unequal treatment of agricultural production in the EU and Ukraine, where the same quality standards do not apply. Besides, domestic carriers were in a similar situation, as the requirements for Ukrainian road carriers were and still are significantly lower than for Polish ones, which specifically includes the EU’s abolition of permits for Ukrainian drivers to enter the Community for bilateral and transit traffic.

According to A. Mikutra, in a situation of radical declines in the turnover of Polish trucking companies, and the farmers’ protests are causing them, the natural reaction will be to cut costs, that is, among other things, to lay off employees. In an extreme situation, it may be necessary to close some of the smaller companies, because carriers are unlikely to count on government support to save the companies.

At the end of April this year, the farmers’ protest in front of the Hrebben crossing was successfully ended. Farmers tried to extend the blockade, but the mayor of the municipality of Lubycza Królewska (the crossing is located on its territory) did not agree to it, citing losses incurred by entrepreneurs as the reason.

– The authorities’ decision demonstrates an understanding of the arguments of entrepreneurs responsible for the border service of our foreign trade and transit. The broader public interest, EU border service obligations and our raison d’etre have been taken into account – stresses Marek Tarczyński, chairman of the Polish Chamber of Shipping and Logistics Council.

Article developed with Namiary na Morze i Handel magazine

phot. Namiary na Morze i Handel magazine