Return of Ukraine's Snake Island boosts trans-shipment export options

The recapture of a strategically significant island off the coast of the Black Sea port of Odesa by Ukrainian forces has enabled the restoration of transshipment activity in the region and could bring relief to hard-pressed logistics in and around the Sulina Canal.

Russian forces evacuated Zmiiny Island, known across the world as Snake Island, last week and claiming they were returning it in order to improve grain flows from Ukrainian ports.

The move means that transshipment - the action of transferring cargoes from one ship to another, typically larger, vessel at sea - through the Bystroe Canal has been restored, according to an official notice, forging another link between the Danube and the Black Sea.

The move is expected to bring relief to very tight logistics in the river ports along the Danube and potentially help manage the huge queue that has formed in the Sulina Canal - another key link in Danube logistics that connect the river to the Black Sea.

“Taking into account the liberation of the Zmiiny Island from the Russian troops and the accumulation of a large number of ships in anticipation of passage through the Sulina channel, it is possible to use the channel of the Bystre mouth of the Danube-Black Sea channel for the entry/exit of ships transporting agricultural products”, the notice said.

This channel was used prior to the war as an entrance to port of Reni - a small port that has taken on much greater significance since the Russian invasion began as it is now one of the few ports that is able to manage seaborne exports.

But the facility has a limited draft of only around 3.8 meters, and as such it used to be used as a port entrance for empty vessels, but could not be used as an exit once the ship was loaded.

That may hamper the use of the channel, trade sources told Agricensus.

"If someone can manage to dive to a draft of up to 4 m... then theoretically we could exit through Bystre, but this is only a river-sea boat, thus around 3,000 mt,” a broker said.

As such, even if they are able to enter Reni through the Ukrainian side of the channel, vessels would still have to pass through the Sulina Canal to exit to the Black Sea.

Ukrainian authorities also noted that the Bystroe Canal is under Ukrainian control, so does not require additional costs compared to Sulina Canal which is controlled by Romanian authorities.

However, trade sources do expect that the extra waterway could alleviate freight rates, although there is little evidence of that as yet.

UN humanitarian aid coordinator Martin Griffiths also commented on the news, saying that the agency was excited about the news, but it alone is “not enough to overcome the threat of world hunger. Only unblocking the Ukrainian Black Sea ports, which are currently blocked by the Russian army, is the best way to prevent global hunger,” the official notice on the Ukrainian agriculture ministry website noted.

That comes along with new rumors that appeared in the market last week, that a test grain vessel could possibly sail from Odesa port during the week within a corridor guaranteed by the United Nations.