Waiting times for vessels in Ukrainian grain trades have increased considerably in Istanbul, the hub for mandatory inspections under the United Nations safe passage scheme.
More than 120 incoming and outbound vessels have been clogged around the Sea of Marmara, the UN said this month. Waiting times for outbound, laden vessels “unfortunately” increased to an average of nine days after arrival in Istanbul.
Shipping agents in Istanbul speaking to TradeWinds on Wednesday said the situation has deteriorated since. One vessel had to wait for 22 days due to a lack of surveyors to carry out inspections. “Several clients are complaining,” said Nikos Marmatsouris of agent GAC Shipping.
Under the terms of the scheme, inbound and outbound ships must be vetted by UN, Turkish, Russian and Ukrainian officials, who check documentation and make sure there are no weapons or unauthorised cargo and personnel on board.
What adds to the delays is that even ships carrying grains within the Black Sea have to call at Istanbul before reaching their final destinations — even if they do not have to cross the Bosphorus.
The Istanbul-based Joint Coordination Centre (JCC), the UN body in charge of operating the inspection scheme, attributed the delays largely to the very success of the programme.
Following “the high and growing demand” displayed by the shipping community, the centre said it carried out more than 500 ship inspections from 1 August, when the safe corridor got up and running.
Analysts agree.
Black Sea bonus
“The backlog that has been created is a testament to the success of the trade deal, as more than 6.5m tonnes of agricultural commodities has been added to the trade supply and the seaborne trade in the Black Sea ports has been kept alive,” Xclusiv Shipbrokers said in a note on 10 October.
A reason for that high demand is the above-average freight rates that vessels can expect to achieve in the Black Sea. According to one market source, a handysize involved in the Ukrainian grain trade earns about $22,000 per day — net, after insurance payments.
That is $3,000 to $4,000 more than average for such ships.
Another market participant said he saw offers for prompt tonnage to carry grain through the Bosphorus to the Mediterranean at between $60 and $70 per tonne, which represents a time charter equivalent of $30,000 per day.
This is a considerable premium, especially for the kind of smaller and older cargo ships usually involved in the trade.
To cope with the greater workload, the JCC increased the average number of daily inspections between August and October from four to 11.
The UN, however, has found it difficult to hire more surveyors to increase inspections further.
Shipowners are also partly to blame, the JCC said.
“On more than 50 occasions, inspections could not be completed at the first attempt due to the lack of readiness of the vessel — this has been an additional contributing factor to the congestion at the Sea of Marmara,” it said.
The JCC urged masters and agents to follow procedures.
“Ships must be fully prepared and familiar with the requirements for inspection before they declare their readiness for inspection,” it said. “This includes compliance with fumigation and ventilation procedures, availability of proper and adequate testing equipment, and up-to-date and accurate documentation.”
