Odessa Port Defense Look-ouy

Service members of Ukraine's Territorial Defence Forces stand guard in the Port Of Odesa, Ukraine, Handout via REUTERS

The Maritime Blockade Of Ukraine Is Working

John Konrad
Total Views: 89905
March 6, 2022

By Captain John Konrad (gCaptain) In the early days of the war, the rapid intermodal supply of materials via roads, rail, and airports is important for winning battles. In today’s war, Russian military forces are struggling to handle land and air logistics, but that may not matter in the long run because winning early battles doesn’t translate into long term success.

To win a war you need massive logistics. You need a constant flow of heavy supplies like food, ammunition, and fuel. To move large amounts of heavy material you need ships. You need the fourth arm of defense. You need sealift.

There has been no formal blockade of Ukraine by Russia, although perhaps a traditional sea blockade is not necessary. The US and NATO have not pushed back Turkey’s request to keep warships from all countries out of the Black Sea effectively blockading both Ukraine – and neighboring NATO members Romania and Bulgaria – from naval support. NATO may have taken Turkey’s request – under the Montreux Convention – for no warships to enter the Black Sea too literally. Typically during an event of this magnitude, the US Maritime Administration (MARAD) will start loading civilian manned navy reserve ships with humanitarian supplies, and Military Sealift Command would ready our unarmed hospital ships to help. The Navy, however, sent their closest hospital ship, USNS Comfort, to a shipyard last week effectively removing her from service for months.

MARAD has done little to help.

Also Read: Here’s Why Navy Aircraft Carriers Can’t Help Ukraine

On the commercial side, sanctions are working to choke Russia’s economy but economic sanctions did not stop Odesa from being mined to prevent commercial ships from entering the country’s most important port, and the rest of Ukraine’s ports have been largely cut off from commercial maritime trade by soaring insurance costs and concern over seafarer safety.

Can Humanitarian Aid Break Through The Blockade?

The USNS Trenton, an unarmed fast response ship, recently moved into the Aegean Sea – which adjoins the Bosphorus Strait and the Black Sea – but has stopped at the Island of Crete. According to public AIS data, she is the closest US-flagged ship to the conflict. According to the US Navy, the USNS Trenton was built to “support overseas operations, conduct humanitarian aid and disaster relief” and is ideally suited to move medical supplies and sealift refugees. At a speed of 43 knots, she could arrive in Odesa in less than 48 hours if the US Navy greenlights a relief effort and if Turkey lets her through the Bosphorus.

USNS Trenton
USNS Trenton a Spearhead Class fast response ship. Photo via US Navy and Austal

American sealift support, even aboard civilian crewed humanitarian capable ships like the Trenton, is unlikely.

Despite the US navy’s slogan of “I intend to sail in harm’s way” American Admirals have become risk-averse in recent years and sources close to the pentagon tell gCaptain it is unlikely they will send an unarmed ship into the Black Sea for fear of escalating tensions with Russia.

Also Read: Red Over Red, The Failure Of U.S. Navy Leadership

The US Navy may be right to proceed with caution. The Trenton is unarmed and Russia’s attack on civilian buildings and hospitals suggests it may push back on any efforts to deliver humanitarian aid which would give resistance fighters much-needed food and relief. “When waging war against a civilian populace cut off from food and supplies, humanitarian aid only prolongs the will of the people to fight,” said one senior military officer gCaptain interviewed.

Sealift Of Troops

So far NATO has not sent a single military ship through the Bosphorus all year. They have made no public announcements about reinforcing Romania – a NATO ally – ports but the Danish Navy has begun Sealifting troop equipment into Estonia with UK Royal Navy support.

Economic Blockade

On the commercial side, the International Transport Workers’ Federation (ITF) designated the Northern Black Sea and the Sea of Azov a ‘Warlike Operations Area’ forcing shipping companies to think twice before sending ships manned by innocent civilians into Russian or Ukrain waters. This, combined with soaring insurance rates, has effectively blockaded Ukraine from commercial trade, military sealift, humanitarian aid, and refugee evacuation.

Concerns about seafarers have extended beyond the war zone. gCaptian knows of at least one group working to evacuate the families of Ukrainian seafarers working at sea. Meanwhile, Frank Coles, former CEO of one of the world’s largest ship crewing agencies, warned of global crewing concerns and noted last week that the majority of the world population is thus in nations that did not vote to condemn the invasion.

The war in Ukraine already affected international trade in February. Russian exports are expected to slump sharply. Ukraine is largely cut off from international maritime trade, there are practically no more calls at the Black Sea port of Odesa said the Keil Institute today.

According to the latest data update of the Kiel Trade Indicator, global trade is declining significantly compared with the previous month (price and seasonally adjusted), and the signs are negative for almost all economies.

According to the latest data update of the Kiel Trade Indicator for February, world trade is expected to decline significantly by 5.6 percent compared with the previous month (price and seasonally adjusted). This is the biggest slump since the outbreak of the COVID-19 crisis in spring 2020, abruptly interrupting the recovery trend of recent months.

“Although the conflict between Russia and Ukraine only escalated in the last week of February, uncertainty, sanctions, and increased goods inspections to comply with sanctions already appear to impact trade around the globe. Already in mid-February ship movements indicated weak trade in February, sanctions against Russia have reinforced this negative trend,” said Vincent Stamer, head of the Kiel Trade Indicator.

Western Trade Suffers Too

For almost all economies, the signs of the Kiel Trade Indicator for February trade are negative. In Germany, imports are expected to fall unusually sharply compared with January (-3.9 percent), and exports are also likely to decline (-3.8 percent). The indicator also points to negative values for EU imports (-1.6 percent) and exports (-2.8 percent).

In the US, ship movements indicate lower exports (-3.9 percent) and slightly positive imports (+1.2 percent). The reverse is true in China, where values are minimally positive (+0.3 percent) for exports, while a negative (-3.4 percent) for imports. Still, the omicron variant could weigh on China’s trade.

Russian Sanctions

For Russia itself, the Kiel Trade Indicator shows a sharp drop in exports of 11.8 percent compared with January. In the port of St. Petersburg alone, 17 percent fewer goods were shipped in February.  Shipments out of Russia’s largest container port were comparatively low during the entire month, sanctions have likely put pressure on them towards the end of the month.  Russian imports, on the other hand, are expected to show only a modest decline of 1.6 percent.

“The situation in Russian trade is complex, but it seems that the sanctions imposed by the West are having an effect. Russian exporters are likely to withhold more goods simply because of uncertainty about payment. Although major shipping companies have announced a halt to their deliveries to Russia, this only affects new bookings. Currently, old bookings will still be shipped to Russia as planned, provided they do not violate sanctions,” says Stamer.

In the Kiel Trade Indicator, Ukraine is only included in the group of other members of the Commonwealth of Independent States (CIS) excluding Russia. This group shows a negative value for exports (-4 percent) and a positive value for imports (+2.3 percent).

Ukraine Is Cut Off From World Trade

Volunteers fill sandbags to build barricades during Ukraine-Russia conflict, in the city of Odessa, Ukraine March 6, 2022. REUTERS/Igor Tkachenko

However, position data from container ships show that Ukraine is largely cut off from international maritime trade. No large container ship has called at the country’s most important port, Odesa on the Black Sea, since the outbreak of war.

“The February figures give a taste of the economic consequences of the war in Ukraine. In the coming months, trade in goods between the EU and Russia is likely to be significantly reduced due to sanctions, uncertainty but also voluntary restrictions by companies and the population,” Stamer said. “Increased customs controls to check compliance with sanctions against Russia may additionally lead to delays in maritime trade.”

Maritime Uncertainty

Markets love certainty, especially traditional markets like shipping that are based on old linear thinking models. As this war intensifies, however, certainty could become the rarest of all commodities. 

“As we enter the 3rd week of the Russia/Ukraine conflict, the uncertainty shipping stakeholders face is still far from being solved,” said Ami Daniel of the maritime risk analytics company Windward in this week’s breifing. “Everyday there are new speculations and rumors as to what will be the next step in the regulatory fight against Russia, making shipping stakeholders second guess their every move.”

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