Izmail/Reni–Constanța barge freight jumps by 7 USD/MT as record-low water cuts loading capacity — ASAP Agri
Barge freight from Ukraine’s Danube ports Reni/Izmail to Constanța jumped twice already from the start of July to around 28 USD/MT as of Monday, 20 July. Two factors pushed prices up: nature and human being. Critically low water levels in the Danube restricted normal loading and delayed shipment execution, while shelling escalation on POC ports increased the number of cargo offered for the Danube, Kateryna Mudriian, Lead Analyst for the Vegetable Oils Market at ASAP Agri, told Latifundist.com.
"The situation with barges on the Danube is more complicated than it seems. Water levels are historically low and continue to decline daily, leaving barges significantly underloaded. Freight indications are therefore highly conditional, as the final cost depends on the available draft, actual loading volume, vessel and cargo,” said Taras Panasiuk, Co-owner and Head of Freight Brokerage at Atria Brokers.
ASAP Agri compared the freight to Constanta barges vs coasters. For this, they take freight from the Danube to Marmara and make a minus 2 USD/MT. It showed that the sharp increase in barge rates has significantly reduced their competitiveness.
The difference this season vs 2022 and 2023 is higher risks that barges could be bombed by russia. Due to this, barge availability is more limited. If more exporters redirect cargoes to the Danube, shipowners could need at least two weeks to reposition additional barges, while persistently low water may continue to restrict their effective capacity.
“Market participants confirm that the maximum available draft at Cernavodă (which is one of the most difficult points in navigating the Danube) is currently around 2 metres, although it may be even lower further along the route to Constanța. Draft restrictions were similar during the same period last year, with some sections also falling below 2 metres. Based on rough estimates, barges are currently losing around 30–60% of their loading capacity, depending on their design,” said Pavel Lysenko, Freight Analyst at ASAP Agri.
Official data confirm a further deterioration in navigation conditions. The Cernavodă gauge fell by another 4 cm d/d on 22 July, with the water level forecast to decline by a further 5 cm over the following days, according to Romania’s Lower Danube River Administration. The Danube’s flow at Romania’s entry point also dropped to 1,700 cubic metres per second over the weekend, compared with the July average of 4,700 cubic metres per second, according to Romania’s state water-management agency. Water levels in Romania are currently at their lowest since 1996.