Shipping companies will jointly address the EU authorities over the Danube crisis

Danube shipping companies will jointly appeal to the European Union authorities over the freight crisis.

Last week, heads of shipping companies gathered in Romania for the 66th Conference of Directors of Danube Shipping Companies, reported the UDS.

Among the participants of the event are Romanian TTS and NAVROM, Bulgarian BRP, Serbian JRB AD, Austrian DDSG-MAHART and others.

The most important issue is overcoming the crisis. Due to the drop in volumes and freight rates, the largest market participants are operating at a loss. Financial reserves for 2023/2022 have been exhausted. Colleagues believe that the situation on the Danube is worse than during the global financial crisis of 2008, the UDS noted.

First, the Danube industrial cluster is gradually degrading. High energy prices, increased environmental requirements and low demand are killing metallurgy. ISD Dunaferr has closed in Hungary, Liberty Galati is in a difficult state in Romania, Voestalpine in Linz, Austria is shutting down one of its blast furnaces, US Steel in Kosice, Slovakia, is using only part of its production capacity.

Secondly, the position of the base port of Constanta for Ukraine. In 2022-2023, alternative logistics chains appeared — instead of the river fleet to Constanta, clients use the railway to other EU seaports. Currently, 95% of containers are transported by rail. Instead of returning volumes, Constanta is increasing tariffs by 20% from next year.

Other shipping companies are overcoming the crisis by different methods:

1. Investment projects are beginning to be frozen. Romanian colleagues planned the construction of 10 new barges (over 2 million euros each). Currently, two units have been financed, the project has been suspended. Slovaks have invested in the reconstruction of barges and are also stopping the project.

2. They plan to reduce current expenses, equipment. Companies such as UDS have no more than 50-60 employees in their central offices. Some recruit migrants from Asian countries to reduce the salary fund of the crews.

The UDS emphasized the need to support Danube river logistics at the level of the European Union. Compared to road transport, river transport is an order of magnitude more environmentally friendly. The network of European highways is also not destroyed.

The EU should stimulate transportation by river transport. However, today at the European level, for some reason, the Danube issue is not considered at all.

As a result of the conference, the parties agreed to unite and jointly develop proposals for the authorities of the European Union.

Previously, USM reported that the modernization of the UDS vessel will reduce operating costs by 500,000 euros.