Insurance risk for shipping has expanded to the entire Black Sea area

The risks for Ukrainian agricultural exports are no longer limited to individual ports of Great Odesa – the entire Black Sea route is under threat.

This was stated by Orexim Trading co-owner Artem Malinovskyi, according to the company’s press release.

According to him, the insurance market has already expanded the zone of increased military risk to the entire Black Sea, and attacks on civilian ships and port infrastructure have forced traders to review not only specific ports of call, but the entire logistics chain.

Malinovsky noted that previously the main risk factor was the operation of a specific port – the availability of the terminal, the possibility of mooring and the window for the vessel to enter and leave.

Now, according to him, the entire Black Sea section of the route is under question. Against this background, insurance is becoming more expensive, shipowners are reviewing the conditions of entry into the region, and some tonnage is avoiding the Black Sea altogether.

Back in September, the company reoriented part of its work to the Danube, but this direction is not without risks either.

According to Malinovsky, ships are currently trying to avoid the increased insurance premium by moving along the coasts of Romania and Bulgaria within the 12-mile zone of their territorial waters.

However, recent attacks on ships in the economic zones of these countries may change the approach of underwriters to such routes as well.

Malinovsky noted that while movement in the 12-mile zone allows keeping the insurance premium within acceptable limits, if the conditions are revised, the bypass along the coast may lose its economic advantage over the direct route.

According to him, this will mean a further increase in freight and insurance costs and additional pressure on Ukrainian agricultural exports.

USM previously reported that the Black Sea has become the most dangerous region for civilian shipping.