Traffic has been growing fast along the Danube in 2023, and collisions, sinkings and groundings have also become increasingly frequent. The resulting claims have been complicated by owner unfamiliarity with regional conditions and cultures and a local code of silence following “hit-and-run” incidents.
Even before Russia quit the UN-brokered deal allowing Kyiv to ship its grain via the Black Sea, traffic passing through Ukraine’s Danube ports was accounting for around a quarter of the nation’s grain exports.
Ukraine transhipped 8.1 million tonnes of grain through the port of Constanta in the first seven months of 2023 – more than 40% of all grains handled by a port, which already deals with exports from Romania itself, Hungary and Serbia. In May alone, grain volumes through Danube ports hit 2.2 million tonnes, overtaking exports made via the Black Sea corridor.
With the Danube route now the principal exit option for Ukrainian grain, Russian firepower will doubtless have a say in the handling capabilities of the Ukrainian ports of Reni and Izmail, which is close to the Romanian border. However, recent government projections still foresee Danube exports reaching at least 20 million tonnes in 2023 – three times pre-war volumes.
The routing switch and the consequent redeployment by north European owners of inland and coastal vessels to handle the new trade have created new challenges for operational safety along the Danube.
Congestion challenges
Where risk is concerned, the conflict itself dominates day-to-day reporting but the course of events has also caused major vessel congestion. The vessels coming into the market are maintained to the highest standards, but their crews may have little or no experience working on these waters.
In one example, a vessel in convoy came out of the bend in heavy weather on the wrong side of the river, causing a collision.
With port infrastructure under strain, there can also be disconnects between international operators and local authorities, especially when incidents or accidents occur. A part of that is about lack of previous contact and a difference in cultures when it comes to getting things done, but there have also been incidents where vessels have been hit, yet nobody seems to have seen anything.
In one instance, NorthStandard set up a meeting between one of its members and the Maritime Anti-Corruption Network to take forward an investigation into a hit-and-run incident that led a moored barge to sink. Inquiries reached a dead end.
Nevertheless, NorthStandard has been invited to intervene in incidents on several occasions this year, including to support refloating operations.
We have used our experience to coordinate and project manage, with our local correspondents helping to resolve issues where the infrastructure hasn’t been in place, whether that’s been through organising crane lifts or refloats using balloons.
C&I considerations
We are not the only ones going through this. I cannot speak for others, although it’s possible insurers may become more risk averse in the Danube, with inevitable knock-on effect for charterers, and ultimately receivers.
However, despite the greater frequency of Danube claims, coastal and inland premiums are defined by NorthStandard’s overall mutual combined ratio performance, which at the last annual renewal stood at a healthy 95%.
Clearly, there are risks of war, and crew cover needs to reflect the exposure faced but this is a market that takes its lead from the volume of business we do to support operations all along Europe’s coastline and inland waterways, as well as niche areas for growth identified elsewhere in the world.
In the immediate term, where trade needs to be supported on heavily congested routes, members are operating in unfamiliar waters, different shipping cultures apply and crews feel understandable edginess, there are plenty of opportunities to showcase P&I services at their best.
This article was written by Nick Taylor, Head of Coastal & Inland, NorthStandard. Taylor is based in London.
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