Home / Markets / Markets Analysis / Corn market / Shipping companies issue first warnings in Ukraine

Shipping companies issue first warnings in Ukraine

03/03/2014 @ 9:53am

Leading maritime insurer Skuld asked shipowners Monday to keep crews aboard ship during calls to some Ukraine ports as Russian security forces tighten their grip in the region.

In an urgent note to its members, Skuld warned owners to "have crews remain on vessels" on all calls to the port of Kherson and advised caution for the ports of Theodosia and Kerch. It said that crews should remain within port limits under all circumstances.

Theodosia and Kerch are located in Crimea in southern Ukraine, now under the control of the Russian military. Kherson sits just north of Crimea.

Norway-based Skuld is one of the 13 principal underwriters of the International Group of P&I Clubs, which insures around 90% of all vessels world-wide.

"Members need to consider keeping a continuous watch on developments, not least if their planned operations would see the vessel call to and from the Crimea as part of a call at a number of ports of loading or discharging," Skuld said.

Skuld's note is the first warning to owners about possible disruptions due to the developing crisis, although it said operations at the main port of Odessa and others, including Ilyichevsk, Yuzhny, Mariupol and Berdvansk, haven't been affected by the crisis so far.

Ukraine is a key supplier of wheat and corn, and it exports metals and minerals to Europe, Russia and beyond. Ukrainian farms rank as the world's fourth- and fifth-largest exporters of corn and wheat, respectively. Much of that feeds African and Mideast markets. Its mills make it the world's fifth-largest steel exporter.

Ukraine also serves as a critical gateway for Russian natural gas to Western Europe. About a fifth of Europe's annual gas needs flow across the country. Together with Russia, Ukraine forms the northern coast of the Black Sea, an important shipping route for energy, agricultural products and metals. The unrest in the Crimean peninsula--which juts into the Black Sea and is home to Russia's Black Sea Fleet, the most important naval power in the region--threatens those shipping lanes.

Shipping companies, including the world's biggest in terms of capacity, have contingency plans in place to move ships to different ports or evacuate crews if the situation deteriorates.

"We are working on plans as we speak, looking at alternate ports and evacuation plans," a senior official with a European dry-bulk company said. "But we are not there yet. It's just a precaution."

P&I members said the area hasn't been declared a conflict zone, something that could lead to a sharp rise in insurance premiums.

Write to Costas Paris at costas.paris@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


(END) Dow Jones Newswires


March 03, 2014 09:07 ET (14:07 GMT)

DJ Ship Insurer Skuld Warns Vessels in Ukraine->copyright

CancelPost Comment
MORE FROM DOW JONES NEWSWIRES more +

More Pig Losses Seen, Smithfield Says By: 05/14/2014 @ 7:55am The swine industry is struggling to contain a deadly virus that's sweeping U.S. hog farms…

Senators Turn Up Heat on Railroad Companies By: 05/13/2014 @ 11:39am Four Midwestern U.S. senators add their voices to a growing chorus of farmers, ethanol producers…

Summary of Friday's WASDE Report By: 05/09/2014 @ 2:53pm The following table is provided as a service to Wall Street Journal subscribers in conjunction…

MEDIA CENTERmore +
This container should display a .swf file. If not, you may need to upgrade your Flash player.
Markets Finish Mixed