How Much Ukrainian and Polish Businesses Losing amid Border Blockade

Tuesday, 14 November 2023

The Ukrainian-Polish border has been effectively blocked for over a week now.

Polish hauliers – specifically the recently formed "Committee to Protect Transporters and Transport Employers", which is linked to the anti-Ukrainian Confederation party – are obstructing the operation of three key border crossing points with Ukraine.

Read more about the cost of this blockade for the Ukrainian economy and the sectors that will be most affected in the column by Senior Research Fellow at the Institute for Economic Research and Policy Consulting, Iryna Kosse – Price of Blockade: Consequences of Protest on Ukrainian-Polish Border.

She points out that currently, the crossing points Yahodyn-Dorohusk and Rava-Ruska-Hrebenne border crossing points are closed in both directions, while Krakovets-Korczowa is only closed for entry to Ukraine.

The blockade, which began at noon on 6 November, has left approximately 20,000 vehicles stranded at the border, unable to reach their destinations (according to data from the Ukrainian Ministry of Infrastructure).

Ukrainian officials have attempted direct negotiations with the border blockers, but to no avail.

Since the protesters' demands are unacceptable to Ukraine, the chances of reaching a compromise are clearly limited.

According to Oleksandr Kyryluk, director of the International Freight Department at the logistics group Zammler, each day of downtime for a truck costs Ukrainian hauliers 300-350 euros in operating expenses.

Thus, Iryna Kosse calculates that Ukrainian hauliers lose 164,000 euros per day due to downtime.

"This is just the tip of the iceberg, as Ukrainian losses are not limited to the hauliers' losses only. The overall amount lost will be much larger, encompassing risks for businesses, exporters and importers. Non-compliance with contracts and production shutdowns will be an inevitable outcome of this scenario," she emphasises.

She notes that the biggest losers of this blockade are exporters, but not agricultural exporters.

"Interpipe, for instance, uses over a thousand vehicles per month to export its metal products, mainly by road. Similarly, manufacturers of glass containers export them to European plants by truck. Other goods transported by road include timber, furniture, food, pharmaceuticals and more," writes Iryna Kosse.

According to the author, importers, especially of fuel, plastic products and food, are also being adversely affected.

This implies that Polish businesses are also incurring losses from this blockade.

"In this situation, a swift removal of the blockade is in the interests of both Kyiv and Warsaw. The governments of both countries need to respond urgently, seeking ways to resolve the conflict and restore normal border traffic before the economic consequences get any worse," she urges.

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