Interpipe lost $1.2 million in November due to the blockade on the Polish border

In particular, the increase in the transport arm has led to an increase in the cost of logistics

Ukrainian industrial company Interpipe, a producer of steel pipes and railway products, suffered total losses (direct and indirect) of $1.2 million in November this year due to the blockade of the Polish-Ukrainian border. This was reported by Oleksiy Yanovsky, the group’s director of procurement and logistics, at the request of Interfax-Ukraine.

According to him, amid the blockade of the Black Sea ports in 2023, the company’s main means of delivering products to customers are road and water transport. They account for a total of 79% of shipped products.

«At the same time, road transportation to European customers is very important for our company, because according to the results of nine months, their share accounted for 38% of all shipped products,» Yanovsky noted.

Previously, the company’s products were actively transported through the Yahodyn-Dorohusk, Krakovets-Korchova, and Rava-Ruska-Hrebenne checkpoints, but since November 6, 2023, they have been blocked due to a protest by Polish carriers.

«This led to the fact that Interpipe did not deliver already produced products to European customers, some orders were moved from November to December. These are our direct losses in November from the strike,» said the company’s top manager.

Yanovsky also reported indirect losses. In particular, the increase in transportation leverage has led to an increase in the cost of transporting products, as trucks were redirected to free crossings in Slovakia and Romania. In addition, the increased load on these checkpoints has led to queues and increased truck downtime.

The group’s Director of Procurement and Logistics noted that customers are also preparing to file claims and cancel existing contracts. In addition, Interpipe’s imports cannot cross the border due to the blockade. This has left the company without the necessary goods and European sellers without sales to Ukraine.

As GMK Center reported earlier, the blockade of western road crossings will cost the Ukrainian economy at least $1 billion, depending on the duration of the protest. It has already caused numerous negative consequences for Ukrainian businesses and their counterparties. The most notable of these are a 3-4-fold increase in logistics costs, delays in deliveries, contractual disruption, and more. The blocking of the border in November resulted in a 26.7% drop in Ukrainian exports by road compared to October and a 23.5% drop in imports. Overall, in November, the volume of Ukrainian exports across the Polish border decreased by 40%.