Transportation costs have increased in 98% of surveyed companies

The blocking of the Polish-Ukrainian border has led to losses for Ukrainian businesses and a significant increase in transportation costs. This is according to the results of a survey conducted in February-March 2024, according to the European Business Association (EBA).

According to 36 EBA member companies, the total cumulative amount of losses since the beginning of the strikes on the Polish-Ukrainian border amounted to at least €24.8 million, which is almost €700 thousand per company.

Overall, 67% of the EBA member companies’ top managers surveyed reported that their businesses have been affected by the strikes at Polish-Ukrainian border crossing points.

The blockade has significantly affected the cost of logistics – 98% of the surveyed companies have increased transportation costs. At the same time:

  • 23% report price increases of up to 50%,
  • 32% – by 50-75%,
  • 25% – by 75-100%,
  • 16% – by more than 100%.

At the same time, more than half of the companies that took part in the survey lost orders due to the border blockade. On average, they experienced a 25% drop in orders. In addition, the blockade has had a negative impact on half of the respondents’ plans to expand or develop their business.

Strikes at the border affect both exporters and importers. Among the companies that took part in the survey, 66% are engaged in export activities and 91% in import operations.

«In addition to direct financial losses, companies report the negative impact of strikes on current and future contracts, damage to business reputation, threats to food supply, supply chain disruption, price increases and reduced competitiveness, increased warehouse costs and overloading of warehouses, threats of production stoppages and even closure of enterprises,» the association said in a statement.

The border with Poland can be relieved by container transportation along the Danube from the ports of Izmail and Reni, as well as by the Black Sea from the ports of Greater Odesa, said Oleksandr Kubrakov, Deputy Prime Minister for Recovery and Minister of Community Development, Territories and Infrastructure. He also said that work is underway to provide more alternatives for carriers, including the opening of additional checkpoints.

As GMK Center reported earlier, the blockade of the Polish border, which began last November and continues today, has hit the Ukrainian economy hard. According to the NBU, in November 2023 alone, Ukraine lost $160 million in exports and $700 million in imports. The losses of Ukrainian metallurgical and metal trading companies account for a small percentage of the total loss, but pose a threat to their export operations.