Ukraine is one of the leading players in the global grain market. However, maintaining the quality of produce and its efficient delivery to end consumers remains a critically important challenge.
Poorly organised storage or logistics can lead to significant losses and financial damage. In this article, we will explore modern approaches to grain storage, logistical innovations, and strategies that not only reduce losses but also take grain export to a new level of efficiency.
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Ukraine’s role in the global grain market
Ukraine has firmly established itself as one of the key players in the global grain market. Being among the top ten producers worldwide, the country has long been recognised not only as an agrarian nation but also as a powerful grain exporter.
According to the US Department of Agriculture (USDA), in the 2016/17 marketing season, Ukraine retained its leadership in sunflower seed production, accounting for 31% of global output, and also remained the leading exporter of sunflower oil, with a 56% market share.
Moreover, Ukraine consistently ranks in the global top five exporters of maize, barley, rye, sorghum, oats, and wheat. This multifaceted market presence enables domestic agrarians to set new export records each year. In particular, over 35 million tonnes of grain were sold last season, with forecasts for the new season exceeding 36 million tonnes.
Revenue from grain exports is among the largest contributors to Ukraine’s foreign trade structure. Over the past ten years, export volumes have grown nearly 2.5 times. Looking ahead to 2030, the country has every chance of surpassing 50 million tonnes of annual grain exports.
However, to maintain and strengthen these positions, it is necessary to systematically develop internal logistics infrastructure — this is the key to minimising losses and increasing export efficiency.
Major challenges in Ukrainian grain export
Despite significant production and export volumes, Ukraine’s grain sector faces serious logistical challenges. One of the main problems is the high costs and prolonged timelines of internal transhipment and transport.
Due to outdated or inefficient routes, transporting grain from elevators to Black Sea ports costs Ukrainian agrarians about USD 20 per tonne more than in European countries. Specifically, these costs are 40% higher than in France and Germany and 30% higher than in the US.
As a result, Ukrainian producers lose up to USD 600 million annually due solely to excessive logistics costs. This issue is exacerbated by the overall low efficiency of the country’s logistics system. According to the World Bank Logistics Performance Index (LPI) for 2016, Ukraine ranks only 80th globally, one-third below the ratings of leaders like Germany.
Previously, high global grain prices allowed traders to offset additional costs. However, over the past decade, prices have halved, making logistics a critical factor in profitability. In such conditions, further growth in grain exports directly depends on the modernisation of internal infrastructure and the implementation of more effective logistics solutions.
Harvesting and choosing transport for grain delivery
The grain logistics chain begins with the correct timing of the harvest. Every hour during the harvest season matters, as operational efficiency directly affects grain quality and its market value. The optimal harvest moment is when moisture and ripeness are at their peak, allowing for loss minimisation and the best economic performance.
The next crucial step is choosing transport for moving grain from the field. It is vital to consider the volume and weight of the crop to avoid delays, overloading, or excessive costs.
Experts recommend using grain carts — specialised machinery that enables fast and continuous loading of grain from combines into trucks or grain hauliers. This not only reduces fuel and time costs but also increases the overall efficiency of the logistics process at its initial stage.
What influences efficient grain transport?
Efficient grain transport is a complex system that encompasses route planning, compliance with logistics standards, and operational management of transport. This is particularly important when dealing with large volumes, where even minor disruptions can lead to delays, losses, or unnecessary expenses.
Key factors in efficient grain transport include:
- A well-chosen route, considering distance and road conditions;
- Timely delivery and loading of transport without delays;
- GPS tracking and cargo monitoring technologies;
- Selecting the appropriate type of transport for each batch;
- Automated documentation and invoice control;
- Maintaining proper temperature and transport conditions.
A systematic approach to transport organisation allows agricultural producers to reduce logistics costs, avoid downtime, and minimise product spoilage risks. At the same time, the introduction of digital solutions and real-time analytics significantly improves process manageability, especially during peak supply periods.
Storage, processing and transhipment of grain
Once grain is delivered to a storage facility or platform, the next, equally important stage begins — the organisation of proper storage. At this point, it is determined whether the product will retain its quality until it is sold or exported. Choosing the right storage, controlling temperature and humidity, and ensuring effective ventilation are the main conditions influencing storage duration and safety.
Each type of grain has its own specific storage requirements. Excessive humidity can lead to mould development, while inappropriate temperature conditions can result in the loss of nutritional value or pest infestation. Therefore, creating a stable microclimate in the grain storage facility is a critically important factor.
One of the most effective modern storage methods is the use of artificial ventilation systems. These systems distribute air evenly throughout the grain mass, preventing the formation of hot spots and reducing moisture. This approach not only extends the safe storage period but also significantly reduces the risk of quality degradation.
In addition to storage, transhipment — the transfer of grain between different stages of the logistics chain — must not be overlooked. It is essential to maintain equipment cleanliness, avoid mechanical damage to grain, and adhere to all standards to prevent losses during loading and unloading.
Optimising grain logistics
In the digital age, agricultural logistics is undergoing a dramatic transformation. Today, farmers and agribusinesses have access to innovative solutions that significantly enhance the efficiency of grain transport, storage, and management processes.
Modern technologies that contribute to logistics optimisation include:
- Temperature and humidity monitoring sensors in storage facilities;
- Software for recording grain volumes and quality;
- Artificial intelligence systems for forecasting market demand;
- GPS navigation to optimise delivery routes;
- Cloud platforms for centralised supply chain management;
- Integration with digital trading and export systems.
The use of specialised grain accounting software at enterprises allows for centralised inventory management, accurate tracking of volumes and quality, and optimisation of transport routes. This not only reduces time and resource consumption but also ensures transparency and control at all stages of the logistics chain.
Integrating modern solutions into grain logistics is the key to high product quality, reduced losses, and strengthened competitiveness in the agricultural market.
Grain Export Logistics in Ukraine
Logistics is a critically important component of Ukraine’s entire agricultural export potential. The successful export of millions of tonnes of grain abroad depends not only on yield but also on the efficiency of each stage.
It is logistics solutions that determine the speed, cost, and competitiveness of Ukrainian grain on the global market. This section examines how Ukraine’s grain export logistics operates, what challenges farmers and traders face, and what tools can optimise this process.
Maritime Grain Terminals
Most Ukrainian grain is exported by sea, making port infrastructure a crucial link in the entire logistics system. Maritime grain terminals play a key role in ensuring stable and efficient deliveries to foreign markets. As of today, there are 33 grain terminals operating in Ukraine, with a combined capacity to tranship up to 50 million tonnes of grain annually.
In the 2015/16 marketing season, over 39 million tonnes of grain and processed products were exported through Ukrainian sea ports. This indicates that more than two-thirds of available terminal capacity was fully utilised. As such, portside grain elevators in Ukraine are capable of effectively fulfilling international trade contracts and ensuring continuity of supply.
However, the logistics chain is not without problems. The most pressing remains the overload of the transport infrastructure, especially railways. Due to increased transport volumes and heightened activity among grain trading companies, difficulties arise in wagon availability, particularly for small shipment batches. This creates risks of delays and additional costs for exporters.
As a result, further development of maritime grain logistics requires investment in railway modernisation, expansion of port facilities, and implementation of alternative transport solutions.
Railway grain logistics
Rail transport plays a pivotal role in Ukraine’s grain export logistics chain — it accounts for around 60% of all domestic grain transport. However, the condition of the railway infrastructure and wagon fleet requires urgent attention. Due to a lack of investment, rolling stock deterioration, and seasonal wagon delays, railway logistics is facing numerous challenges.
A significant portion of grain wagons has already exceeded their operational lifespan: one-third of wagons have been in service for over 30 years, and another 62% have been operating for 21 to 30 years. The majority of this fleet (79%) is owned by Ukrzaliznytsia, while only a small share belongs to private carriers, who face unequal market conditions.
The state tariff policy mandates payment for railway infrastructure use even during empty hauls, which significantly raises the cost of transport for private operators — on average, USD 3–7 more per tonne compared to the state-owned fleet.
The situation is further complicated by seasonal restrictions. For instance, in August, grain shipments to the port of Chornomorsk were temporarily suspended, disrupting export schedules. Such restrictions were previously rare but have become more frequent due to increasing transport volumes and a lack of reserve capacity.
Solving railway logistics issues requires the establishment of transparent rules and equal tariff conditions for all carriers. This would stimulate private investment in new grain wagon fleets and increase competition, ultimately contributing to more efficient grain transport in Ukraine.
River transport of grain
River transport in Ukraine has significant economic potential but is currently underutilised. Only about 3% of grain transport relies on inland waterways, despite this being one of the cheapest options due to minimal operational costs. For comparison: in 1990, 66 million tonnes of goods were transported via the Dnipro River; by 2014, this had fallen to just 5 million tonnes.
The Dnipro, as Ukraine’s main waterway, has considerable capacity for transporting grain from production regions to Black Sea ports. The potential annual volume for this route is estimated at 4.5 million tonnes, and given increasing production, this figure could reach 7 million tonnes.
However, unlocking this potential requires substantial infrastructure investment. This includes building a modern river cargo fleet, deepening the riverbed at strategic points to accommodate large-tonnage vessels, and extending the navigation season — particularly during the winter months (November–March).
Equally important are modernising locks, optimising bridge operations, and simplifying procedures for foreign vessels accessing Ukraine’s inland waters, particularly through reducing navigation service fees.
The development of river logistics could become one of the most effective ways to ease pressure on the railway infrastructure and significantly reduce grain transport costs.
Road transport of grain
In recent years, Ukraine has seen a notable increase in the use of road transport for grain delivery, particularly to portside elevators. Today, road transport accounts for approximately 36% of grain logistics and this share continues to grow.
This trend is driven less by infrastructure development or transport efficiency and more by the widespread practice of overloading grain trucks to lower delivery costs.
Nevertheless, road transport remains a vital link in the logistics chain, especially during peak railway congestion. It provides flexible routing and timely delivery, particularly in regions with limited access to other transport modes.
However, excessive use of heavy-duty vehicles leads to accelerated road surface degradation and increased carbon emissions. To address this, the state has begun implementing a weight control system and investing in road modernisation.
These measures aim not only to reduce infrastructure strain but also to encourage the redistribution of freight flows to more environmentally and economically efficient rail and river routes.
Conclusion
Grain logistics is more than just the movement of products from field to port. It is a strategic system that defines the overall efficiency of the agricultural sector. Every stage — from transport selection to storage conditions — plays a crucial role in preserving grain quality, minimising costs, and ensuring stable exports.
However, to fully realise the potential of Ukraine’s grain logistics, comprehensive infrastructure modernisation is essential. This includes investments in transport networks, renewal of wagon and vessel fleets, development of port and river terminals, and the adoption of modern digital solutions. The government also plays a vital role by establishing transparent regulations, supporting investors, and fostering innovation.
Improving logistics solutions will not only increase the global competitiveness of Ukrainian agrarians but also contribute to job creation, higher budget revenues, and overall growth of the agricultural economy. Therefore, reforms in the logistics sector must be comprehensive, open to private initiatives, and focused on long-term sustainability.
