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Protests by Polish Carriers at Ukraine Border Continue, Disrupting Trade

POLITICSProtests by Polish Carriers at Ukraine Border Continue, Disrupting Trade

The protest by Polish carriers at the border with Ukraine has been ongoing without interruption since November 6th, last year. Four critical road crossings are blocked, and border traffic is proceeding at a snail’s pace. Thus, trade exchange between the EU and Ukraine has been significantly disrupted, and manufacturing and commercial enterprises operating on both sides of the border are incurring considerable losses. Maciej Wroński, President of the Transport and Logistics Poland Employers’ Association, points out that the government has not yet presented the carriers with specific ideas to solve their problems and end the protest, hiding behind EU regulations. However, the administration does have tools that could support companies in this difficult situation.

“We are already in the new year, 2024, and meanwhile, the protests that started last year are still ongoing and there seems to be no end in sight. In addition, the protesting carriers have been joined by farmers, and we have quite a serious economic problem, as Polish companies export goods to Ukraine worth about 10 billion euros annually. We also have a political problem, as this situation negatively affects Polish-Ukrainian relations, as well as Polish-EU relations. We have a real social problem that was the cause of these protests, i.e., the still unresolved situation of these entrepreneurs who have lost their only means of livelihood, which was transporting goods to Ukraine.” says Maciej Wroński to Newseria Biznes agency.

In connection with the difficult situation caused by the war in Ukraine, the EU has allowed local carriers to operate on the common EU market (mainly for the delivery of humanitarian aid). According to the EU–Ukraine agreement, their license is to be valid until June 2024. The problem, however, is that Ukrainian carriers operate on the EU market with a significant competitive advantage – their costs are several times lower, which makes them cheaper, and they are not subject to community regulations. This has led to a crisis: carriers in Poland and several other EU countries have started losing their livelihood and are on the verge of bankruptcy. Hence, they began protesting in early November last year, demanding, among other things, a revision of the existing regulations and the restoration of commercial transport permits for Ukrainian carriers, which were abolished by the agreement between the EU and Ukraine (excluding humanitarian and military transports).

“Carriers who specialized in transport to Ukraine have lost their only source of livelihood,” emphasizes the President of the Transport and Logistics Poland Employers’ Association.

At the border with Poland, thousands of trucks continue to line up in queues spanning several dozen kilometers. The four main road crossings in Dorohusk, Hrebenne, Korczowa, and Medyka are blocked, and traffic across the border is moving at a snail’s pace. As a result, trade between the Union and Ukraine has been significantly disrupted, and manufacturing and commercial enterprises operating on both sides of the border are incurring substantial losses. In addition to Poland, carriers from Slovakia and Hungary have joined the border protests for the same reasons. However, the situation there has been resolved and movement has been unblocked.

“The full long-term blockade is only being maintained in Poland at the moment. The situation is escalating due to the fact that farmers have also joined the striking carriers, who also feel threatened by competition from Ukrainian goods,” says Maciej Wroński.

At the beginning of this year, after the Christmas and New Year’s break, farmers from the Podkarpacie region’s Oszukana Wieś association also returned to block the border at Medyka. After talks with the new Minister of Agriculture, Czesław Siekierski, who assured that farmers’ demands would be met, they withdrew from the blockade for over a week. However, a formal agreement has still not been signed, so the farmers have returned to protest.

The President of the Transport and Logistics Poland Employers’ Association states that the problem concerns a maximum of about 1,000 Polish carriers who specialized in transport to the East and have now lost their main source of income. As he assesses, the country can afford to offer them at least financial assistance.

“Untying this Gordian knot will certainly be difficult, but that does not mean that it cannot be untied. Since the beginning of Russia’s attack on Ukraine, we have been saying that when Polish entrepreneurs providing services in those markets start incurring losses, there should be mechanisms to compensate them. Helping these companies, some compensation would be a matter of a few to several dozen million zlotys per year. If we compare this with the value of Polish exports to Ukraine, worth about 10 billion euros per year, these are really small sums. Let’s find proportions,” appeals Maciej Wroński. “Nothing has been done since 2022. These people have been left to fend for themselves, and they have financial obligations, after all, they have to repay loans, leasing installments, and no one will exempt them from it, and they are not in a position to take up transport to the west or other directions at the moment. Once, because there is also no work in the west at the moment, there is a crisis secondly, they were specialized in the eastern direction. It is as if we were urging an ENT doctor that if there is no work, he should now deal with treating teeth.”

As he assesses, without decisive actions, the conflict and protests will escalate. Even if it is possible to quench them for a while, the persisting social and economic tensions will return after a few months with double the intensity.

“Long-term consequences may also include problems for Polish exporters because if they are not able to deliver contracted goods, unfortunately, the market does not tolerate a vacuum, so their recipients will find other sources, other transport routes. It can also have a negative impact on non-transport companies. Long-term consequences may also be that some carriers will go bankrupt, will never recover their position, their companies, and their families will lose their only source of livelihood on which they have based their existence so far,” says the expert.

As he points out, the whole situation may also lead to a decrease in trust in the new ruling coalition. So far, it has not presented the carriers with specific ideas to solve this problem and refers to EU regulations, indicating that the key to solving the problem lies in Brussels.

“The protests started two months ago, and during this time, nothing has been done, for example in the field of enforcing the law and preventing violations of the rules of performing road transport by Ukrainian companies. Nothing has been done in terms of the demanded control of senders commissioning these transport operations to Ukrainian companies, which they should not perform according to the law. I do not see any will to solve these problems apart from saying that they are being done. Considering the very low probability that the European Union will back down from these solutions related to trade exchange with Ukraine, all this will end up with empty talk. And it’s a shame because there are solutions that can be implemented, which would alleviate social tensions and cause the carriers to leave the border,” assesses Maciej Wroński.

As the association reports, in 2021, Polish carriers performed 100,000 road transports on the Ukrainian route compared to 160,000 carried out by the Ukrainian side (in accordance with the bilateral agreement on international road transport concluded between Poland and Ukraine). However, recently, the number of Polish transports has decreased several times, while carriers from Ukraine have increased the number of transports by at least 500%. Clients have taken advantage of the emergence of significantly cheaper Ukrainian carriers to resign from more expensive EU services, including Polish ones.

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