The Ukrainian Danube Shipping Company (UDP) is transitioning to a 6-hour working day due to the ongoing crisis in the Danube river transport market. This decision was announced by the company's General Director, Dmytro Moskalenko.
"Due to the worsening situation in the Danube river transport market, UDP is moving to a 6-hour working day. We are forced to cut expenses," emphasized the head of the shipping company.
The main reasons for this move include:
- Lack of Support for Danube Export Route: Danube ports are competitive with Odessa ports for Ukrainian agricultural products, but a discount on railway transport to Izmail is needed.
- Extreme Heat and Low Water Levels: Shallow waters on the Middle Danube complicate barge convoy movements. Some clients paused operations in August to avoid risks. The permissible draft of barges is reduced, but cargo owners are not prepared to accept higher freight rates.
- Agricultural Losses Due to Heat: Farmers have lost part of their harvest due to the heat, reducing the volume of agricultural products exported via the Danube.
Moskalenko noted that, while competitors also face difficulties, they manage to survive even in a low market by working independently, often avoiding taxes, and with minimal staffing. In contrast, as a state enterprise, UDP operates under different conditions, paying salaries officially, maintaining a large staff, and fulfilling significant social obligations.
He emphasized that under current conditions, the fleet cannot support over a thousand employees. UDP has conducted digital management reforms and can operate with a significantly smaller workforce.
"Even in a high market, optimizing the staff was unavoidable. Everyone understands that. However, we started cutting costs not from the personnel but by halting all investment projects except for modernization. Modernization funding is targeted. This year, the Cabinet of Ministers reduced the share of dividends UDP was required to pay to the budget. The condition is that the remaining funds are directed towards modernization and fleet construction," Moskalenko noted.
The head of UDP added that this week the company will form a working group with the primary trade union organization and start seeking a compromise on reducing personnel costs, which currently account for 70% of the company's overhead expenses.
"With the union's agreement, the company has temporarily switched to a 6-hour working day. The number of people in the commercial service has been significantly reduced. We are discussing further measures, including 'unpopular' ones," Moskalenko concluded.
