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Agricultural 

Marketing 

Service

Oct 2023

This is a summary of “Implications of Russian Invasion on the Logistical Competition for Corn Shipments 

from the United States and Ukraine” by William W. Wilson, David W. Bullock, Prithviraj Lakkakula, and 

Delmy L. Salin. This research and analysis received funding from USDA’s Agricultural Marketing Service 

(AMS) through cooperative agreement number 20-TMTSD-ND-0004. The opinions and conclusions 

expressed are the authors’ and do not necessarily reflect the views of USDA or the Agricultural Marketing 

Service. The full report is available online at https://www.ndsu.edu/agriculture/academics/academic-units/

agribusiness-and-applied-economics/research/research-reports.

WHAT IS THE ISSUE?

Logistics is a critical component determining competitiveness in international commodity markets. In the global corn 

market, the United States is a leading exporter but faces strong competition from Ukraine and Brazil. The Russian invasion 

of Ukraine on February 24, 2022, disrupted Black Sea and worldwide grain flows, especially for corn. The war‘s influence 

on logistical costs, shipping routes, and export-handling capacities at ports on the Black Sea have changed the relative 

competitiveness and market shares of major corn exporters in the global market. 

This study analyzes the logistical costs, competitiveness, and trade flows of corn exports from the United States, Ukraine, 

and their competitors to determine global market shares in the periods before and after the Russian invasion.

HOW WAS THE STUDY CONDUCTED?

The study uses an optimized Monte Carlo simulation model to derive optimal trade flows among origins and destinations 

under two alternative scenarios: 1) the pre-invasion period (2017 to 2021 calendar years), and 2) the post-invasion period 

(2022 calendar year). The study focuses on the minimization of logistical costs through the network for corn flows from 

the United States and Ukraine to the major importing countries and regions for a representative year from each scenario 

based upon Monte Carlo generated data. For the United States, the export routes are through the U.S. Gulf and Pacific 

Northwest (PNW). For Ukraine, the predominant export route in the pre-invasion period is through the Port of Odesa. In the 

REPORT SUMMARY

Implications of Russian Invasion on the Logistical 

Competition for Corn Shipments from the United States 

and Ukraine (Summary)

Delmy L. Salin
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post-invasion period, the export routes are the Ports of Odesa, Chornomorsk, and Yuzhny/Pivdennyi (by provisions of 

the Black Sea Grain Initiative); shipments routed through Constanta, Romania; and rail shipments through Ukraine’s 

western border. The model’s results show short-run trade flows resulting from a minimum cost specification, which 

were used to derive market shares and represent the logistical competitive advantage between specific origindestination pairs.

WHAT DID THE STUDY FIND?

The study’s findings indicate the international corn trade is extremely competitive, whereby one country’s loss is 

another country’s gain. As a result of the Russian invasion, Ukraine lost corn market share to most countries, which 

was gained by rival exporters. The U.S. Gulf would be the primary beneficiary of Ukraine’s lost market share to China 

and the European Union. The U.S. PNW would also gain export volume in China, although port capacity constraints 

and congestion prevented the PNW from gaining a higher share of the Chinese market. However, soon after the 

invasion, China relaxed its phytosanitary restrictions (SPS) on corn imports from Brazil. The effect of this change is 

important and shifts Chinese imports from the U.S. Gulf and PNW to Brazil.

During the pre-invasion period, the United States had a logistical cost advantage over Ukraine to serve China (from 

both the U.S. Gulf and PNW), South Korea (from the U.S. Gulf) and Japan (from the PNW). Ukraine had logistical 

advantages for shipments to the European Union and was highly competitive in Indonesia and China.

During the post-invasion period, Ukraine’s shipping costs sharply increased while its export capacity declined. 

Ukraine’s total logistic costs from farm to port via Odesa increased from $31/metric ton (mt) in the pre-invasion period 

to $97/mt in the post-invasion period. Shipments to Constanta were $115/mt and were $130/mt to the western 

border. For comparison, competing U.S. origins during the same period were about $57/mt to the PNW and 

$47/mt to the U.S. Gulf. Monthly export capacity via Odesa decreased from 7 million metric tons (mmt) to 3 mmt. 

While alternative routes allowed for additional export capacity of 3 mmt via Constanta and 1.5 mmt via the western 

border by rail, these alternative routes were at a higher cost than Odesa. As a result, Ukraine lost market share in 

every importing region due to the combined impacts of reduced exportable commodities, supply chain capacity 

constraints, and higher domestic and international logistical costs. However, the loss of market share did not accrue to 

the United States, despite the U.S. Gulf and PNW having a cost advantage for corn shipments to China. The observed 

shipments indicated Ukraine was the dominant supplier to China over the majority of years in the base period up until 

2020 when the United States became more dominant.

Several uncertainties emerge from the Russian invasion that could have long-lasting effects on the global corn 

trade. These are 1) whether Ukraine’s Port of Odesa re-opens, 2) whether the Port of Odesa reverts to its previous 

capacity and costs, 3) changes in the relative cost of alternative routes for Ukrainian grain, 4) if shipping rates through 

alternative routes remain elevated (which has the impact of weakening the basis in Ukraine and impacting production 

decisions)1, and 5) changes in capacity limits for shipments through these routes and ports. In the short run, these 

uncertainties were mitigated by the Black Sea Grain Initiative, which helped facilitate world trade and stabilize price 

volatility.

Finally, because global market shares are sensitive to changes in logistics and transportation costs, exporting countries 

will continue to make investments to lower their supply chain costs. In regions where exports are increasing, there 

is a greater frequency for the supply-capacity to be restricted. As a result, there is significant pressure on countries 

and firms to expand export capacity. Indeed, expansion initiatives are underway in the U.S. Gulf, Ukraine, and Brazil. 

However, long-run competitiveness and market shares depend not only on lowering supply chain costs within a 

country, but on those costs relative to other exporting countries. While this study has contributed to understanding 

shifts in logistics costs, global competitiveness, and market shares as a result of the Russian invasion, these can only be 

interpreted as short-run findings. Over the long-run, the effects of the invasion are subject to uncertainties, yet to be 

determined.

1 Logistic cost increases reduced the price paid to Ukrainian farmers by $127/mt, resulting in net prices being marginally less than 

production costs.
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PREFERRED CITATION

Salin, Delmy L. October 2023. Implications of the Russian Invasion on the Logistical Competition for Corn Shipments 

from the United States and Ukraine (Summary). U.S. Department of Agriculture, Agricultural Marketing Service. 

Web. <http://dx.doi.org/10.9752/TS400.10-2023>

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