The Rise and Fall of Odessa's Merchant Fleet

Abstract

For almost two centuries, the Black Sea port of Odessa was an important center of merchant seafaring. Straddling the periods of the Russian Empire and the USSR, this part of Southern Ukraine was intricately linked to its merchant fleet as the hub of grain shipments, cruise industries, as well as an extension of the Russo-Soviet political power.

By the 1980s, one of the largest merchant fleets in the world, the so-called Black Sea Shipping Company (BSC) reached its zenith. BSC directly employed tens and indirectly hundreds of thousands of employees. The port city was home to several naval academic intuitions graduating thousands of students. Hundreds of vessels supported Soviet military needs, grain and oil shipping, and even a cruise shipping industry from France to Singapore.

Yet, within a few years of the breakdown of the Soviet Union, the BSC ceased to exist as a going concern. The enormous ships were sold, forfeited as collateral for loans, or scrapped for metal due to lack of maintenance. Tens of thousands of sailors began working for foreign firms or lost their jobs. The assets that just a few years ago were estimated to be worth billions of dollars vanished.

This thesis attempts to narrate the disappearance of the BSC and explain the causes for the sudden downfall. This narrative could be viewed as a case study for a large number of industrial cataclysms in the post-Soviet space. The thesis can also be used to better understand the de-industrialization of modern Ukraine and, more narrowly, the loss by the country of its seagoing status.

The thesis argues that the sudden pipeline disruptions of the early 1990s brought about structural crisis. No time, resources or will existed at the time to resolve it. The realization by the political and industry elites that the crisis was not resolvable accelerated the downfall due to opportunistic corruption in an attempt to monetize existing assets.