Freight Services in Finland – To Russia With Love

Freight services in Finland are being transformed by one single key economic driver – the growth in freight transport demand from Russia. Despite the recent short term slowdown of the Russian economy, the underlying demand is positive and the freight services infrastructure in Finland is expected to continue to be boosted as the requirement for freight transport increases over the medium and long term. Shipping companies and freight forwarders are therefore keeping a keen eye on developments in Finland.

It is believed by the Finnish government and independent analysts that there will be a long term demand for a EU based port to handle Russia’s freight transport and, in fact, this growth is now being seen at the container port of Kotka which has overtaken Helsinki to become Finland’s largest container port, with an estimated 650,000 TEU this year. This reflects a growth of 12% in freight transport through Kotka in the latest year.

The international freight at Kotka is balanced between exports and imports and the container logistics are exemplary in relation to Russian freight forwarding. Empty containers from Russia are back loaded with paper products. This is in contrast to Helsinki which has import-led international freight. This means empty containers have to be railed to Rauma to be filled with paper products for export, incurring additional costs and making international freight transport that much less competitive for the customer.

There are four stevedoring companies active in Kotka, with Steveco the dominant stevedore and the main stevedore operating within freight forwarding of forestry products.

Kotka has completed a 150 hectare development for a new logistics site at the Palaslahti area and this is part of a long term plan to see freight forwarding capacity increased fourfold by 2025. The new development will virtually double the size of the current Mussalo development at Kotka. As Kotka already accounts for over 40% market share of all freight forwarding in Finland, it is clear to see that this will make Kotka a giant within the Finnish freight services infrastructure.

Another port in Finland whose fortunes are closely tied to Russia is Hamina. Hamina is only 35 kilometres from the Russian border. Its performance this year has been the worst of the four main Finnish ports – Hamina, Helsinki, Kotka and Rauma. However, the City of Hamina and the Finnish Government have just approved a vital strategic plan that will help build Hamina’s reputation as a leading Finnish port serving Russia. This is a large scale Ro-Ro and container expansion project which will set it in good stead for the future and position Hamina at the forefront of international freight transport and freight forwarders.

There is currently only one stevedore operating at Hamina, a daughter company of the port authority who prefer to run their own service. However, there is every possibility that this will change in future as it seeks to advance its freight services to better serve the evolving needs of the Russian marketplace. Many a shipping company and freight company is likely to look favourably at sending freight freight through Hamina in future years.

Another factor that will boost Hamina further is that the port is now linked to Antwerp. This will streamline freight to Russia from Finland. Hamina offers all modes of transport to Russia, including regular block trains, trucking and feeder services to St Petersburg.

So although Hamina currently accounts for only 10% of all freight transport in Finland, it is predicted that its star will rise in tandem with the underlying growth in demand from Russia. The love affair between freight forwarders in Finland and the blossoming Russian economy is set to go from strength to strength.

Stephen Willis is Managing Director of RW Freight Services a UK based freight transport company, established in 1971 and operating worldwide freight forwarding services including specialist freight services to and from Finland

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