“Market Potential and Competition Analysis for selected ports of the Amber Coast”
Final Report
Riga, 2/04/2013
Client: Freeport of Ventspils Authority
Prepared by: SIA "NK Konsultāciju birojs"
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013
SIA "NK Konsultāciju birojs" Contacts:
Mūkusalas street 42 Normunds Lukša LV 1004 Riga E-mail: [email protected] Latvia Direct phone: +371 29-115484
Phone: +371 67-609490 Fax: +371 67-609491 www.nkconsulting.lv
Report prepared by: Tobias Merten Vladas Stūrys Normunds Lukša
Page 2 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Notice
This report has been prepared by SIA "NK konsultāciju birojs" (NK) with all reasonable skill, care and diligence within the terms of the Contract with the client, incorporating NK’s General Terms and Conditions of Business and taking account of the manpower and resources devoted to it by agreement with the client. NK disclaims any responsibility to the client and others in respect of any matters outside the scope of the above.
NK undertakes no obligation to notify recipients of events occurring after the date on the front cover that might change the content or conclusion of this report.
In preparing this report NK has used data from both its own internal databases and from third party sources, and has also interviewed representatives of the business community. NK can accept no liability for the accuracy of data sourced in good faith from third-party sources.
This report is confidential to the client and NK accepts no responsibility of whatsoever nature to third parties whom this report, or any part thereof, is made known. Any such party relies upon the report at their own risk.
Limitations and Exceptions
This report is based upon the application of scientific principles and professional judgement to certain facts with resultant subjective interpretations. Professional judgments expressed herein are based on the currently available facts within the limits of the existing data, scope of work, budget and schedule.
To the extent that more definitive conclusions are desired by the client than are warranted by the currently available facts, it is specifically NK’s intent that the conclusions stated herein are intended as guidance and not necessarily as a firm course of action, except where explicitly stated as such. NK makes no warranties, expressed or implied, including, without limitation, warranties as to merchantability or fitness for a particular purpose. In addition, the information provided in this report is not to be construed as legal advice.
Page 3 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013
Executive Summary The Amber Coast ports Klaipeda, Riga, Ventspils, and Tallinn as well as Finnish ports Helsinki and Hamina-Kotka, and the Russian greater port of St. Petersburg are playing a vital and competitive role in the intermodal transport chains from and to (hub) ports in Northern Europe and economic regions in Eastern Europe, in particular for industrial and consumption centers around St. Petersburg and Moscow/Novgorod as well as around Minsk now and in the future.
In the past, the hinterland of a port was relatively well defined due to limited choices of market accessibility. However, with increase efficiency of inland transport infrastructure the distance from / to a market is no longer the unique criterion for port choice. It became a general rule, that the port's potential hinterland can be defined as the area that can be reached at a cheaper cost or shorter time than from another port. Furthermore, with the progressive integration of ports in supply chains and an increasing complexity of transport networks (e.g. hub-and-spoke systems, value-added logistics), the choice of a specific port focus much more on a package or bundle of logistics services along the way to the market.
Figure 1: Analysed overland road routing options from/to port hinterland incl. feeder connections to North European hub ports
Source: SIA "NK konsultāciju birojs"
The delimitated Amber Coast zone of influence is part of a very dynamic economic environment characterized by a lower level of current economic development connected with a strong rate of annual GDP growth during recent years, with exception to the global economic crisis in 2008/2009 which hit the region especially hard. However, mid- to long-term projections indicate a relatively fast recovery and continious economic growth even though on a somewhat lower level than before crisis. Main driver remains the development of Russian economy. Principle
Page 4 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 challenges for the coming years to overcome are deficits in the transport infrastructure, structural unemployment, relatively high inflation rates, shrinking population, shortage of qualified labour and strong competetive environment for limited foreign direct investments.
Until 2030, maritime container traffic may increase overall by almost 140% in the Baltic Sea region, RoRo traffic by almost 70% steered significantly by the development of Northern Russian economy. At the same time and especially in the Baltic States and Russia, overland transport volumes will grow in line and may increase by over 70% in case of truck transportation and by over 40% for rail transports. The container demand for the determined region is projected to grow from in total 967,000 TEUs in 2011 to about 2.59 – 2.73 mio. TEUs with a growth factor between 2.67 and 2.83 depending on the applied scenario and not including transhipment volumes and volumes handled at others than selected ACL ports. Northwest Russia and Belarus volumes are expected to grow most with the economic regions of Moscow and Novgorod as principle growth driver.
The assessment of relevant multi-modal networks, which are framed by maritime intermodal infrastructure, land intermodal infrastructure, road infrastructure, and rail infrastructure reveals, that terminal capacity problems of the past have been overcome. The great port of St. Petersburg is rapidly increasing capacities for container and RoRo in order to cope with the objective to handle Russian cargo at Russian ports. But also new capacities are being added in the ports of Riga, Ventspils, Tallinn, Liepaja, and Klaipeda through new terminals or expansion projects. Overall this will increase competition between ports and consequently between competing corridors.
There are no significant structural changes foreseen in the road network, however, border crossing points are and will remain important bottlenecks for road transport. The construction of Rail Baltica and the improvements of existing rail infrastructure (e.g. electrical traction on main corridors) will have mainly an influence on intra-regional trade of countries along the rail corridor and thus effects the RoRo transportation pattern. It is not expected that oversea container trade will be significantly affected by this project. A weak point in competitiveness of the ACL intermodal range remains lack of logistic infrastructure in the hinterland of the ports (logistic centres, dry ports etc), within which all activities relating to transport, logistics and the distribution of goods - both for national and international transit, are carried out by various operators on a commercial basis. At the same time the regional intermodal network faces and will face in a future new challenges. Immediate challenges are caused from one side by accelerated modernization of the global transport and logistics system, from other side – by growing competition in the port range due to fast development of capacities and especially in the Great port of St. Petersburg. This will require higher competitiveness of every port in the rage and their tight cooperation with land transport and logistics developers and operators. The following table provides an overview of main infrastructre and non-infrastructure related bottlenecks that have been identified, considering the current situation and expected sitiuation based on projected future cargo flows.
Table 1: Evaluation of ACL ports and hinterland bottlenecks SUMMARY OF BOTTLENECKS Current evaluation Evaluation considering future cargo flow forecasts Infrastructural Maritime Not significant Not significant, considering planned infrastructure developments in ports (terminals) Road network Not significant Not significant, considering planned road projects
Page 5 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 SUMMARY OF BOTTLENECKS Current evaluation Evaluation considering future cargo flow forecasts Interoperability of rail Moderate Should be solved by planned rail networks bottlenecks projects and through SMGS and CIM harmonization Rail rolling stock Moderate Remaining actual bottlenecks Block trains to Significant hinterland bottlenecks Hinterland logistic Significant for the Significant bottlenecks might emerge, centres future since no exact strategies and development plans are in place Intermodal terminals Significant for future Bottlenecks can be minimised, implementing modern technologies to fasten modal shift operations Non- Border crossing time Significant Will increase with rise of the cargo infrastructural bottlenecks flow, if no actions implemented Operational Significant Solving of the bottlenecks would bottlenecks within bottlenecks smooth operational cargo flows and train shunting optimize cost levels operation in some ports (e.g. Riga) Source: SIA "NK konsultāciju birojs"
Today’s transport corridor profiles for the region consist of 16 container terminals with in total 95 gantry cranes and 101 dedicated berths operating at the 7 anaylsed ports. They are connected to 10 hub ports in Northern Europe through 14 independent feeder operators and 80 services. On the land side, besides countless independent truck operators, 5 rail operators offering 7 shuttle train services to the main economic regions. In respect of RoRo operation, the 7 ports have 19 dedicated terminals with 43 fixed ramps which are connected with 32 ports in Northern Europe and Scandinavia. There are 80 regular services offered by 11 ferry operators.
Being an important land/sea interface within the analysed transport corridors, a special focus on market position and performance has been given to the ports. Efficiency and effectiveness of container and RoRo terminals is an important factor for the port selection process as port performance may influence the up- and downstream processes of the complete transport chain. In the course of this study, only a high level assessment of important indicators have been done due to limited data availability, however, more detailed results are expected from the study “Operational Challenges to Port Interfaces in the Multi-modal Transport Chain” which is currently elaborated within the Amber Coast Logistics project.
Although RoRo holds a major share of intermodal transportation within the Baltic Sea Region, main focus of further analysis and simulation of sample shipments along the transport corridors have been put on the container market. In terms of market shares, the great port of St. Petersburg gained significant shares in recent years presumably due to infrastructure development and capacity expansion followed by more favourable transport costs and times, and supported by the Russian national transport development strategy. The three main ports of the Baltic States are not impacted from this trend so far. Only the Finnish ports Hamina-Kotka and Helsinki have experienced a significant decline of market share, leading to the assumption, that especially cargo for and from the metropolitan area of St. Petersburg is being affected from this shifting development.
Page 6 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Figure 2: Port share of total container throughput at selected ports, 2005 vs. 2011 in %
Source: SIA "NK konsultāciju birojs" derived from published port statistics
Furthermore, the simulation of sample container shipments along the corridors underlines the initial assumption that changes of market shares are not only a sign for increased capacity or improved infrastructure at a specific port, an aggressive pricing structure of an individual entity or even political driven measures, but more an interrelation between various factors related to overall performance and service quality as well as cost and time measures of transport corridors as a whole. In the context of this study, a virtual set of freight agreements and service contracts along the corridors has been developed to simulate transports along the selected corridors under a user‘s point of view and stored into a database which is part of this studie‘s delivery. For presentation purposes, the in total 2,720 identified routing options have been clustered into 2 main directions: from / to hub ports Antwerp, Bremerhaven, Hamburg, and Rotterdam to / from the economic regions of Moscow and Novgorod (Table 2), and from / to the economic regions Minsk, Daugavpils, and Kaunas / Vilnius (Table 3). Additionally, theoretical external costs per transport mode and shipment size have been applied to each routing option.
Table 2: Total average cost (EUR) and timing (days) per TEU for inbound shipments to Moscow/Novgorod avg. total transport cost incl. avg. total transport cost avg. total outport external cost lead time dry TEU reefer TEU dry TEU reefer TEU Hamina-Kotka 2,775.28 3,308.61 3,506.34 4,039.67 8.5
Helsinki 2,831.87 3,449.22 3,616.39 4,233.75 9.5
Klaipeda 3,076.32 3,643.65 3,854.79 4,422.11 8.3
Riga 2,702.28 3,199.37 3,388.24 3,885.33 8.6
St. Petersburg 2,130.39 2,603,73 2,757.43 3,230.77 8.8
Tallinn 2,880.45 3,383.86 3,637.34 4,140.75 9.4
Page 7 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 avg. total transport cost incl. avg. total transport cost avg. total outport external cost lead time dry TEU reefer TEU dry TEU reefer TEU Ventspils 2,899.43 3,422.42 3,641.40 4,164.38 8.2
Overall avg. 2,756.58 3,287.27 3,485.99 4,016.68 8.8 Source: SIA "NK konsultāciju birojs"
At this level, transport corridor costs through the ports Klaipeda, Tallinn and Ventspils are on the higher side, whereas transport costs through the port of St. Petersburg is the cheapest option. The fastest connection between hub ports and Moscow/Novgorod region is achieved through ports of Klaipeda and Ventspils, transports via Helsinki and Tallinn take the longest.
Table 3: Total average cost (EUR) and timing (days) per TEU for inbound shipments to Minsk region (incl. Daugavpils, Kaunas/Vilnius) avg. total transport cost incl. external avg. total transport cost avg. total outport cost lead time dry TEU reefer TEU dry TEU reefer TEU Klaipeda 1,514.83 1,723.02 1,832.98 2,041.17 7.3
Riga 1,467.90 1,682.98 1,790.98 2,006.06 8.0
Ventspils 1,618.78 1,832.35 1,985.99 2,199.56 7.7
Overall avg. 1,533.84 1,746.12 1,869.98 2,082.26 7.7 Source: SIA "NK konsultāciju birojs"
The clustered region of Minsk, Daugavpils, and Kaunas/Vilnius is served cheapest through the port of Riga, the more expensive option is through the port of Ventspils. However, differences in costs are relatively low between the analysed 3 options. With in average 7.3 days the option through the port of Klaipeda is the fastest whereas the option through the port of Riga takes the longest with in average 8 days.
The issues tackled in the Study are large scale by nature and go beyond borders of one particular partner, so in order to address them and reach synergies, it is suggested to establish a long-term collaborative approach in form of a project or a platform. The selection process of users regarding a specific transport corridor for example is a complex topic which involves various key factors such as port efficiency, geographical location, low port and transport charges, adequate infrastructure, wide range of services, connectivity, among others. Results of this study and especially the simulation of sample shipments provide important indications on certain aspects, but would not allow detailed actions and thus recommendations for a specific party.
At the end of the day an executive institution would be necessary to seek for synergies between the logistics players in the ACL catchment area, to process and evaluate all finding of this but as well up- and downstream Studies within the ACL project and support and coordinate the implementation of these thereof.
Page 8 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Contents
Executive Summary ...... 4 List of Acronyms ...... 12 Introduction ...... 13 1 Macro-economic development, economic outlook and cargo flows ...... 14 1.1 Geographical delimitation and general overview ...... 14 1.2 Macro-economic development and outlook ...... 16 1.2.1 Global outlook ...... 17 1.2.2 The Baltic Sea Region (BSR) ...... 18 1.2.3 Amber Coast zone of influence – insight to selected countries ...... 19 1.3 Trade pattern and cargo flows ...... 23 1.3.1 General context ...... 23 1.3.2 Status quo of freight flows ...... 24 1.3.3 Projected scenarios until 2030 ...... 27 2 Delineation and assessment of relevant multi-modal networks ...... 29 2.1 Maritime infrastructure ...... 29 2.1.1 Port of Hamina-Kotka ...... 30 2.1.2 Port of Helsinki ...... 31 2.1.3 Port of Klaipeda ...... 33 2.1.4 Port of Liepaja ...... 35 2.1.5 Port of Riga ...... 35 2.1.6 Great port of St. Petersburg ...... 37 2.1.7 Port of Tallinn ...... 41 2.1.8 Port of Ventspils ...... 43 2.2 Road infrastructure ...... 44 2.2.1 Lithuania ...... 45 2.2.2 Latvia ...... 45 2.2.3 Estonia ...... 46 2.2.4 Finland ...... 47 2.2.5 Russia ...... 48 2.3 Rail infrastructure ...... 49 2.3.1 Lithuania ...... 49 2.3.2 Latvia ...... 50 2.3.3 Estonia ...... 51 2.3.4 Finland ...... 52 2.3.5 Russia ...... 52
Page 9 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 2.4 Intermodal transfer points in the hinterland of ACL ports ...... 54 2.4.1 Intermodal terminals ...... 54 2.4.2 Logistic capacities ...... 56 2.5 EU-CIS border crossing points ...... 60 2.5.1 Road freight ...... 60 2.5.2 Rail freight ...... 62 2.6 Summary of bottlenecks ACL countries ...... 63 2.7 Development of the transport network of the ACL range ...... 65 2.7.1 Global dimension of eastern ACL ports hinterland...... 65 2.7.2 EU TEN-T network development ...... 65 2.7.3 Baltic Transport Outlook 2030 ...... 66 2.7.4 NDPTL network ...... 66 2.7.5 EU policy for transport neighbourhood ...... 67 2.7.6 Rail Baltica ...... 67 2.8 Conclusions and assessment of relevant multi-modal networks ...... 68 2.8.1 Terminals ...... 68 2.8.2 Road and rail network ...... 69 2.8.3 Intermodal transfer points and hubs ...... 69 2.8.4 Border crossing ...... 70 2.8.5 EU dimension ...... 70 2.8.6 ACL Eastern Baltic multimodal network: full scenario ...... 70 2.8.7 Wider approach ...... 72 3 Transport corridor profiles, sample shipments and business community feedback ...... 73 3.1 Individual transport corridor profiles ...... 73 3.1.1 Ports as gateway and interface between sea and land transport ...... 74 3.1.2 Short sea shipping network (maritime leg) ...... 81 3.1.3 Overland transport profiles ...... 88 3.1.4 External cost and MARPOL...... 92 3.2 Simulation of sample shipments ...... 94 3.2.1 General approach ...... 94 3.2.2 Dry and Reefer container transport on selected corridors ...... 97 3.3 Business community feedback ...... 109 3.3.1 Introduction ...... 109 3.3.2 Summary of the results ...... 110 4 SWOT – Analysis for selected transport corridors ...... 112 4.1 Amber Coast Ports and Belarus ...... 112 4.1.1 Klaipeda – Belarus corridor ...... 112
Page 10 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 4.1.2 Riga – Belarus corridor ...... 113 4.1.3 Ventspils – Belarus corridor ...... 115 4.2 Amber Coast Ports and Russia ...... 116 4.2.1 Klaipeda – Russia corridor ...... 116 4.2.2 Riga – Russia corridor ...... 117 4.2.3 Tallinn – Russia corridor ...... 118 4.2.4 Ventspils – Russia corridor ...... 119 5 Recommendations for possible synergies between Eastern Baltic’s ports ...... 120 6 List of Appendixes ...... 122
Page 11 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 List of Acronyms
ACL Project “Amber Coast Logistics” BCP Border crossing point BSR Baltic Sea Region BTO 2030 Baltic Transport Outlook 2030 CAGR Compound annual growth rate CU Customs Union FVA Freeport of Ventspils Authority IMO MARPOL International Convention For the Prevention Of Pollution From Ships ITU Intermodal transport units LSFS Low Sulphur Surcharge NDPTL Northern Dimension Partnership for transport and logistics NELoC Interreg IIIB project “Networking logistics centres in the Baltic Sea region” NK “NK Konsultāciju birojs” Ltd NORDIM NORDIM study, contracted by countries – members of the Northern Dimension Partnership for Transport and Logistics OSJD Organisation for Co-operation between Railways SECA Sulphur Emission Control Area Study The study “Market Potential and Competition Analysis for selected ports of the Amber Coast” TOR Terms of Reference of the Study WP Work Package of the Project “Amber Coast Logistics”
Page 12 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Introduction SIA "NK konsultāciju birojs" (NK) has been commissioned by the Freeport of Ventspils Authority (FVA) to undertake a study that identifies the market potential and analyses the competitiveness of selected ports located at the Amber Coast. In connection with this work, NK reviewed the macro-economic development, economic outlook and projected cargo flows for the respective region, delineated relevant multi-modal networks and assessed the related transport infrastructure in order to elaborate individual transport corridor profiles. The competitiveness of selected transport corridors and involved ports has been furthermore determined through simulation of sample shipments and survey involving key market players reflecting the view of the users. Results of the analysis and assessments were put into a SWOT – analysis which in turn formed the framework used for the elaboration of conclusions and recommendations for possible synergies between Eastern Baltic’s ports.
The study is a part of the Work Package (WP) 4 “Sustainable and efficient transport concepts and multi-modal transport chains” in the context of the project Amber Coast Logistics (ACL), which is financed by the Baltic Sea Region Programme 2007-2013, implementing EU Strategy for the Baltic Sea Region (BSR) and its Action Plan. ACL is a collaborative logistics project that supports the coordinated development of multimodal Logistics Centres and thus fosters the connection of remote areas in the southern and eastern Baltic Sea Region. The project’s objective is to thereby improve cargo flows and accessibility both on sea and landside and strengthen economic ties between emerging eastern European countries like Belarus, Russian Federation and Ukraine and EU member states within the Baltic Sea Region (BSR), in order to facilitate sustainable mutual development.
The study has been carried out by NK in the period from 18th of November 2012 to 2nd of April 2013.
Page 13 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013
1 Macro-economic development, economic outlook and cargo flows This chapter serves to delimitate the geographical area of the study and aims to provide background information on the relevant macro-economic development and outlook of such, necessary for the evaluation of market potentials and SWOT analysis at a later stage of this report. Furthermore, key findings of ACL study 4.1b "Macro economic development and multi- modal cargo flows South Eastern BSR/Belarus" are summarised and used where possible, to describe the potential market development until 2030.
1.1 Geographical delimitation and general overview The overall zone of influence or so called catchment area of the Amber Coast Ports is considered to consist of nine countries located in the Eastern part of the European Union and Western part of CIS States1 with approximately 150 million inhabitants. As such, it is a dynamic and developing environment of emerging economies, which is characterised by good opportunities but also strong competition and complex political conditions. Relatively low population and industry density resulting in longer transportation ways to consumers compared to transportation ways in Central and Western Europe. Especially the Baltic Sea Region (BSR)2 which encompasses member countries of both EU27 and CIS with direct access to the Baltic Sea has developed for centuries close and intensive trade relationships and networks, thus has built up its own characteristics and economic dynamics.
Of particular relevance to the scope of this study, the following metropolitan areas have been identified as key driver for demand of intermodal transportation and logistics solutions within the region:
Lithuania –> Klaipeda, Kaunas / Vilnius; Belarus -> Minsk; Latvia -> Riga, Daugavpils; Estonia -> Tallinn, Tartu; Russia -> St. Petersburg, Moscow, and Novgorod.
Following the above, long distances from / to markets and industries, the concentration of relatively few dense areas and different status quo of political, economic and infrastructure developments within the region causing special demands and as such certain challenges to the overall transport network. Metropolitan areas with a local port are usually served directly through their own port. Possible exception from this unwritten rule within the region are the port of Riga, where Ventspils may partial have a competitive advantage in respect of overland distance compared to sea distance, and the port of St. Petersburg where Finnish ports such as Helsinki or Hamina-Kotka may off-set capacity constraints of local terminals and also may have a competitive advantage in regards of distance. For any region, and any single definition of distance or impedance, there exists a port which is objectively closest to the cargo origin or
11 CIS is the international organisation or alliance consisting of 9 official member states, namely Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Uzbekistan and the 2 unofficial member states Turkmenistan and Urkaine. 2 The Baltic Sea Region (BSR) consists of Denmark, Estonia, Finland, Germany, Latvia, Lithuania, Poland, Russia, and Sweden. Page 14 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 destination. One might assume that the cargo of a specific region is routed via the nearest suitable port so that hinterland transportation becomes minimised. In practice, the distance is only one criterion among various like transport cost, transport time and also estimated external costs. However, these initial assumptions among others will be further analysed during this study.
Russia is by far the biggest market within the region. As a matter of rather limited port capacities, a huge share of Russian import and export cargo needs to be transhipped in ports outside the country. From a high level assessment it can be concluded that Russian import flows will need almost all available intermodal port capacity in the Gulf of Finland and the Baltic States. Belarus, as a landlocked country, also strongly depends on the Baltic Sea ports. Naturally, a historical grown specialization of individual ports of the region can be recognized. In the context of this study, the following ports have been selected for further analysis in respect of competition and market potential:
Amber Coast ports:
Klaipeda in Lithuania; Riga and Ventspils in Latvia; Tallinn in Estonia.
Directly competing ports:
Helsinki and Kotka in Finland; St. Petersburg in Russia.
Figure 3: Selected ports and drafted transport corridors serving key metropolitan areas
Source: SIA "NK konsultāciju birojs" Page 15 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013
Beside Russians’ own port facilities, Finnish ports are playing a vital and competitive role in transport supply of non-bulk goods for the Russian market, in particular for industrial and consumption centres around St. Petersburg and greater Moscow. At the moment, the Amber Coast ports can be considered being complementary intermodal port capacity providers rather than strong competitors to Finnish ports or the greater port of St. Petersburg, although they are assumed to substantially lack of land transport infrastructure, suffer from incompatible border crossings and Russia’s policy to become independent especially from its former CIS partner countries.
The competitive position of the Amber Coast Ports vis-à-vis its competitors depends on the costs and quality of the transport chains, which in turn depend on the costs and timing of seaborne transport, the port costs (handling and port dues) and performances, and the hinterland costs and timing. For the latter, the distance and the availability of intermodal connections are key factors.
1.2 Macro-economic development and outlook The economic development of countries and increase of population levels affects the volume of foreign trade and as such the transport activity of particular states while, simultaneously, the level of foreign trade stimulates economic growth. Export and import of investment and consumption goods need proper transport services. In the globalised trade environment of today, trade relations between different countries, regions and companies form a complex pattern with the result that global as well as regional developments are directly influencing the business and activities of the Amber Coast ports as well as their customers and users. Selected macro-economic indicators are being analysed in this chapter in order to identify and describe the general market potentials of selected Amber Coast ports considering the overall economic environment and its potential development.
Figure 4: Map of key export flows and intra-regional trade relations in 2011
Source: SIA "NK konsultāciju birojs" derived from IMF and UN
Page 16 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 1.2.1 Global outlook There will be continued global population growth, with growth rates decreasing over time. Global population is expected to increase from 6.5 billion in 2005 to 8.2 billion in 2030 with strong regional differences. Population in North America as well as in Asia is expected to grow slightly whereas Europe will experience a light decrease of population, with stronger decreasing tendencies in Eastern Europe and Russia. Latin America and African population on the other hand is expected to increase more significant. At the same time, urbanization levels are increasing rapidly around the world, particularly in developing countries. For the first time in history, more people live in cities and towns than in rural areas and this trend is expected to continue with great increase in the number and size of megacities, particularly in Asia. This tendency is considered to have positive influences on economic growth and at the same time it generates special requirements to transport infrastructure developments and integrated logistics solution.3
The world GDP is expected to grow strongly, with indication to double until 2030. However, as in recent years the level of growth in advanced economies in North America and Europe will be lower than in emerging and developing economies in Asia, Latin America and Africa.4
Figure 5: GDP growth rates per annum and economic region 2002 – 2017, in %
Source: SIA "NK konsultāciju birojs" derived from Worldbank Asian economic growth is expected to be very strong over the period to 2015, with growth widely spread round Asia and South-East Asia. In the medium and longer term, strong Asian growth is expected to continue but at lower rates, lessening the differences in growth rates between Asia and the rest of the world. Nevertheless, GDP in China and India could increase three to four times over the period to 2030.
Europe as a whole is likely to benefit from the stronger economic growth in and increasing trade with China, India and other developing regions. In the medium term, robust European economic growth of around 1.8% p.a. is expected over the period 2015 – 2030.
3 Source: United Nations “World Population Prospects: The 2006 Revision” 4 Source: International Monetary Fund (2011), World Economic Outlook Update Page 17 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 GDP growth in North America in the short term will be below trend levels as the United States deals with the consequences of the financial crisis and recession. GDP growth from 2015 to 2030 is expected to be around 3% p.a.
Higher growth than historic trend levels is expected in some large economies and in developing countries in other regions, including the Middle East, Latin America and Africa.
1.2.2 The Baltic Sea Region (BSR) Main economic indicators of the Baltic Sea Region are overall positive and experienced a good recovery from the financial and real estate crisis in 2008/2009. However, in principal two levels of economic development exist within the BSR. Countries such as Denmark, Sweden, Finland and Germany (former EU 15) are characterized by one of the highest levels of GDP per capita in the EU and additionally by a relatively low level of economic growth. On the other hand, the new member states are marked by a lower level of current economic development connected with a strong rate of annual GDP growth.
Table 4: Main economic indicators for countries of the Baltic Sea Region in 20115 Country Area, km2 Population, GDP GDP per Net inflow of Inflation Unemployment mio. growth, capita, foreign rate, % rate, % % USD investment, USD billion Denmark 43.094 5.5 0.8 41.015 14.8 2.8 4.8 Estonia 45.227 1.3 8.3 20.380 0.3 5.0 10.7 Finland 338.145 5.4 2.7 37.581 0.05 3.5 7.5 Germany 375.021 81.7 3.0 39.414 40.4 2.3 8.3 Latvia 64.589 2.1 7.5 18.928 1.6 4.4 13.1 Lithuania 65.200 3.2 8.1 21.576 1.2 4.1 11.4 Poland 312.685 38.2 4.3 21.281 15.1 4.2 8.8 Russia 17.075.400 141.2 4.3 21.358 52.9 8.4 7.0 Sweden 449.964 9.5 3.9 41.447 12.1 3.0 7.3 Sources: EIU, Swedbank, IMF, Worldbank The Baltic Sea Region in general showed a particularly fast economic growth during recent years with exception to the global economic crisis in 2008/2009 which hit the region especially hard. However, a slowdown of growth is assumed for 2012 which most likely will improve slightly in 2013. The short-term forecast for 2014 predicts an average growth of 2.9% – 3.1% for the region which still is below the level of an average regional growth potential of about 4% p.a. It must be noticed that the likelihood of weak growth in nearby markets for several years to come will have significant influence on BSR economies with the requisition to further foster initiated reforms that strengthen structural and institutional conditions with the objective to gain more competitiveness and, in the mid-term, to find external financial resources to invest in regional infrastructure. A more sustainable economic development especially in the Baltic countries with geographical proximity to Belarus, Russia and Ukraine probably can be achieved by shifting the focus from production of low-cost industrial goods more toward higher value-added services and higher value-added industrial goods. The long-term average growth rate for the BSR is expected to be between 3% to 3.5 % p.a.
Increasing inflation usually denotes slowing of economy as prices for food, commodities and services rise and the currency weakens. The eastern economies of the BSR historically suffer of higher inflation rates with negative impact on domestic demand, slower infrastructure growth as financial resources especially loans becoming costlier and foreign investors may hold back
5 Note: inflation and unemployment rate as average between 2006 - 2011 Page 18 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 investment decisions as the return from investments decreases with an increasing inflation. Nevertheless, improvements have been seen during the last years and it is expected that rates will stabilize in the mid- to long-term. An important factor as it is foreseen that public money will become more shorten in the near future and more private and foreign direct investment (FDI) will be required to finance especially larger infrastructure projects but as well to overcome bottlenecks in the labour markets and education systems (e.g. expand labour market regions, collaborations between education and research, adopting laws that improve efficiency of labour markets). In general the competition for FDI is tightening for the BSR as investment is still clearly seeking out markets with the fastest growth.
The population in the BSR is shrinking and there are certain indications that within the coming 40 – 50 years the region will lose some 20% of its current population, a trend which affects especially Russia and the Baltic States. The decline of population has negative impacts on the labour market resulting in shortage of qualified labour and as such on not utilised economic growth potential in the long-term. Additionally, high unemployment rates especially in eastern countries of the BSR indicate that risk of structural unemployment which only can be overcome with serious and cost intensive governmental actions.
1.2.3 Amber Coast zone of influence – insight to selected countries In the following a more detailed insight to selected countries as relevant to the study is given.
Insight Belarus Belarus experienced a period of economic growth along with many other CIS6 economies.
The average GDP growth in the period 2000 – 2011 was 7.0%, with a relative low impact during economic crisis in 2008/2009 compared to other countries in the region. In this respect, especially the key location as a transit route between the EU and Russia has enabled the country to contribute on regional growth. However, Belarus is being seen as the last real communist country in Europe.
The economic development which is mostly state-controlled may be impacted in the mid- to long-term by constraints such as:
high dependence of Russian economy, limited access to external financing sources, high inflation rate, however over 70% of goods consisted in consumption basket have state controlled prices, declining population – decline by 17% possible until 2030.
On the other hand, positive factors for the economic development are:
moderate general government deficits, substantial industrial stock, highly educated workforce, very low unemployment level.
For the period 2011 – 2030 an average GDP growth rate of 2.7% is assumed. Main economic region as relevant to this study is the metropolitan area of Minsk.
6 Note: CIS – Commonwealth of Independent States Page 19 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Foreign trade is mostly being done with Russia and the EU. The main imports are mineral products (41.7%), machinery and equipment (23.1%), chemical products (11.7%), metals (10.0%), and food products (7.0%). Key export commodities are mineral products (35.5%), chemical products (21.0%), machinery and equipment (19.7%), food products (9.5%) and metals (6.0%).
The average time for export is supposed to be 20 days, the cost to export per container is estimated with USD 1,722. Import wise the average time is considered to be 26 days and the cost to import approximately USD 1,720.7
Insight Estonia Estonia’s‘ average GDP growth in the period 2000 – 2011 was 4.1%, however this growth rate already includes the strong impact the financial crisis in 2008/2009 caused. Estonia like the other two Baltic States countries8 strongly depend on export and tourism. The recovery after the crisis was driven in principal by exports, whereas the current foundation of growth is shifting from exports to domestic demand supported by favourable developments in the labour market and investment activities driven by state projects. The opening of the electricity market in 2013 may negatively impact private consumption in the short-term.
There are certain constraints which may impact the economic development in the mid- to long- term, namely:
high inflation rate, declining population (2011 census indicate that population has fallen by 5.5% since 2000), lack of qualified labour in certain sectors (e.g. manufacturing, ICT, health care, and construction), high structural unemployment (long-term unemployment).
On the other hand, positive factors for the economic development are:
very low public sector debt level (6.1% of GDP in 2011), several private and public sector cooperation projects to overcome lack of qualified labour, flexible labour market (e.g. low staff turnover costs, low unionization), innovation awareness - switch go a more knowledge based economy.
For the period 2011 – 2030 an average GDP growth rate of 3.4% is assumed. Main economic regions as relevant to this study are the metropolitan areas of Tallinn and Tartu.
The Estonian economy benefits from strong electronics and telecommunications sectors and is greatly influenced by developments in Finland, Sweden, and Germany, three major trading partners. The main imports are machinery and equipment (21.5%); mineral products (13.8%), transport equipment (10.3%), chemicals (9.3%) and main exports are machinery and equipment (20.9%), mineral products (13.2%), non-precious metals / metal products (7.9%) and timber products (6.2%).
7 Source: www.unece.org/fileadmin/DAM/trans/doc/2010/itc/ECE-TRANS-210.pdf 8 Note: the three Baltic States countries are: Estonia, Latvia and Lithuania Page 20 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 The average time for export is supposed to be very fast with 5 days, the cost to export per container is estimated with USD 730. The average time for import also is supposed to be 5 days and the cost to import sums up at approximately USD 740.9
Insight Latvia The average GDP growth between 2000 and 2011 of the Latvian economy was 3.8% including already strong impact of the financial crisis in 2008/2009. Major growth driver of the economy will remain export-related activities even though private consumption has recently strengthened. Export growth may become more difficult in the mid-term when recession-driven improvements such as wage cuts fading away. Significant underinvestment in productive facilities and infrastructure in the past requires a continuous development of these along with investments in logistics, innovations and R&D.
Main constraints that may impact the further economic development are:
Sustainable development of infrastructure and production facilities required; Need of attracting FDI as most likely EU funds allocated for Latvia will be significantly reduced; Certain resistance to reforms in many areas and strongly depends on the political cycle; declining population; high long-term unemployment rate.
As positive factors for the economic development can be considered:
Latvia may fulfil the Maastricht criteria on public finances, price and exchange rate stability by 2014; Improved entrepreneurial environment; High privatization level; Further decline of public debt expected (currently 44% of GDP).
For the period 2011 – 2030 an average GDP growth rate of 3.4% is assumed. Main economic regions as relevant to this study are the metropolitan areas of Riga and Daugavpils.
Income from exports of Latvian commodities comes from timber products (22.4%), metals (14.9%), agricultural and food products (14.5%), machinery and equipments (10.5%). Main import commodities are machinery and equipment (20.5%), transport equipment (14.5%), products of chemical industry (12.9%) and mineral products (12.0%).
The average time for export is approximately 13 days, and the cost to export per container is estimated with USD 900. The average time for import is supposed to be 12 days with a cost to import of approximately USD 850.10
Insight Lithuania
Lithuania is the biggest economy of the 3 Baltic States countries, with an average GDP growth between 2000 and 2011 of 4.5%. The service sector accounts for the largest share of GDP, tourism is becoming increasingly important. However, main growth driver for the economy is the export of services and manufactured goods as well as of dairy products.
9 Source: www.unece.org/fileadmin/DAM/trans/doc/2010/itc/ECE-TRANS-210.pdf 10 Source: www.unece.org/fileadmin/DAM/trans/doc/2010/itc/ECE-TRANS-210.pdf Page 21 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Export growth is considered to be stable and domestic demand demonstrates reasonable growth rates. The shift to a more knowledge-based economy and focus on higher value products contribute positively to countries economy in the long run.
Main constraints that may impact the further economic development are:
Demographic change might negative effect consumption and overall GDP in the long- term, labour force decreasing faster than population, labour productivity relatively low, high unemployment rate and one of the lowest minimum monthly salary in the EU.
As positive factors for the economic development can be considered:
Lithuania likely to comply with Maastricht criteria in 2013, however introduction of EUR not yet decided, Inflation rate is on the lower side compared to the other 2 Baltic States, Improved main structural reforms for reduction of shadow economy, downsizing bureaucracy and make labour market more flexible, Well developed and modern infrastructure, Shift towards a knowledge-based economy (e.g. biotechnology, IT, mechatronics).
An average GDP growth rate of 4.0% is projected for the period 2011 – 2030. The metropolitan regions of Kaunas and Vilnius are considered as main economic region relevant for this study.
Income from exports are mainly generated by mineral products (25.5%), agricultural and food products (16.5%), machinery and equipments (12.0%), metals and other manufactured goods (10.3%), chemical products (9.2%), vehicles and transport equipment (7.7%), and textiles (5.5%). Main import commodities are mineral products (34.3%), machinery and equipments (13.7%), food and foodstuff products (12.2%), chemical products (10.3%), and vehicles and transport equipment (9.2%).
The average time for export is supposed to be 10 days, the cost to export per container is estimated with USD 870. Import wise the average time is considered to be 13 days and the cost to import approximately USD 980.11
Insight Russia Russia as the biggest economy in the region experienced an average GDP growth of 4.8% in the period 2000 – 2011. The economy was strongly impacted by the financial crisis in 2008/2009 but quickly recovered to almost previous growth rates. The Russian economy is heavily dependent on its rich natural resources. In fact, over 75% of all Russian exports and much of the industrial growth rely on the exploitation of resources. In 2007, the value of imports of goods and services outpaced exports from Russia; by 2015 imports of goods and services are expected to be almost double than the exports in value.
The domestic demand has been on an upward trend since 1999 and is expected to continue with a strong growth at least until 2020.
There are certain constraints which may impact the economic development in the mid- to long- term, namely:
11 Source: www.unece.org/fileadmin/DAM/trans/doc/2010/itc/ECE-TRANS-210.pdf Page 22 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 high inflation rates, however with a decreasing trend, declining population of about 9% until 2030, economy strongly depends on export of natural resources which are limited, negative trade balance, lack of skilled labour in certain industries, oligopolistic key industries.
On the other hand, positive factors for the economic development are:
liberalisation of foreign direct investments, strong backlog demand of population in conjunction with increasing salaries, moderate unemployment rate expected in the mid- to long-term, development of new and/or deployment further of existing oil and gas fields.
For the period 2011 – 2030 an average GDP growth rate of 3.2% is projected. Relevant to the context of this study, the metropolitan regions of St. Petersburg, Moscow, and Novgorod are considered as main economic region of Northwest Russia.
Russia has a complete range of mining and extractive industries producing coal, oil, gas, chemicals, and metals; all forms of machine building, consumer durables, textiles, foodstuffs and handicrafts. The main Russian exports are oil, fuel and gas (65%), metals (13.5), chemicals (5.5%), machinery and equipment (5.0%). Main imports are machinery and equipment (43.9%), chemicals (12.0%), food and agricultural products (11.7%) and metals (6.6%).
The average time for export and import is considered on the same level and with 36 days extremely high compared to European neighbours. Consequently, the cost to import / export are considered to have a value of approximately USD 2,150.12
1.3 Trade pattern and cargo flows
1.3.1 General context The selected countries of the Amber Coast relevant to this study, namely Belarus, Estonia, Latvia, Lithuania, and Russia are part of the Baltic Sea Region which is a European logistical hub with its year-round deepwater ports, world-class airline services covering five continents, and railway connections from Valencia in Spain to Vladivostok on Russia’s Pacific coast, and across central Asia to China.
The main foreign trade partners of the selected countries are located within the region. The Baltic Sea in many cases is, therefore, the barrier separating these partners. On the other hand, it is the shortest and easiest way of goods exchange. Main trading partners of the selected countries and trading direction are indicated in the following table.
Table 5: Main trading partners, import / export share of total foreign trade in %, 2011 Country Belarus Estonia Latvia Lithuania Russia Partner Import Export Import Export Import Export Import Export Import Export Belarus 4.0 2.0 2.5 5.2 Estonia 7.0 14.0 2.8 6.6 Latvia 4.1 5.7 8.9 6.6 10.2 Lithuania 6.4 4.8 19.0 18.0
12 Source: www.unece.org/fileadmin/DAM/trans/doc/2010/itc/ECE-TRANS-210.pdf Page 23 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Country Belarus Estonia Latvia Lithuania Russia Partner Import Export Import Export Import Export Import Export Import Export Russia 59.8 36.1 13.1 8.1 9.0 11.0 32.8 16.6
Belgium 3.1 China 2.9 3.0 15.8 6.8 Denmark 3.0 Finland 18.2 18.4 5.0 3.0 1.9 2.6 France 2.0 4.1 4.3 2.9 Germany 7.6 3.0 12.4 5.1 12.0 8.0 9.7 9.3 12.3 6.6 Italy 2.2 3.0 3.2 4.4 6.3 Japan 4.9 2.8 Netherlands 17.8 4.0 2.0 4.9 6.1 1.9 12.1 Norway 2.0 Poland 2.9 5.0 8.0 6.0 9.1 6.9 2.2 4.1 South 3.8 2.6 Korea Sweden 9.0 12.4 4.0 6.0 3.3 3.6 Turkey 2.1 4.9 Ukraine 5.4 6.0 United 6.3 3.0 4.1 2.5 2.7 Kingdom United 4.8 3.2 States Sources: Eurostat, CISstat, GKS The main trading partners and trading directions provide as such a first impression of how transport flows of commodities may look like and from which individual economic developments they may be influenced. In terms of containerized traffic, the region is a mainly import driven business dominated by the Northwest Russian market, especially regional economic developments are influencing the trade patterns and as such the transport flows.
A major weakness of regional container handling industry is relatively low export volumes. Only for Russia it is assumed, that today every 4 containers of cargo imported into Russia match only 1 exported container while the remaining 3 are running empty. Imports mostly represented by a broad range of consumer goods. However, there can be recognised an ongoing shift from bulk / general cargo to containerization which is heavily needed as today, on TEU per 1,000 capita basis, Russian’s level of containerization is 4 to 5 times lower than in Western Europe.
The common operational routing of cargo flows and potential future development as well as volumes have been mainly derived from the ACL study 4.1b "Macro economic development and multi-modal cargo flows South Eastern BSR/Belarus" and are further described in the following sub-chapters as relevant to this study.
1.3.2 Status quo of freight flows The major container ports located at the Amber Coast handled in total 3.4 million TEUs in 2011 which can be categorized into intra-Baltic and extra-Baltic traffic. Being part of the extra-Baltic traffic, the “North Range” traffic with a total volume of 1.95 million TEUs consists mainly of feeder traffic that is being shipped from/to deep-sea origins / destinations and being transhipped in the Hamburg-Le Havre range. The “deep-sea / other Europe” traffic with a volume of in total 640,000 TEUs basically represents direct calls in Amber Coast ports on long distance services (e.g. Maersk service Far East – Europe with direct call in Gdansk). The intra-Baltic traffic with a volume of 840,000 TEUs in 2011 consists of mainly transhipment containers (440,000 TEUs
Page 24 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 from direct calls and North Range ports, 200,000 TEUs from/to Swedish and Danish ports) and effective intra Baltic Trade with a volume of approximately 190,000 TEUs. The share of intra Baltic container trade is rather small as the BSR has an established and very well developed ferry network where the container often cannot compete in pricing and quality of transport.13
Figure 6: Effective maritime trading partners in “Lo-Lo” container traffic of major Amber Coast Ports 2011
Source: ACL study 4.1b "Macro economic development and multi-modal cargo flows South Eastern BSR/Belarus" The selected ports of this study are considered as transit gateways for the respective hinterland, in other words, multimodal interfaces. Thus, transhipment of containers in the selected ports almost does not exist excepting in Klaipeda and Tallinn where in a limited extend, certain transhipment activities can be observed. Following the findings and assumptions of the ACL study 4.1b "Macro economic development and multi-modal cargo flows South Eastern BSR/Belarus", the selected Amber Coast ports Klaipeda, Ventspils, Riga, and Tallinn are main competitors for market container demand in Northwest Russia, Estonia, Latvia, Lithuania, and Belarus which totalled in 2011 approximately 967,000 TEUs. Out of this amount, approximately 816,000 TEUs can be assigned to the main economic regions as illustrated in the following figure.
13 Source: ACL study 4.1b "Macro economic development and multi-modal cargo flows South Eastern BSR/Belarus" Page 25 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013
Figure 7: Container demand of main economic regions in TEUs, 2011
Source: SIA "NK konsultāciju birojs" derived from ACL study 4.1b "Macro economic development and multi-modal cargo flows South Eastern BSR/Belarus" The hinterland modal split used to satisfy this demand is estimated as following:
Klaipeda: 62% by truck (domestic and transit), 38% railway (transit); Riga: 100% by truck (domestic), 20% by train (transit to Russia); Ventspils: 100% by truck (domestic), 20% by train (transit to Russia); Tallinn: 86% by truck (domestic and transit), 14% by train (transit to Russia).
It is obvious that the major share of demand is assigned to Northwest Russia. The above mentioned container demand volumes are based on current transport patterns and handling activities at Amber Coast ports. Nevertheless, as a significant amount of Russian import containers is handled in Finnish ports (e.g. Hamina-Kotka, and Helsinki), and of course in the port of St. Petersburg, certain market potential might be found here as well, especially for containers with destination Moscow region. Even though Russia seeks to steer all export and majority of import containers through own ports, capacity constraints also in the mid- to long- term may provide certain additional opportunities for selected Amber Coast ports. Today, about 60% of total Russian container volumes are handled in the Baltic Sea Basin, which means 3.06 million TEUs out of 5.1 million TEUs demanded in 2011. This demand may reach 8.9 million TEUS or 5.34 million TEUs respectively in 2016.14 Considering known port capacity building schemes it is anticipated that still in 2020 Russian port capacities will experience deficit in handling capacity of up to 54% mainly driven by import related transport flows.
14 Source: Gazprombank estimates 2012 Page 26 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 1.3.3 Projected scenarios until 2030 It can be expected that the region will recover relatively quickly from current crisis and may experience strong growth rates until 2030 within the freight transport. Especially building materials and manufactured goods as well as agriculture and foodstuff will contribute to this sustainable growth. Maritime container traffic may increase overall by almost 140% in the region, RoRo traffic by almost 70% steered significantly by the development of Northern Russian economy. At the same time and especially in the Baltic States and Russia, overland transport volumes will grow in line and may increase by over 70% in case of truck transportation and by over 40% for rail transports.15 Based on the ACL study 4.1b "Macro economic development and multi-modal cargo flows South Eastern BSR/Belarus", in the following the three development scenarios until 2030 have been summarised as relevant to the scope of this study and the overall country demand has been assigned to the previously identified economic regions. The following table shows the actual container demand (2011) and the projected demand (2030) which in principal is the hinterland demand of TEUs the selected ports of this study competing for, not including transhipment volumes and Russian volumes handled at Finnish ports and the port of St. Petersburg.
Table 6: summarised container demand 2011 to 2030 for selected regions serviced through Amber Coast ports, in 1.000 TEUs Growth factor Region base year 2011 projection 2030 2011 - 2030
Northwest Russia Total 501 1,496.3 – 1,627.7 2.99 St. Petersburg est. 40 120 - 131 Moscow est. 380 1,123 – 1,221 Novgorod est. 81 253.3 – 275.7
Belarus Total 60 144.8 – 159.2 2.41 Minsk 40 97 – 107 Other domestic 20 47.9 – 52.2
Latvia Total 101 235.5 2.33 Riga 61 142 Daugavpils est. 15 16 Other domestic est. 25 77.5
Lithuania Total 148 345 2.33 Vilnius 45 104 Kaunas 37 87 Other domestic 66 154
Estonia Total 157 366 2.33 Tallinn 94 220 Tartu est. 23 55 Other domestic 40 91
Total volume 967 2,587.6 – 2,733.4 2.67 – 2.83 Source: SIA "NK konsultāciju birojs" derived from ACL study 4.1b "Macro economic development and multi-modal cargo flows South Eastern BSR/Belarus" The applied scenarios for the projection of container demand in 2030 only will influence market demand of Northwest Russia and Belarus within the innovation scenario, indicated in above table as range for the possible demand. Whereas Northwest Russian demand is estimated to be less than in the baseline scenario, Belarus demand is estimated to be higher. The innovation
15 Source: Baltic Transport Outlook 2030 Page 27 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 scenario considers an increasing share of direct calls in the Amber Coast and an international agreement to reduce rail-transit tariffs.
Figure 8: Container demand of main economic regions in TEUs, 2030
Source: SIA "NK konsultāciju birojs" derived from ACL study 4.1b "Macro economic development and multi-modal cargo flows South Eastern BSR/Belarus"
Page 28 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013
2 Delineation and assessment of relevant multi-modal networks This chapter of the Study sets up a holistic view of the intermodal transportation capacity in the Amber Coast ports range on Eastern Baltic and assesses intermodal capabilities and potential prospects in the Klaipeda – Helsinki port range.
The examined area covers the hinterland of the ports of Klaipeda, Riga, Ventspils, Tallinn, Helsinki / Hamina-Kotka, and St. Petersburg. RoRo terminal of the port of Port of Liepaja is included in the analysis as well, as this port is starting to become a noticeable player in the range.
The delineation of the multi-modal networks is framed by four components: maritime intermodal infrastructure; land intermodal infrastructure; road infrastructure; rail infrastructure. It is accomplished by identification of terminal operators in the ports and their clients – marine container and RoRo carriers.
Initial data collection for this work package was carried out using publicly available sources and databases. Characteristics of the maritime terminals conclude their physical parameters. The general overview of operational performance indicators is also included, further details of operational performance are the subject of another study in frame of the same WP4 of the ACL project - the “Operational Challenges to Port Interfaces in the Multi-modal Transport Chain (Maritime and Hinterland Connections)“.
The analysis of the network demonstrates that efforts of both public and private stakeholders, being put for modernization and development of the transport and logistics system in the region allowed to successfully meet the rapidly growing demand of industries and trade for movement of goods in intermodal transport units (containers and trailers). Nevertheless future developments will require higher competitiveness of every port in the rage and their tight cooperation with land transport and logistics developers and operators.
2.1 Maritime infrastructure This chapter introduces all maritime intermodal terminals in the Klaipeda – Helsinki range, identifying their main technical characteristics and shipping lines, regularly calling those terminals. Some terminals, being well equipped, recently have no clients for containerized or RoRo cargo; those terminals are as well presented in tables, but marked in Italic fonts.
Information also includes short characteristics of logistics and industry area (if such is being developed in the port), hinterland access and character of development plans, foreseen by port authorities.
Page 29 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 2.1.1 Port of Hamina-Kotka
Table 7 Port of Hamina-Kotka fact sheet PORT OF HAMINAKOTKA Location of harbours
Note: Port of Hamina-Kotka Ltd is a limited company founded in 2011 to administer the port activities in the cities of Kotka and Hamina. The company is a fully owned joint venture of the cities. Kotkan Satamatalot Oy is a fully owned subsidiary of the Port of Hamina-Kotka, which rents warehouses, offices and ground space in the port area Intermodal terminals Container handling Ro-Ro handling Steveco Oy (Mussalo) Steveco Oy (Hamina) http://www.steveco.fi/en/Locations/Kotk http://www.steveco.fi/en/Locations/Hami a/Terminal%20information na Steveco Oy (Hamina) Steveco Oy (Hietanen) http://www.steveco.fi/en/Locations/Ham http://www.steveco.fi/en/Locations/Kotka ina /Terminal%20information Finnsteve Oy AB (Mussalo) http://www.finnsteve.com/location/ Multi-Link Terminals Ltd Oy (Mussalo) www.mlt.fi Source: web sites of the port of Hamina-Kotka and terminals Terminal infrastructure Terminal →
and
superstructure
Infrastructure characteristics ↓
Link Link
-
Steveco Oy (Mussalo) Steveco Oy (Hamina) Finnsteve Oy AB (Mussalo) Multi TerminalsLtd Oy (Mussalo) Steveco Oy (Hamina) Steveco Oy (Hietanen) Containers RoRo Draught m. 12 12,5 10 10 Berths - number Berths – length m 1 000 1 200 250 1 050 Ramps 5 Max vessel length m. Storage area open m² 67 700 Storage area TEU 20 000 1 600 Refer plugs 300 4 10 Storage area dangerous goods Storage area covered m² 36 000 50 000 114 000
Page 30 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 PORT OF HAMINAKOTKA Operational capacity TEU/y Gantry cranes STS 2 Gantry cranes RTG 1 Mobile cranes 3 Source: web sites of the port of Hamina-Kotka and terminals Services and connectivity TERMINAL SHIPPING LINE
Steveco Oy (Mussalo) CMA CGM; SC; OOCL; Seago Finnsteve Oy AB (Mussalo) Line; Team Lines; Unifeeder Multi-Link Terminals Ltd Oy (Mussalo)
Container Steveco Oy (Hamina) MSC
Steveco Oy (Hamina) Transfennica Steveco Oy (Hietanen) Finnlines; Mann Lines; UECC;
RoRo UPM Seaways Source: web sites of the port of Hamina-Kotka and terminals Logistics and Lappeenranta Free Zone Ltd. is a wholly-owned subsidiary of the City of industry area Lappeenranta. Operations began in Raippo in 1970 with the establishment of the Konela car import centre. The development of the Mustola Logistics Centre began in 1987. The business idea of the Lappeenranta Free Zone is to offer free zone services to Finnish and foreign companies by taking advantage of our location on the EU and Russian border. Raippo and Mustola are especially well-suited for import, export and transit warehousing. Hinterland Port of Hamina-Kotka is well connected with the road E18 Helsinki – Vaalimaa which access is the main road connecting Southern Finland (Helsinki) with Russia (St. Petersburg and Moscow). In Hamina, the E18 traffic uses the street network through the town. In the north both harbours are connected with the Helsinki-Vainikkala railway corridor, which is the main railway connection between Finland and Russia. Development With merger of two ports the existing investment plans were postponed for both plans ports, remaining only minor investments in the next 5-10 years.
2.1.2 Port of Helsinki
Table 8 Port of Helsinki fact sheet PORT OF HELSINKI Location of harbours
Note: Port of Helsinki consists of four harbours: West and South harbours in a city, serving mainly RoRo lines and Vuosaari Harbour – main cargo port.
Page 31 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 PORT OF HELSINKI Intermodal terminals Container handling Ro-Ro handling Finnsteve Oy AB Finnsteve Oy AB http://www.finnsteve.com/location/helsinki http://www.finnsteve.com/location/helsinki Steveco Oy Steveco Oy http://www.steveco.fi/en/Locations/Helsinki http://www.steveco.fi/en/Locations/Helsinki Multi-Link Terminals Ltd Oy www.mlt.fi Multi-Link Terminals Ltd Oy www.mlt.fi Hansa Terminal http://www.portofhelsinki.fi/passengers/hans a_terminal%20_vuosaari West Terminal http://www.portofhelsinki.fi/passengers/west_ terminal Katanjoka Terminal http://www.portofhelsinki.fi/passengers/kataja nokka_terminal Olympia Terminal http://www.portofhelsinki.fi/passengers/olymp ia_terminal Source: web sites of the port of Helsinki and terminals
Terminal
infrastructure Terminal →
and
Link Link Link -
Infrastructure - superstructure
characteristics↓
Finnsteve Oy AB Steveco Oy Multi Terminals Ltd Oy FinnsteveOy AB Steveco Oy Multi Terminals Ltd Oy Containers RoRo Draught m. 12,5 11 11 Berths - number Berths – length m 750 1 154 700 1 154 700 Ramps 4 10 4 2 Max vessel length m. Storage area open m² 14 000 Storage area TEU 2 500 1 600 1 336 1 600 1 336 Refer plugs 184 84 90 84 90 Storage area covered m² 50 000 Operational capacity TEU/y 400 000 Gantry cranes STS 4 3 1 3 Gantry cranes RTG Mobile cranes Source: web sites of the port of Helsinki and terminals Services and connectivity TERMINAL SHIPPING LINE
Finnsteve Oy AB Seago Line; Finnish Service; Tschudi Line Steveco Oy MA CGM; Hapag Lloyd; Team Lines; Unifeeder. Multi-Link Terminals Ltd Containerships; MSC. Container Oy Finnsteve Oy AB Finnlines Steveco Oy Multi-Link Terminals Ltd Eckeroe Line; Power Line. Oy
RoRo Hansa Terminal Eckeroe Line; Finnlines. (Vuosaari) West Terminal Eckeroe Line; St. Peter Line; Tallink/Silja. Page 32 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 PORT OF HELSINKI Katanjoka Terminal Viking Line Olympia Terminal Tallink/Silja Source: web sites of the port of Helsinki and terminals Logistics and The logistics area next to the Vuosaari Harbour houses logistics service providers, industry area enabling a flexible and fast movement of goods. The logistics area is meant for incoming and outgoing cargo loading and unloading, containerisation and re- containerisation, short-term storage and other similar logistics operations. Nurminen Logistics in the Vusaari harbour provides high-quality logistics services, such as railway transports, terminal services, forwarding, special and heavy transports and value added services. http://www.nurminenlogistics.com/en/Services/Terminal-Services/ Hinterland The brand new cargo harbour at Vuosaari in Helsinki has good connections to the access main road and rail network in Finland. It has also an important role as the bridgehead in Finland for trailer traffic to and from Continental Europe, the Baltic countries and Scandinavia. Development Harbours of the port of Helsinki are planned to be developed in following directions: plans Vuosaari: Cargo port and also for vessels carrying some passengers. Katajanokka: Passenger harbour for ferries carrying also some RoRo cargo. Also cruise ships less than 230 m. South Harbour: Passenger harbour for ferries carrying also some RoRo cargo. West Harbour: Passenger harbour for ferries carrying also RoRo cargo. Also cruise ships above 230 m.
2.1.3 Port of Klaipeda
Table 9 Port of Klaipeda fact sheet PORT OF KLAIPEDA Intermodal terminals Container handling Ro-Ro handling KLAIPEDA CONTAINER TERMINAL, UAB KLAIPEDA CONTAINER TERMINAL, UAB http://www.terminalas.lt/ http://www.terminalas.lt/ KLAIPEDOS SMELTE, JSSC SC Klaipėda Stevedoring Company http://www.smelte.lt/ (KLASCO) http://www.klasco.lt/ Source: web sites of the port of Klaipeda and terminals Terminal infrastructure Terminal → and
superstructure Infrastructure characteristics ↓
AIPEDA AIPEDA
KL CONTAINER TERMINAL, KLAIPEDOS SMELTE KLAIPEDA CONTAINER TERMINAL KLASCO CONTAINERS RoRo
Draught m. 9.9 11,5 8,5 8,5 Berths - number 2 8 1 3 Berths – length m. 540 554 400 900 Ramps 2 5 Max vessel length m. 215 260 200 230 Storage area open m² 4 000 95 000 Storage area TEU 12 000 10 000
Page 33 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 PORT OF KLAIPEDA Reefer plugs 250 144 100 Storage area covered m² 12 000 10 000 2 050 Operational capacity TEU/y 450 000 200 000 Gantry cranes STS 2STS Gantry cranes RTG 5 (40t.) Mobile cranes 1(104t.) 3(104t.) Source: web sites of the port of Klaipeda and terminals Services and connectivity TERMINAL SHIPPING LINE
KLAIPEDA CONTAINER Maersk Line; Unifeeder ;Team Lines; TERMINAL, UAB Containerships; CMA GM KLAIPEDOS SMELTE, MSC; Maersk Line; Hapag Lloyd; WEC Lines;
JSSC Hamburg Sued; Unifeeder; APL; Team Lines Container
KLAIPEDA CONTAINER RIX Baltic Line; KESS
TERMINAL, UAB
SC Klaipėda Stevedoring DFDS Seaways
RoRo Company (KLASCO) Source: web sites of the port of Klaipeda and terminals
Logistics and Baltic Logistics Center, owned by VPA logistics http://www.vpalogistics.eu/en is industry area multi-facility third party logistic and warehousing company, operating two logistic and warehousing sites adjacent to railway station "Draugyste".
The Klaipeda FEZ http://www.fez.lt. Within its 412 ha area, companies are provided with specific preferential economic and legal conditions for their production and warehousing operations. An engineering infrastructure has been created and continuously developed in the area in which more than 21.5 million EUR has been invested up to date from the European Union, national and private funds
Hinterland Intermodal terminals of the port of Klaipeda are served by Draugyste railway station, access consisting of 45 lines. Rail communication to the hinterland is performed mainly northwards (via Shiauliai). The road Southern bypass of the Klaipeda city is constructed and allows avoiding traffic from RoRo terminals and southern part of the port. Hinterland access is being performed via highway towards Vilnius – Belarus/Russia and well developed national road towards Shiauliai. Development Reconstruction of the Draugystes railway station: it is foreseen to construct and plans reconstruct 28.47 km of rail lines. The project will improve the infrastructure capacity for freight traffic, traffic safety and reduce traffic accidents. Number of trains, being served by the station will increase from 25 in 2013 to 35 in 2020. In addition, the installation of a connecting track towards Pagegiai direction, trains from the port of Klaipeda will have possibility to be diverted through southwards. Construction of passenger and cargo ferries terminal: JSC „Klaipeda passenger and cargo terminal “http://www.kkkt.lt/ plans to develop such terminal in the central part of Klaipeda Harbour. The current terminal takes up 7 hectares; the new one will take approximately 18 hectares. Length of the new quay will be 297.76 m; length of the pier -210/245 m. Depth at the new quay will be 10.0 m, depth at the pier - 12.5 m. Development of Public logistic centres: according to National logistics development plan, Public logistic centres will be developed in Klaipeda, Shiauliai,
Page 34 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 PORT OF KLAIPEDA Kaunas, and Vilnius.
2.1.4 Port of Liepaja
Table 10 Port of Liepaja fact sheet PORT OF LIEPAJA Intermodal Ro-Ro handling terminals LSEZ "TERRABALT" SIA http://www.terrabalt.lv/en/about Source: web sites of the port of Liepaja and terminals Terminal Terminal → LSEZ "TERRABALT" SIA infrastructure Infrastructure characteristics ↓ RoRo and Draught m. 8,6 superstructure Berths - number 1 Berths – length m. 210 Ramps 1 Storage area open m² 55 000 Storage area covered m² 2 040 Source: web sites of the port of Liepaja and terminals Services and TERMINAL SHIPPING LINE connectivity RoRo LSEZ "TERRABALT" SIA Stena Line
Source: web sites of the port of Liepaja and terminals
2.1.5 Port of Riga
Table 11 Port of Riga fact sheet PORT OF RIGA Intermodal terminals Container handling RoRo handling Baltic Container Terminal http://www.bct.lv Riga Passenger Terminal www.rigapt.lv Rigas universalais terminals „Termināls Vecmīlgrāvis” http://www.ruterminal.lv/ www.terminal.lv Source: web sites of the port of Riga and terminals Terminal
infrastructure Terminal →
and
superstructure Infrastructure characteristics↓
TESS TESS
- -
BalticContainer Terminal Rigas universalais terminals RigaContainer Terminal MAN RigaPassenger Terminal „Termināls Vecmīlgrāvis” MAN Containers RoRo Draught m. 11,7 9,3 10,5 9,05 7 9,5 9 Berths - number 2 1 Berths – length m 450 330 195 150 210 150 Ramps 2 1 1 Max vessel length m. Storage area open, thousand m² 68 15 20,6 Page 35 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 PORT OF RIGA Storage area TEU 5 500 2 500 Refer plugs 200 50 Storage area covered, thousand 13,5 20 0,3 0,9 m² Operational capacity TEU/y 350 000 100 000 50 000 Gantry cranes STS 3 2 Gantry cranes RMG 6 Mobile cranes 2 1 Source: web sites of the port of Riga and terminals Services and connectivity TERMINAL SHIPPING LINE Baltic Container Unifeeder ; Team Line; MSC; CMA-CGM; Terminal ESF
Riga Universal Terminal Containerships; Hapag Lloyd
Container
- Riga Passenger Tallink/Silja Ro Ro Terminal Source: web sites of the port of Riga and terminals Logistics and Parameters for planned logistics centre at ”National Container terminal”: industry area Total area 17,000 m2 (two class A cross-docking facility) Throughput capacity 416,000 tons per year Covered rail track 300 m
Storage capacity 18,000 pallets Hinterland Railways: Railway network provides possibility to ensure cargo traffic in three main access directions – on the right bank of the River Daugava with direction to Kundziņsala (Eksportosta) and Mangaļi (Sarkandaugava, Vecmīlgrāvis, Rīnūži) and on the left bank to Bolderāja, Daugavgrīva and Krievu Sala. Access railway branches on the port territory are owned by the VAS ”Latvijas dzelzceļš” (the Latvian Railway Company), FRA and enterprises, that ensure infrastructure maintenance. With the implementation of new development projects on Kundziņsala and Krievu sala, the load on these directions will considerably grow and therefore relevant railway infrastructure improvements will be necessary.
Motorways: Street network of the city in the framework of present boundaries ensures access to the port terminals. Still, cargo traffic by road to the north-eastern and north-western parts of the city, where the terminals of the Freeport of Riga are located, is rather complicated due to high traffic intensity and low throughput capacity of the streets. In the north-eastern part the traffic flows are impeded at railway crossings and at bridges over the River Daugava. Street and road structure in the port is comprised of the city streets, the roads of the FRA and enterprises. The Freeport of Riga owns three motorways: access road to the Eastern pier, road in Rīnūži from approach to the berth ZO-14 and a road from Sarkandaugava bridge up to the SIA ”Baltic Container Terminal”. FRA has built parking areas near the State Revenue Service Customs control point as well as near territories of some terminals to make cargo traffic by road more efficient. Development Freeport of Riga Development Programme (2010-2018) foresees following main plans development projects: Development of Krievu Sala is the largest infrastructure object in the Freeport of Riga and its total costs can be estimated in the amount of more than 111 million lats. In total, 65 ha will be uptaken, a 1780 m long quay will be built envisaged for the
Page 36 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 PORT OF RIGA needs of 7 berths. Krievu Sala is mainly envisaged for development of bulk cargo and general cargo terminals. Project Reconstruction of stations of Riga railway network and connecting railway track envisaged for servicing of the Freeport of Riga. Development of access infrastructure of the port comprises also improvements of mutual connection of railway, motorways and waterways. In order to solve accessibility in Kundziņsala, a project for construction of a new railway bridge and improvement of connected infrastructure has been elaborated, planned to be implemented from 2009 until 2013. National container terminal project, that will be developed in four stages, including construction of new berths, enforcement of the bank, improvement of cargo places, construction of offices and warehouses, establishment of communications, improvement of motorways and railway (to be finished in 2021). Project Reconstruction of Access Channel for Ships Entrance into the Port envisages deepening of the fairway up to 17 meters in section until Rīnūži, which will ensure entrance of Aframax class ships. Reconstruction of East and West breakwaters is also planned. Currently, technical project of renewal has been elaborated, but the actual works are planned to take place in time period from 2012 until 2015. Construction of a new cruise ship and RoPax terminal in the Export port. It is planned to be finished until 2017, and total costs are estimated to 35 million lats
2.1.6 Great port of St. Petersburg
Table 12 Great port of St.Petersburg fact sheet GREAT PORT OF ST. PETERSBURG Location of Administration of the Great Port of St. Petersburg is responsible for ports of St. harbours Petersburg, Primorsk, Ustj-Luga, Vyborg, Vysotsk, passenger port (see below).
Source: Centre For Maritime Studies University Of Turku Development of Russian Ports in the Gulf Of Finland.
Page 37 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 GREAT PORT OF ST. PETERSBURG Intermodal terminals Container handling Ro-Ro handling First Container Terminal First Stevedoring Company http://www.container.ru/en/terminals/spb http://www.en.seaport.spb.ru/about/structure/13 CJSC “Container Terminal Saint-Petersburg” Morskoy Vokzal http://www.mvokzal.ru/ http://www.seaport.spb.ru/about/structure/3 Petrolesport OJSC Container Terminal Petrolesport OJSC Ro-Ro Terminal http://www.petrolesport.ru/eng/terminal.php#pag http://www.petrolesport.ru/eng/terminal.php#pag e2 e3 Moby Dik YUG-2 (Ustj Luga) http://www.port- http://www.moby-dik.ru/eng/ ustluga.ru/en/ Severstal Neva – Metal Auto-Railway Ferry Terminal(Ustj-Luga) http://www.severstal.com/eng/businesses/russia http://www.port-ustluga.ru/en/ n_steel/services/neva_metall/ Ust-Luga Container Terminal http://www.container.ru/en/terminals/ustluga/ Rusmarine-Forwarding Northern Shipyard terminal http://www.forwarding.ru/Content/Services/Term inal/Terminal_SV.aspx Source: web sites of the Great port of St. Petersburg and terminals Terminal infrastructure Container terminals: and superstructure Terminal →
Metal Metal
Infrastructure –
characteristics ↓ -
Forwarding
-
Luga Container Luga Container
-
First Container Terminal Terminal First Container “Container CJSC Saint Terminal Petersburg” OJSC Petrolesport Terminal Container MobyDick Neva Severstal Ustj Terminal Rusmarine Shipyard Northern terminal Draught m. 10,3 9,8 9,8 8,9 11 12,3 x Berths - number 5 2 Berths – length m 780 666 983 321 738 440 Ramps Max vessel length m. Storage area open m² 345 000 60 560 Storage area TEU 31 000 14 364 7 500 2 000 15 000 Refer plugs 2 900 1 150 3 630 540 840 Storage area covered m² 11 440 Gantry cranes STS 8 4 7 1 Gantry cranes RTG 22 10 5 Mobile cranes 1 7 3 Source: web sites of the Great port of St. Petersburg and terminals
RoRo terminals:
-
Terminal →
Luga) Luga)
2
-
- -
Infrastructure Luga) -
characteristics ↓
First Stevedorin g Company Morskoy Vokzal Petrolespor Ro OJSC t Ro Terminal YUG (Ustj Auto Railway Ferry Terminal(U stj Draught m. 8 8 11,5 Berths - number 18 5 2 Berths – length m 3 000 720 903 Ramps x 2 Max vessel length m. Storage area open m² 160 70
Page 38 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 GREAT PORT OF ST. PETERSBURG 000 000 Storage area TEU 65 000 Refer plugs Storage area covered m² 3 500 4 000 Operational capacity TEU/y Gantry cranes STS Gantry cranes RTG Mobile cranes Source: web sites of the Great port of St. Petersburg and terminals Services and connectivity TERMINAL SHIPPING LINE First Container Terminal Maersk Line, MSC, CMA CGM, OOCL, APL, Unifeeder, Team Lines, FESCO ESF, Swan CL; Delta Shipping Lines; Hapag Lloyd; SCA Transforms; Seago Line; CJSC “Container Delta Shipping Lines; MSC; SCA Transforms; Terminal Saint- Sea Connect; Unifeeder. Petersburg”
Petrolesport OJSC APL; CMA CGM; Delta Marine Limited; Container Terminal Evergreen Marine; Fresco; ESF; Maersk; MSC; OOCL; Samskip; Sea Connect; Swan CL; Team Lines; Unifeeder; W.E.C Lines b.v.; Container X-Press; Hapag Lloyd; Seago Line; Merilinija. Moby Dik Hyundai Merchant Marine; Maersk Line; Unifeeder; Delta Shipping Lines; Containerships. Severstal Neva – Metal Sea Connect; Merilinija.
Ustj-Luga Container Unifeeder; CMA CGM; Terminal First Stevedoring Finnlines; Company Morskoy Vokzal St. Peter Line Petrolesport OJSC Ro-Ro KESS; TRANSFENNICA; NEVA BRIDG;
Terminal WALLENIUS WILHELMSEN LOGISTIC RoRo YUG-2 (Ustj-Luga) Finnlines; KESS; UECC.
Auto-Railway Ferry DFDS Seaways Terminal(Ustj-Luga) Source: web sites of the Great port of St. Petersburg and terminals Logistics and Logistika-Terminal (LT) is an off-dock container facility of St. Petersburg port. LT industry area infrastructure includes container terminal, empty container depot, container freight station (CFS), vast warehousing and distribution facilities, convenient motor/railroad approach. LT is the first Russia’s terminal to start operating as “dry port”. Dry port technology gives possibility to transport containers from the sea terminal (FCT) to the off-dock facility in Shushary (LT) in bond under the simplified scheme of customs control for further customs clearance, storage and distribution. This technology increases FCT’s yard capacity and gives our customers the possibility of taking full advantage of high- quality logistic services at the off-dock terminal.
Page 39 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 GREAT PORT OF ST. PETERSBURG Conceptually dry port LT serves for container terminals are located in both Ustj-Luga and St. Petersburg. Key Figures of the Shushary dry port: Total area - 92 ha RTG technology FCT-LT integrated IT system Storage capacity – 10,000 TEU laden and 4,500 TEU empty containers Rail facilities: 2 rail tracks with total length of 1757 m for container block trains and 1 rail track 422 m long with covered platform for 10 container cars Throughput capacity – 200,000 TEU per year Distance to First Container Terminal – 17 km Distance to Ustj-Luga Container Terminal - 161 km Distance to Moscow - 620 km Hinterland The road network, serving the Great port of St. Petersburg (incl. Ustj-Luga) has the access highest traffic volumes in the St. Petersburg area. The new Ring Road of St. Petersburg (138 km.) was built recently. Also there is an ongoing upgrade and reconstruction of the motorway Moscow- St. Petersburg. Rail connection to Moscow needs upgrading due to high intensity of the passenger traffic. Development Ustj-Luga Container Terminal ULCT is the first Russia’s container terminal plans developed in the deep sea port that has unique advantages as compared to the other terminals of the North-West Russia. ULCT is located outside the urban area so that the terminal’s operation and development are not restricted by the infrastructure and ecological factors. ULCT will be developed in three phases. The terminal's first phase was put into operation in 2011. ULCT will reach its ultimate capacity of 3M TEU by 2025 and will become the largest and the most technologically advanced facility in Russia and Eastern Europe. ULCT's development will provide the handling capacity essential for supporting the growth of Russian foreign trade and decrease the dependence of Russian consignees on the ports of Finland and the Baltic states. ULCT is managed by NCC and EUROGATE, Europe´s leading container terminal and logistics group. Key figures of ULCT
1st Phase 2nd Phase Total area, ha 40 140 Quay length, m 440 1700 Depth alongside, m 13,5 16 Storage capacity, TEU 15000 78700 Reefer plugs, TEU 840 6000 Throughput capacity, TEU 440 000 2 850 000 Source: web site of the ULCT ULCT key advantages as compared to St. Petersburg port: Terminal’s performance and development are not restricted by factors of the urban infrastructure and ecology. Ice conditions are softer, ice period is shorter by approximately 2 months; The voyage time between main ports of trans-shipment in Northern Europe and Ustj-Luga is shorter by 24-48 hours; Separate ways for inbound and outbound traffic; No waiting time for container vessels due to priority for passenger ships and tankers. First Container Terminal’s (FCT) Investment Program envisages further growth of throughput capacity up to 1.6M by 2014. The capacity increase will be achieved by Page 40 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 GREAT PORT OF ST. PETERSBURG means of partial replacement of straddle carrier based handling system with an RTG/TT technology which will eventually pay off in higher density of storage per ground slot. Another key element of the terminal’s expansion program is continual procurement of more productive and modern STS cranes, aimed to enhance berth productivity. MOBY DIK Co. Ltd has a program of development which is aimed at enlarging storage area capacity; purchasing new equipment, and the reconstruction of available storage areas. Multipurpose Terminal YUG-2 develops rapidly. Completion of the terminal construction will fundamentally change the established logistic schemes of cargo delivery. Warehouse Logistics Centre will be built in the south port area. It will be a Russia's only logistics centre, located in the port area. This will offer our customers a unique service for Russia.
2.1.7 Port of Tallinn
Table 13 Port of Tallinn fact sheet PORT OF TALLINN Location of harbours
Note: Three harbours of the port of Tallinn are handling cargo: Muuga harbour, Palddiski harbour and Old City harbour (only RoRo cargo) Intermodal terminals Container handling Ro-Ro handling AS Muuga CT http://www.muuga- AS Muuga CT http://www.muuga- ct.com/index_eng.html ct.com/index_eng.html ESTEVE Terminal AS ESTEVE Stevedoring OÜ (Old City http://www.esteve.ee/terminal_eng.html harbour) http://www.esteve.ee/stevedoring_eng.h tml HTG Invest AS http://htg.tallink.com/en/default.htm ESTEVE Terminal AS (Paldiski) http://www.esteve.ee/terminal_eng.html Source: web sites of the port of Tallinn and terminals
Page 41 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 PORT OF TALLINN Terminal
infrastructure Terminal → and
Infrastructure characteristics superstructure
↓
AS Muuga AS CT ESTEVE TerminalAS Muuga AS CT City Old harbour ESTEVE Terminal AS (Paldiski) Containers RoRo Draught m. 10,5 10,5 9,5 9,5 11,5 Berths - number 3 3 23 4 Berths – length m 600 4 200 Ramps 3 4 Max vessel length m. 320 Storage area open m² 240 000 95 000 240 000 Storage area TEU Refer plugs 374 374 Storage area covered m² 148 000 10 400 148 000 Operational capacity TEU/y 450 000 Gantry cranes STS 3 Gantry cranes RTG 5 Mobile cranes 1 5 Source: web sites of the port of Tallinn and terminals
Services and connectivity TERMINAL SHIPPING LINE
AS Muuga CT APL; Hapag Lloyd; MSC; Sea Connect; Team Lines; Unifeeder; CMA CGM; Seago Line:
Tschudi Lines. Container
ESTEVE Stevedoring OÜ Baltic Line; Mann Lines; Spliethoff; Tallink;
(Paldiski) Transfenica Terminal A AS Muuga CT Eckeroe Line; St. Peter Line.
RoRo (Old City Harbour) Terminal D (Old City Tallink/ Silja harbour) Source: web sites of the port of Tallinn and terminals Logistics and Muuga Industrial Park (located at Muuga Harbour) - the largest and deepest cargo industry area harbour in Estonia. The total area of the industrial park is 75 ha. The port has prepared approximately 50 ha of plots with the size of 0.3-21 ha for its potential clients. Plot borders and size can be changed according to the need of operators. Paldiski South Harbour Industrial Park (located 45 km west of Tallinn, the capital of Estonia) - the total area of the industrial park is 21 ha. With direct connection to many Western European ports, Paldiski South Harbour has become an important stop for the Baltic Sea Ro-Ro shipping lines. This generates excellent possibilities for the future clients of the industrial park to transport the production raw material promptly and safely. Hinterland Hinterland access options to the harbours of the port of Tallinn are presented in access following map.
Page 42 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 PORT OF TALLINN
Development The development plans of the Port of Tallinn envisage the Old City Harbour being plans converted fully into a passenger port and therefore the cargo handling has been gradually moved out from the Old City Harbour and relocated into the Muuga and Paldiski South Harbours. As of today, the Old City Harbour terminals are handling predominantly Ro-Ro cargo (rolling stock) and to an extent also some break bulk cargo. Significant part of the investments of the Port of Tallinn is also directed towards the development of the Paldiski South Harbour, Muuga Harbour adjacent land units.
2.1.8 Port of Ventspils
Table 14 Port of Ventspils fact sheet PORT OF VENTSPILS Intermodal Container handling Ro-Ro handling terminals SIA Noord Natie Ventspils Terminals SIA Noord Natie Ventspils Terminals www.nnvt.lv www.nnvt.lv Source: web sites of the port of Ventspils and terminals
Terminal infrastructure Terminal →
and Infrastructure characteristics ↓ NNVT superstructure NNVT Containers RoRo Draught m. 13.2 13.2 Berths - number 3 2 Berths – length m Total of 1000 Ramps 2 Storage area open m² 120 000 Refer plugs 100 Storage area covered m² 5 200 Operational capacity TEU/y 150 000 Gantry cranes STS 1 Gantry cranes RTG Mobile cranes 2 Source: web sites of the port of Ventspils and terminals
Page 43 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 PORT OF VENTSPILS Services and connectivity TERMINAL SHIPPING LINE Container: No lines calling the terminal recently
RoRo: SIA Noord Natie Stena Line Ventspils Terminals Finnlines Source: web sites of the port of Ventspils and terminals Logistics and Territories available: The Ventspils Freeport Authority has set aside more than industry area 1,000 hectares of land for industrial projects. Lots are available at sizes from 1 to 200 hectares, are prepared for construction and can be expanded if necessary; they have all of the necessary utility connections. Free zone status: Latvia has had four special economic zones since 1997, and the Ventspils Freeport is one of them. Companies in the zone have no restrictions in terms of general rules that are applicable in Latvia. They can be licensed to operate under free zone status and enjoy tax advantages that are available to companies at Freeport and special economic zones (direct and indirect tax rebates - there are considerable tax reductions for indirect taxes such as the value added tax, the excise tax, and customs duties). Hinterland Railways: The East-West railway corridor to Ventspils is one of the most highly access utilised links of its type in Eastern Europe. More than 21 million tonnes of cargo are transported via the route each year. With co-financing from the EIB and EBRD, Latvian Railways has improved the capacity of the East-West railway corridor so as to secure output of 34 million tonnes per year.
Roads: Ventspils offers convenient road connections, including a major highway to the Latvian capital of Riga, which is located 189 kilometres from Ventspils. There is also the European-level two-tract E-22 road (Britain-Netherlands-Germany-Sweden (Norköping)-Ventspils-Russia), which enables efficient further distribution from Ventspils on to Riga, the other Baltic States, Russia, and other countries in the CIS Development The development programme for the Free Port of Ventspils foresees two important plans actions: Expansion of the port between the traffic and the railroad bridge, with the construction of new dry cargo terminal and two universal terminals;
Expansion of the Northern port seawards north of the Venta river mouth, thus creating opportunities for new terminals to develop their businesses.
2.2 Road infrastructure This chapter delineates road networks of Lithuania, Latvia, Estonia, Finland and area, related to the Great port of St. Petersburg. TEN-T 2020 network is used for illustration of the future network.
Page 44 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 2.2.1 Lithuania
Table 15 Road infrastructure in Lithuania ROADS IN LITHUANIA
Current There are 6.32 km of roads per 1,000 of population in Lithuania and 326.50 km of situation state roads per 1,000 sq. km of its territory. The majority of our roads (62.01%) have asphalt pavement. 6 European motorways are crossing the country (figure below): E67 Via Baltica: Helsinki–Tallinn–Riga–Panevezys–Kaunas–Warsaw– Wroclaw–Prague, E28: Berlin–Gdansk–Kaliningrad–Marijampole–Prienai– Vilnius–Minsk, E77: Pskov–Riga–Siauliai–Kaliningrad–Warsaw–Krakow–Budapest, E85: Klaipeda–Kaunas–Vilnius–Lida–Cernovcy–Bucharest–Alexandroupoli, E262: Kaunas–Utena–Daugavpils–Rezekne–Ostrov, E272: Klaipeda–Palanga–Siauliai–Panevezys–Vilnius. Current road network in Lithuania is well developed. Terminals of the port of Klaipeda are connected by highway with Belarusian border (the border crossing points Medininkai). In north- south direction Via-Baltica road connects Poland and Central Europe with Latvia, Estonia, and Finland. The entire length of the road Klaipeda-Kaunas-Vilnius-Belarus border is a motorway. The exception is in Vilnius, where the southern bypass road is under construction. Major investment projects in Lithuanian include upgrading of the road in the corridor Current road network in Lithuania
Source: Lithuanian Ministry of transport and communications. Future Future road network in Lithuania. No significant changes are foreseen. Investments development will be concentrated on further upgrade of the Via Baltica road and maintenance of existing network.
2.2.2 Latvia
Table 16 Road infrastructure in Latvia ROADS IN LATVIA
Current Latvia has a quite dense network of roads. In 2005 there were 6,962 km of highways situation (main roads (A) and 1st class roads (P)), 13,264 km of secondary roads, and 31.500 km of municipal roads in Latvia. Existing E 22 road connects Latvia with Russia, more particularly Riga and Ventspils with Moscow. The road corridor comprises three Latvian national roads: A10 (Ventspils-Riga), A6 (Riga-Jekabpils), and A 12 (Jekabpils-Rezekne/Terehova at the Page 45 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 ROADS IN LATVIA
Russian border). In Riga the route runs along the Riga southern bypass. For most of its length the road is a high quality 2-lane road. There is a motorway (4- lane) in the section east of Riga (47 km). Traffic from Ventspils to the Riga suburbs is close to 6000 vehicles per day (13% HGV). In the bypass of Riga the existing traffic exceeds 10 000 vehicles per day. Existing traffic in the border stretch (Jekabpils - Russian border) is low, a little above 2 000 vehicles per day, but the share of HGVs is quite high (23% to 31%). Traffic growth is strong. The forecast for 2025 expects nearly tripling of traffic flow in most of the road corridor, which makes the roads in the Riga area as bottlenecks. Current road network in Latvia
Source: Latvian State Roads Future A Key priority lies with further developing the Via Baltica and East-West road-corridors development and improvement of their quality standards, including improvement of the traffic situation in the city of Riga (finalisation of all construction stages in a new Daugava river crossing). In addition, rural roads have to be better maintained and reconstruction should be launched in the upcoming years. The plans call for upgrading some road sections by 2015: approaches to Ventspils and the Koknese-Jekabpils section of road.
2.2.3 Estonia
Table 17 Road infrastructure in Estonia ROADS IN ESTONIA
Current The length of national roads as of January 1, 2012 is 16 443 kilometres, i.e. 28.1% of situation the total length of the Estonian road network, which is 58 487 kilometres. the length of E-road in Estonia is 995 km. Despite the lack of motorways in Estonia, the country is well covered with the road network. Generally speaking the length of the road network and its reach is adequate, but the quality of the road network is not. Especially rural and secondary roads and some access roads are in need of maintenance and upgrading.
Page 46 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 ROADS IN ESTONIA
Current road network in Estonia
Source: Estonian Road Administration Future Future investments are mainly concentrated on upgrade and maintenance of existing development network.
2.2.4 Finland
Table 18 Road infrastructure in Finland ROADS IN FINLAND
Current Current road network of Finland situation
Page 47 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 ROADS IN FINLAND
The E18 road between Helsinki – Vaalimaa is the main road connecting Southern Finland (Helsinki) with Russia (St. Petersburg and Moscow). The route has varying standards: the sections Helsinki –Porvoo - Koskenkylä and Kotka – Hamina are 4- lane motorways and the sections Koskenkylä – Kotka and Hamina – Vaalimaa are ordinary roads. In Hamina, the E18 traffic uses the street network through the town. The biggest traffic volumes are in the western end of the road section, close to Helsinki region, about 24 000 vehicles / day. Volumes lessen closer to the border and the number of vehicles crossing the border is about 5 000. Future E18 is part of TEN priory project Nordic Triangle, and plans call for building it into a development motorway by the year 2015. The motorway construction consists of three projects, which started in the year 2011. The total cost of these projects is 560 million Euros.
2.2.5 Russia
Table 19 Road infrastructure in Russia ROADS IN RUSSIA
Current The road network, serving the Great port of St. Petersburg (incl. Ustj-Luga) is situation demonstrated in figure below. Roads around Great port of St. Petersburg
Russian part of E-20 road Estonian border (Ivangorod) St. Petersburg is an ordinary road. The most critical is the middle section (km 60 to km 138) of which 28,2% is located in built-up areas. That issue is causing both safety and environmental risks. As built up areas have speed limits, it will has economical impact too. According to recent information, there are problems with the bridge over the Narva River. The Estonian and Russian border is on the middle of the Narva River bridge. Views of both sides on the technical condition of this bridge differ. At the moment, no significant measures to rehabilitate the situation are planned on the Russian side. The road has possible weight limits for HGV from km 60 till 149 in springtime. The new Ring Road of St. Petersburg is has length of 138 km. Future The main investments are the start of construction of the motorway Moscow- St. development Petersburg, and upgrading of the existing road. Smaller investments take place between Finnish border-Vyborg. Investments are planned for upgrading the road connection to the Port of Ustj-Luga.
Page 48 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013
2.3 Rail infrastructure This chapter delineates road networks of Lithuania, Latvia, Estonia, Finland and area, related to the Great port of St. Petersburg. TEN-T 2020 network is used for illustration of the future network.
2.3.1 Lithuania
Table 20 Rail infrastructure in Lithuania RAIL IN LITHUANIA
Current The Lithuanian rail network density is close to 27km/1000km². It consists of 2,042 situation route-km, of which 557 route-km are double tracked. Most sections of the existing rail network are not interoperable with Western European as most existing rail tracks are of Russian standard gauge. Only 7% of network is electrified. Traffic speeds are low. For instance, on some sections near the Lithuanian/Polish border, speed is limited to 40—60 km/h. The combination of dirty ballast and cessation of track renewal and maintenance, due to shortage of steel track components from Russia, is expected to lead to serious track deterioration. The railway is Lithuania’s main rail line connecting the eastern and western parts of the country, more particularly Vilnius with the port of Klaipeda. The railway is also an important transit branch for Belarus and Russia (Moscow). In addition, the railway serves as a connection between the Baltic and Black Seas. The railway has a fairly high freight volume, which is forecast to increase with time. Major investment projects in Lithuanian include upgrading of the road in the corridor Current rail network in Lithuania
Source: Lithuanian Railways
Page 49 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 RAIL IN LITHUANIA
Future Railway transport is in a stage of development: TEN-T project with high priority, the development construction of Rail Baltica railway line is being implemented and electrification of the network is planned for the near future.
2.3.2 Latvia
Table 21 Rail infrastructure in Latvia RAIL IN LATVIA
Current The railway network is oriented at freight traffic along major transit cargo corridors that situation mainly run in east – west direction from the Russian hinterland to the three major ports at the Baltic Sea. Currently, Latvia is also involved in priority project number 27: ‘Rail Baltica’ axis Warsaw-Kaunas-Riga-Tallinn-Helsinki. The majority of the network consists of single track (incl. broad gauge). About 11% of the network ( some 257 km of the lines) is electrified. The majority of these lines are located in the vicinity of Riga and mainly used for passenger transport. The Ventspils-Riga-Zilupe (Russian border) railway corridor has two routes: a freight route to Ventspils via Jelgava (456 km) and passenger/freight route via Riga (424 km). It is the main railway line from Latvia, particularly the seaports, to Moscow. Railway has 2 tracks for most of its length. In the last 150 km towards the Russian border, the railway has only a single track. Train controls are compatible with those of the Russian railways (RZD). The railway is built for heavy trains (5 500 tons). The railway corridor has heavy freight traffic to the ports of Riga and Ventspils – about 25 freight trains per day. The sections leading from west and east to Riga have high passenger train volumes. At present, transit traffic is 85% of the total railway freight traffic in Latvia, mainly from Russia and Belarus to the ports of Latvia. Current rail network in Latvia
Page 50 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 RAIL IN LATVIA
Source: Latvian Railway (LDz) Future The objective of the Latvian railway development policy is the comprehensive development modernization and development of the Latvian railway-sector, in order to achieve successful integration into the European railway transport system as well as successful operation within market economy conditions. Considerable investments are planned covering almost the entire railway corridor. Including construction of a second track in many sections, electrification of the line and provision of GSM-R service throughout the Latvian section of the railway.
2.3.3 Estonia
Table 22 Rail infrastructure in Estonia RAIL IN ESTONIA
Current The total length of the Estonian railway network is 1026 km, from which the length of situation operated railway tracks is 968 km. The railway is structurally of high quality with its 32 ton allowable axle weight and 5 500 ton train weight. Nearly half of the railway length has 2 tracks. Trains are diesel driven. There are electrical commuter trains near Tallinn. Current rail network in Estonia
Source: Estonian Railways Future The only capacity improvement project is double-tracking the railway leading to development Muuga Port by 2015.
Page 51 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 2.3.4 Finland
Table 23 Rail infrastructure in Finland RAIL IN FINLAND
Current Track gauge of the Finnish railways is principally that of Russia. Other characteristics situation of the Finnish railways differ from those of Russia, such as traction power, signalling and rolling stock standards. The gauge difference is at the border with Sweden, where the European standard gauge is used. The Helsinki-Vainikkala railway corridor is the main railway connection between Finland and Russia. It consists of two parts, of which the first is the main railway connection from Helsinki to the eastern border (Helsinki – Kerava - Lahti – Kouvola – Luumäki – Vainikkala) and the second is railway connection to the ports of Kotka and Hamina (Kotka – Kouvola) on the Gulf of Finland. The railway section Helsinki – Kerava is a conventional rail line. The Kerava – Lahti direct line is designed for high-speed trains. Lahti – Kouvola – Luumäki is an old railway line which needs upgrading. The rail section Luumäki – Vainikkala border station at the Russian border has only one track. Current rail network in Finland
Future Upgrading of the rail sections Lahti – Luumäkii and construction of the second track development from Luumäki to Vainikkala border station is being performed. No structural changes in Southern Finland are foreseen.
2.3.5 Russia
Table 24 Rail infrastructure in Russia RAIL IN RUSSIA
Current Estonian border (Ivangorod)-St. Petersburg (Gatchina) railway is a traditional route for situation the Russian exports. Even though the railway is diesel driven it has a high capacity and does not have any major obstacles. Recently an essential decrease of rail freight transport from Russia to Estonia is forecasted. The Russian Transportation Strategy (Ministry of Transport) forecast for
Page 52 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 RAIL IN RUSSIA
2030 3 passenger and 8 freight trains. No investments have been planned to develop this rail branch in sections leading to Estonia. At the same time, there is foreseen an essential increase of freight volume in the section Gatchina –Veimarn due to the development of Port of Ustj-Luga. Finnish border (Buslovskaya)-Vyborg- St. Petersburg is a conventional railway, which has single-track sections. Freight train traffic is quite high (41- 50% from the total). In the future, it is planned to redirect most of the freight traffic to the parallel route. The section St. Petersburg – Vyborg has heavy freight flows, up to 55,4 million tonnes. Finnish border (Kivijärvi)-Petrozavodsk- St. Petersburg branch can be divided from the point of view of technical standards and traffic volumes into two different sections: the section Finnish border-Ledmozero (low traffic and freight volume, a single track, diesel-driven with a semi-automatic train traffic control system, maximum speed is 80 km /h.); and the section on the Murmansk route (Lietmajärvi – Volhovstroj) (has both freight and passenger traffic, fully electrified and is under the centralised train control system; the allowed speed is 100 km/h).
Rail connections in Great port of St. Petersburg area
Source: Russian Railways Future Main investments are diverted towards the development of the high-speed rail traffic. development Passenger trains will be able to run at 160 km/h between St. Petersburg and the Finnish border, and up to 300-350 km/h between St. Petersburg-Moscow, when the freight trains will be been to the new parallel routes.
Additional investments include upgrading of three stations and marshalling yards (Kivijarvi, Volhovstroi, Babajevo) by 2015 (Finnish border (Kivijärvi)-Petrozavodsk- St. Petersburg branch).
Page 53 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013
2.4 Intermodal transfer points in the hinterland of ACL ports This chapter is dedicated to two kind of intermodal transfer points in the hinterland of ACL ports: (1) intermodal terminals where intermodal transport units (ITU - containers or semitrailers) may be transferred from one transport mode to another; and (2) logistic centres.
Only three Baltic countries (Estonia, Latvia, and Lithuania) are covered in this chapter.
2.4.1 Intermodal terminals Only those intermodal terminals included into amendment 8 to the Agreement on International Goods Transport by Rail of the Organisation for Co-operation between Railways (OSJD) are considered outside the ports.
Table 25 Intermodal terminals in Estonia, Latvia and Lithuania INTERMODAL TERMINALS
Estonia There are 7 terminals in national rail network that are able to perform transfer of ITU. ESTONIA - list of container terminals in national network of rail stations Rail terminal/station Container size Max Notes (foots) mass Public On (gross terminal access tonnes) road Vaivara 20;40 30,0 Maardu 20;40 30,0 Muuga 20;40 34,0 Narva 20;40 30,0 Paldisski 20;40 30,0 Rapla 20;40 30,0 Ulemiste 20;40 30,0 Source: OSJD Latvia There is 21 terminal in national rail network that is able to perform transfer of ITU (14 of them are in the capital city Riga) LATVIA- list of container terminals in national network of rail stations
Rail terminal/station Container size (foots) Max Notes mass Public On (gross terminal access tonnes) road Bolderaja 20 Ventspils 20;40;45 Griva 20;40 Daugavpils 20;40 Zasulauks 20 Zemitani 20;40 Ziemelblazma 20 Krievupe 20;40 Krustpils 20;40 Lachupe (Riga) 20;40
Page 54 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 INTERMODAL TERMINALS
Liepaja- Pasazieru 20;40;45 Mangali 20;40;45 Olaine 20 Rezekne II 20 Riga- Krasta 20;40;45 Riga-Prechu 20 20 25,0 Saurneshi 20;40 Sloka 40 Torniakalns 20;40 Shkirotava 20;40 Jaunkalsnava 20;40 Source: OSJD Lithuania There are 6 intermodal terminals in national rail network that are able to perform transfer of ITU. LITHUANIA- list of container terminals in national network of rail stations Rail terminal/station Container size (foots) Max Notes mass Public On (gross terminal access tonnes) road Draugyste 20;40 45,0 Port of Klaipeda (Klaipeda) JSC “Klaipedos terminalo grupe” Kaunas 20;40 30,5 (Palemonas) Klaipeda 20 20;40 20,0 Paneriai (Vilnius) 20;40 30,5 Rimkai 20 30,0 JSC NEO GRoup
Sheshtokai 20;40 32,0 (Mockava) Source: OSJD
All those terminals were constructed two or more decades ago. They have very simple equipment (gantry cranes with mainly 20 or 40 tones capacity), delivering relatively slow shifting process. To meet future logistics demand those capacities need to be modernised either installing modern shifting technologies or building them inside new logistic centres.
Good example of modernisation could be seen in the Mockava intermodal terminal close to the Lithuanian – Polish border, which foresees the brand modern Cargo-Beamer technology, providing full shift of the intermodal train (unloading and loading) in 15 minutes (see Figure below). Construction of this terminal is being started by Lithuanian concern Achema.
Page 55 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Figure 9: Schematic future intermodal operation at the Mockava terminal
Source: Mockava terminal
2.4.2 Logistic capacities The Interreg IIIB project “Networking logistics centres in the Baltic Sea region” (NELoC) have determined logistic centres as areas within which all activities relating to transport, logistics and the distribution of goods - both for national and international transit - are carried out by various operators on a commercial basis.
The operators can either be owners or tenants of buildings and facilities (warehouses, distribution centres, storage areas, offices, truck services, etc.), which have been built there. In order to comply with free competition rules, a Logistics Centre must be open to allow access to all companies involved in the activities set out above.
A Logistics Centre must also be equipped with all the public facilities to carry out the above- mentioned operations. If possible, it should include public services for the staff and equipment of the users. In order to encourage intermodal transport for the handling of goods, a Logistics Centre should preferably be served by a multiplicity of transport modes (road, rail, deep sea, inland waterway, air).
To ensure synergy and commercial cooperation, it is important that a Logistics Centre is managed in a single and neutral legal body (preferably by a Public-Private-Partnership). Finally, a Logistics Centre must comply with European standards and quality performance to provide the framework for commercial and sustainable transport solutions.
The NeLoC project identified network of logistic centres (figure below), potentially being planned to build in near future. Until recent day no such centres are operational in three Baltic States.
Page 56 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Figure 10: Existing and planned logistics centres of possible locations for new logistics centres and TEN and TINA networks in the Northern and Eastern Baltic Sea region
Source: NeLoC project final report 2004
Page 57 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Table 26 Logistic centres in Estonia, Latvia and Lithuania LOGISTIC CENTERS Estonia Riigiressursside Keskus OÜ (State Resources Centre Ltd) http://www.rrk.ee/ is an enterprise privatized in 1999 and based 100% on private capital. The main activities of RRK are the development of logistics parks, letting of warehouse and production premises an provision of warehouse services. The trade mark RRK incorporates seven logistics parks located in Tallinn, in Maardu at the Vana-Narva Road, in Paldiski, Tapa, Muuga, Paide and Narva. State Resources Centre Ltd. is the biggest in its field in Estonia: the total area of logistics parks developed by the enterprise is 1.2 million sqm, the area of completed warehouse and production premises amounts to 160 thousand sqm and at least the same area is in the development stage. Logistic parks in Estonia
Source: Riigiressursside Keskus OÜ Latvia Potential locations of logistic centres were delineated by “Logistics centres development: case study of Latvia“. Potential location of those centres is presented in a figure below. Potential locations of logistic centres in Latvia
Source: Logistics centres development: case study of Latvia (by Transport and Telecommunication Institute, Riga) Page 58 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 LOGISTIC CENTERS Lithuania According to National logistics development plan, Public logistic centres will be developed in Klaipeda, Shiauliai, Kaunas, Vilnius (a map below). Development of logistic centres in Lithuania
Source: Lithuanian ministry of transport and communications 2012
Summarising the current situation - a weak point in competitiveness of the ACL intermodal range remains lack of logistic infrastructure in the hinterland of the ports (logistic centres, dry ports, intermodal terminals etc.).
Although Baltic countries have general concept of location of logistic centres, the implementation process is still very slow. One of reasons is a lack of financial sources.
Lithuanian government appointed state-owned company “Lithuanian Railways” as responsible body for development of logistic centres in Klaipeda, Kaunas and Vilnius and planning procedures are started.
Use of best practices outside the area could fasten creation of the regional network of logistic centres. Particularly, very noticeable is German practice of cooperation of stakeholders in frame of the Deutsche GVZ-Gesellschaft mbH (DGG http://www.gvz-org.de/index.php?id=33&L=1), which supports the cooperation of German Freight Villages (GVZ). Significant initiatives in creation of Freight Villages there belong to regional and local authorities, who developed most of the GVZ project using Public-Private Partnership approach.
Page 59 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 2.5 EU-CIS border crossing points Border crossing points (BCP) is important part of the port hinterland network. 12 BCPs are functioning between ACL EU countries and eastern neighbourhoods: Belarus and Russia.
An explicit analysis of current situation in BCPs between EU countries with Belarus and Russia were performed in “A Study on Common Border Crossings Points Management between Schengen Area and Russia / Belarus”, being commissioned by the secretariat of the Northern Dimension Partnership for transport and logistics in year 2012.
The study made following conclusions.
2.5.1 Road freight 1. There is a lack of implementation of both the letter and spirit of international conventions on the speedy and efficient movement of goods, especially in relation to the TIR Convention, and the International Convention on the Harmonization of Frontier Controls of Goods. This lack of implementation is seen by the PT as the most important issue in relation to cross border delays, even above the need to introduce queue management systems and to build vehicle terminals.
2. This lack of implementation is demonstrated by the excessive level of physical checks on consignments of goods.
3. The lack of implementation is also demonstrated by a lack of effective use of risk management systems in several states, which is a reason for the excessive level of physical checks.
4. These limitations are made more severe by a lack of sufficient staff.
5. There is a lack of flexibility in determining which errors in the supply of data and documents are material or not. Many drivers and several transport operators found their declarations rejected due to spelling errors.
6. There is a lack of vehicle terminals at several BCPs. This leads to long queues on public roads in conditions which lack proper sanitary facilities and, crucially, require truck and passenger coach drivers to be on duty for working time purposes, only to move their vehicles a few metres forward at a time. . This situation is particularly serious at borders which are on rivers (as many are) as the scope for physical expansion of the number of traffic lanes between BCPs is limited by bridge size or the additional cost of building bridges.
7. The use of batch systems for movements of trucks (and to a lesser extent for passenger vehicles) is time consuming and inefficient, and greatly reduces the actual capacity of the BCP in relation to its design capacity. The becomes even more problematic when batching is used for separate sequential processes, as no vehicles can proceed until all work on the batch of vehicles is completed. This is also inefficient in the use of processing booths which are not fully utilized as once the booth is clear it is not in use again until all the vehicles in the batch have been processed at the other booths.
8. The levels of delays within BCPs in Russia and Belarus are also substantive, as a result of what drivers feel are excessive levels of examinations of documents and of cargos, especially those in transit under Customs seal. There is often insufficient use of pre arrival information, where available, for risk management purposes, resulting in more Page 60 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 vehicles being examined, and in greater depth, than international good practice suggests. However, the challenges here are understood by all parties consulted.
9. The limitations on use of pre arrival information in assessing risk have impacts on processing times in a number of ways. Russian Customs carries out physical inspections on a significantly higher proportion of freight consignments than do EU states. These checks have significant impacts on processing times. Physical inspections which use specialized equipment such as X ray scanners take much time due to the limited numbers of such expensive equipment which are available. Because of such limitations, large scale use seriously limits the daily capacity of BCPs by creating a bottleneck that cannot easily be enlarged. This is a clear example of the Project’s belief that procedural issues are key to improve border management. While physical infrastructures such as lane capacity – especially on bridges – are obviously important, these are seen as secondary to processing and management matters issues.
10. The lack of integration of IT systems, especially in the Customs Union (CU), requiring the entry of the same data in several different systems is a major factor that increases the duration of the actual processing without adding value to the process.
11. There is limited use of continuous or automated risk profile information sharing between the Schengen Area and the CU. While generic risk profiling information is exchanged, all parties consulted stressed that the needs and priorities of the Schengen Area and the CU are different, with the CU placing much greater emphasis on fraud risks through undervaluation of goods. There is a need to coordinate and enhance the quantity and especially the quality of operational risk assessment information between the Schengen Area and the CU, taking into account the greater dependence of the CU on import duties and that the true unit values of goods imported into the CU tend to be significantly higher than goods exported to the EU. This obviously leads to greater opportunities for valuation fraud.
12. The EU electronic pre arrival data input system is not always as reliable as had been hoped for and electronic documents often need to be matched with paper ones. While the individual processing times are not great, the numbers of data are such that the delays mount up. The PT has noted the persistent concerns of all BMAs about the reliability of availability to databases, particularly information heavy ones. These concerns have potential implications for the Russian electronic pre arrival data input system due to be introduced in June 2012. The transport operators’ community has suggested that the introductory period after 17th June 2012 may lead to increases in levels of physical inspections due to the electronic declarations being improperly submitted. This poses considerable risks and is consistent with common experiences throughout the world that new technologies often take some time to be perfected. This situation is therefore a risk, but is also an opportunity to examine any weaknesses or to make early and maximum use of successes
13. There is insufficient use of queue management systems such as the Estonian GoSwift system which has been compulsory in Estonia since 1ST August 2011. These systems are typically linked with the introduction of vehicle parks and are used by both freight and passenger vehicles. They are also key components of introducing Advance Passenger Information and Risk Management systems. They are under active consideration across the states studied, including in the CU. While such systems do not necessarily reduce the length of the queue they make it virtual rather than physical , or reduce crossing
Page 61 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 times, which are also dependent on the other factors identified as causing delays, they do make the use of the waiting time more productive, reducing costs, and enable drivers to wait without being deemed to have been driving, which is crucial for working time directive purposes.
14. There are delays travelling beyond the border into the CU as a result of differing approaches to the treatment of goods travelling under TIR status, where special arrangements have to be made if the universal value limit of EUR 60,000 of duties (Customs duties and VAT combined) if exceeded. Truck operators report that it is often difficult to arrange national guarantees in Russia and Belarus. As a result, they often have to travel in Customs arranged convoys (as they have no guarantees) and this causes significant delays.
15. There are insufficient rest and refreshment facilities near a number of key BCPs. This is compounded by the lack of sufficient highway lanes, leading to long queues of up to and exceeding 15 km. There is a serious lack of temporary mobile sanitary facilities in some locations. All parties consulted pointed out that while there are long term infrastructure upgrade plans, the current and expected near future financial situation means that highway capacity will not increase for many years.
16. There were reports from truck drivers of corruption among some BMA staff, (e.g. into or from Poland, and into Russia). However such claims were not made universally and some drivers specifically said that bribes were neither sought nor offered.
2.5.2 Rail freight The situation regarding rail freight is generally satisfactory.
Traffic is normally well within capacity, and crossing points generally have adequate capacity for shipping goods. There are at the rail BCPs sidings enabling trains to be divided and combined. Most goods entering the EU from the CU are actually cleared at the first cargo station beyond – not at – the border , or at the final destination, or at a modal trans-loading station. Advance notification of import declarations was considered acceptable, enabling document checks to be carried out together with physical inspections of trains on a 24/7 basis and, where available, X ray examination. The latter, such as at Koidula in Estonia or Zilupe in Latvia, are mainly used to detect smuggling of goods under the train or hidden in cargos and to identify illegal migrants hiding on freight trains. The major crossing point of Terespol in Poland is due to receive an X ray scanner in 2013. The Project was informed by Belarusian colleagues that there were currently no X ray scanners for rail freight in Belarus. The installation of such equipment would obviously be desirable. However, given the considerable costs involved in purchase and maintenance, it may be worth EU and CU states considering an agreement to share “raw” scans of cargos.
The Polish introduction of a common CIM / SMGS Consignment Note (SMGS being used by countries with direct access to the Russian rail system, i.e. the Baltic States and Finland, with CIM being used by Poland and other states without such access) should be considered as a model for clearance procedures and subsequent monitoring.
Page 62 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 2.6 Summary of bottlenecks ACL countries Summary evaluation of bottlenecks mentioned in previous chapters is given in the Table 27 below, by splitting them into infrastructural and non-infrastructural categories.
Table 27: Evaluation of ACL ports and hinterland bottlenecks SUMMARY OF BOTTLENECKS Current evaluation Evaluation considering future cargo flow forecasts Infrastructural Maritime Not significant Not significant, considering planned infrastructure developments in ports (terminals) Road network Not significant Not significant, considering planned road projects Interoperability of rail Moderate Should be solved by planned rail networks bottlenecks projects and through SMGS and CIM harmonization Rail rolling stock Moderate Remaining actual bottlenecks Block trains to Significant hinterland bottlenecks Hinterland logistic Significant for the Significant bottlenecks might emerge, centres future since no exact strategies and development plans are in place Intermodal terminals Significant for future Bottlenecks can be minimised, implementing modern technologies to fasten modal shift operations Non- Border crossing time Significant Will increase with rise of the cargo infrastructural bottlenecks flow, if no actions implemented Operational Significant Solving of the bottlenecks would bottlenecks within bottlenecks smooth operational cargo flows and train shunting optimize cost levels operation in some ports (e.g. Riga)
Business community feedback
Within this study a business community feedback was obtained by acquiring port clients’ opinion on the ACL ports and hinterland operation. Online survey was used to obtain the feedback.
The results of the survey to some extent also express the point of view of port clients about bottlenecks in transport and logistics performance in the eastern ACL port range and their hinterland, see below Figure 11: Average evaluation of ACL range ports and hinterland operation by criteria (also see chapter 3.3 “Business community feedback” for more details).
Page 63 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Figure 11: Average evaluation of ACL range ports and hinterland operation by criteria
Source: SIA “NK Konsultāciju birojs” Results indicate, that lower scores were given for following spheres: capacity and performance of the intermodal network behind the ports: rail hinterland connections, organization of block trains, intermodal terminals and logistics centres.
Further information
In depth analysis on bottlenecks in cross border communication aspect between countries of the network was performed in the study NORDIM, contracted by countries – members of the Northern Dimension Partnership for Transport and Logistics (NDPTL). The study identifies bottlenecks from regional, transport mode or type of cargo perspective. Such categorization is presented in the table below.
Table 28: Categorization of bottlenecks (Source: NORDIM study)
Page 64 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 2.7 Development of the transport network of the ACL range European and regional transport policies and respective funds, being allocated for their implementation play a crucial role in development of ports infrastructure and their hinterland connections, thus having great impact into competitiveness of ports and relevant transport corridors. The chapter below demonstrates how ports, roads, railways and nodes of the ACL range are being considered in main programs and projects, dedicated for next European financial perspective 2014-2020.
2.7.1 Global dimension of eastern ACL ports hinterland. It is important to notice that all eastern ACL ports are targeting very similar regions in Eurasian continent. This is well demonstrated by routes of container trains being launched during last years from ports of Estonia, Latvia, and Lithuania.
Competition is going for four type of destination: domestic, Russia, Ukraine/Black Sea, Central Asia/China. Lithuania and Latvia are competing for cargo of Belarus.
2.7.2 EU TEN-T network development Crucial changes in the structure and quality of transport systems in hinterland of ACL ports during last two decades were achieved at large degree due to significant investments from EU funds. Conditions and rules of financing of development of the transport infrastructure are renewed. European Commission submitted the proposal for a regulation of the European Parliament and of the Council on Union guidelines for the development of the trans-European transport network with (Brussels, 19.12.2011 COM (2011) 650 final). Only projects, related the core network will be mainly financed by Connecting Europe Facility (CEF) instrument in the EU Multiannual Financial Framework (MFF) 2014-2020.
New TEN-T mechanism is based on two-layers approach: core network and comprehensive network. The TEN-T core network is presented in the following scheme:
The route of the corridor 1 (Baltic – Adriatic corridor) of the network is directly related to the hinterland of eastern ACL ports (figure below).
Figure 12: TEN-T Core network connections in ACL port range
Source: TEN-TEA
Page 65 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Seeking to acquire European funds for eastern ACL ports range it is important to have in mind that project of East-West direction in this range will be less supported and funds will concentrate on priority of the core network – corridor No.1.
The chain, linking TEN-T corridor No.1 and East-West routes are the nodes – one of basic definitions of revised TEN-T. Helsinki, Tallinn, Ventspils, Riga, Klaipeda – all those subjects of the recent work are marked as nodes in the new TEN-T. This circumstance will require both – renewed approach to hinterland network and pursuit of common denominators for competing ports in the range.
2.7.3 Baltic Transport Outlook 2030 11 states around the Baltic Sea agreed on financing of the project Baltic Transport Outlook 2030, which had to outline regional transport network and it’s perspectives for next 2 decades.
Below is presented a pattern from the final result of the project – regional transport network.
Figure 13:BTO 2030 Strategic transport network
Source: Baltic Transport Outlook 2030
2.7.4 NDPTL network Northern Dimension Partnership for transport and logistics, representing 11 states around the Baltic Sea (incl. Norway) after long discussions agreed on regional transport network. This was an important step to consensus on a way to agreement on the revised TEN-T core and comprehensive networks.
Page 66 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 2.7.5 EU policy for transport neighbourhood Development of the eastern ACL ports and their hinterland network is very tightly related with EU policy in transport neighbourhood. Declared as Northern Axis in the document Extension of the major trans-European transport axes to the neighbouring countries, COM(2007) 32, 31.1.2007 and further developed in Communication from the Commission to the Council and the European Parliament “The EU and its neighbouring regions: A renewed approach to transport cooperation”(Brussels 7.7.2011 COM (2011) 415 final this policy will become a powerful support for public and private transport and logistics stakeholders in every of eastern ACL range countries.
2.7.6 Rail Baltica Construction of high speed railway line in North-South direction will bring new quality in horizontal interaction and cooperation between ports of the ACL range.
This is well demonstrated in following picture below.
Figure 14: Rail Baltica network of nodes, hubs and their communication
Source: project Rail Baltica Growth Corridor
This figure highlights most of nodes, pointed out in a new TEN-T core network corridor No.1. It means that strategies of ACL ports and their partners in development hinterland networks will need both - a broader and renewed approach, and flexibility and cooperation efforts.
Page 67 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 2.8 Conclusions and assessment of relevant multi-modal networks
2.8.1 Terminals Totally 23 container and 24 RoRo terminals are identified and analyzed in this work package.
Based on findings of previous chapters following scheme, including operator of every of container and RoRo terminal in ACL range ports is being composed, using the regional intermodal network, elaborated by the NDPTL study NORDIM as background. This network includes all most important logistic nodes and border crossings in a region. This scheme allows to have detailed understanding of distribution of intermodal capacities in a range and will serve in further stages of the study.
Figure 15: Container and RoRo terminals in ACL range ports and their operators
Source: SIA “NK Konsultāciju birojs” As the Figure 15 demonstrates, 70% of terminals are concentrated in ports of Finnish Gulf, while other 30% of terminals are working in Latvian and Lithuanian ports.
Additionally to maritime terminals are built up areas for added value services and warehouses in most of the ports. All ports have ambitious plans for development of the infrastructure.
Latvian ports of Riga and Ventspils have a Freeport status, port of Liepaja is within a Special Economic Zone; this makes them attractive for especially foreign investors related to the Russian import and export trade.
Port of St. Petersburg is rapidly increasing capacities for container and RoRo handling with attraction of global players. New container terminals are to be built or significantly expanded in ports of Riga, Tallinn, Liepaja, and Klaipeda. This without doubt will increase competition Page 68 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 between eastern ACL ports and rise criteria for infrastructure, superstructure and organization of maritime terminals.
2.8.2 Road and rail network No significant structural changes in road network are foreseen. Main investments will be dedicated to improvement of existing road network and maintenance.
Construction of Rail Baltica high speed line of the European gauge will increase role of rail transport in land operations. Taking into account the trends of the prospective European development, national railways are planning to provide the main transit corridors with electrical traction, implementation of ERTMS - GSM-R.
2.8.3 Intermodal transfer points and hubs Intermodal terminals outside ports, which are included into amendment 8 to the Agreement on International Goods Transport by Rail of the Organisation for Co-operation between Railways (OSJD) and are only intermodal transfer points outside ports are generalised into scheme below. Seven such terminals are in Estonia, 21 – in Latvia (14 of them in the capital city Riga) and 6 in Lithuania.
Figure 16: Intermodal terminals outside ports of the ACL range
Source: SIA “NK Konsultāciju birojs”
Page 69 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 A weak point in competitiveness of the ACL intermodal range remains lack of logistic infrastructure in the hinterland of the ports (logistic centres, dry ports etc), within which all activities relating to transport, logistics and the distribution of goods - both for national and international transit, are carried out by various operators on a commercial basis.
2.8.4 Border crossing Border crossing points are still bottlenecks for road transport. Urgent consideration should be given to the introduction of queue management systems and the creation of vehicle terminals, ideally on both sides of the border simultaneously. Having the relatively fast flows of commercial freight at the Finnish – Russian border and the recent introduction of a queue management system in Estonia, it is suggested that particular attention needs to be paid to best practices in a network. The Customs Services should cooperate more closely in providing data (sanitized if necessary to comply with data protection legislation) between each other to assist in creating more detailed and relevant risk profiles for the importation and export of goods. The communications network capacities between computer systems, and thereby the resulting transmission speeds and system reliabilities of both Customs and Border Guards systems should be increased significantly.
The degree of compliance with both the letter and spirit of international conventions such as the TIR Convention should be reviewed by all states in the NDP, in relation to a jointly agreed list of Key Performance Indicators measuring compliance and non- compliance.
There is not much to be improved in relation to the process of crossing and clearing cargo trains. The crossing process is relatively straight forward and does not involve long delays that relate to the border management itself. Border security and customs efficiency in stopping illicit goods could be improved by the installation of X-Ray equipment at all rail Border Crossings.
2.8.5 EU dimension Crucial changes in intermodal infrastructure in the Baltic countries were possible due to heavy support by European Structural and Cohesion funds. Renewed EU TEN-T approach is based on two-layers approach: core network and comprehensive network. Only projects, related to the core network may expect financing from Connecting Europe Facility (CEF) instrument in the EU Multiannual Financial Framework (MFF) 2014-2020.
In near future the character of the regional intermodal network will encounter changes with construction of the Rail Baltica high-speed route, connecting Finland and Baltic countries with mainland of the European Union. Importance of Rail Baltica will increase with development of the corridor No.1 of the revised EU TEN-T network and realization of the EU transport neighbourhood policies. Competitiveness of ports and national transport systems will depend from adaption to those new conditions, planning and development of intermodal nodes. This will require from the ports and their partners right development strategies and addressed investments.
2.8.6 ACL Eastern Baltic multimodal network: full scenario Figure 17: ACL Eastern Baltic multimodal network (map view) presents a map view of the final result of the delineation of the ACL Eastern Baltic multimodal network. As it was assumed in the beginning, the delineation of the multi-modal networks is framed by four components: maritime intermodal infrastructure; land intermodal infrastructure; road infrastructure; rail infrastructure and is accomplished by identification of terminal operators in the ports.
Page 70 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Figure 17: ACL Eastern Baltic multimodal network (map view)
Source: SIA “NK Konsultāciju birojs” Figure 18: ACL Eastern Baltic multimodal network (abstract view) presents an abstracted view of the final result of the delineation of the ACL Eastern Baltic multimodal network, which gives good understanding of total logistic capacity of the region and nature of its consumption.
Figure 18: ACL Eastern Baltic multimodal network (abstract view)
Source: SIA “NK Konsultāciju birojs”
Page 71 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 2.8.7 Wider approach Analysis of infrastructure and equipment in intermodal terminals demonstrates that terminal technical capacity is not a single decisive factor to attract the cargo. Industries and trade (who is a dominating user of the intermodal network) require more broad approach, looking for very effective supply chains to move their resources and goods fast, cost- effective and safe, those keeping high competitiveness in rapidly globalizing market. The analyze of the network shows that efforts of both public and private stakeholders, being put for modernization and development of the transport and logistics system in the region allowed to successfully meet the rapidly growing demand of industries and trade for handling of goods in intermodal transport units (containers and trailers).
At the same time the regional intermodal network faces and will face in a future new challenges. Immediate challenges are caused from one side by accelerated modernization of the global transport and logistics system, from other side – by growing competition in the port range due to fast development of capacities and especially in the Great port of St. Petersburg. This will require higher competitiveness of every port in the rage and their tight cooperation with land transport and logistics developers and operators.
Practice of last year demonstrates that stakeholders in a region acquired good experience in planning and accomplishing investments. The prosperity in the competition will depend of synergies of stakeholders in acquiring and bringing to success the EU funds, efficient cooperation between public and private market actors.
Page 72 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013
3 Transport corridor profiles, sample shipments and business community feedback This chapter of the study has the objective to summarise relevant operational and infrastructure related findings of the previous chapters and adding transport routing issues in order to reflect the users’ point of view of certain transport corridors and routing options in the region. Individual transport corridor profiles and the simulation of total cost and lead times for sample shipments along the corridors supporting the identification of strengths and weaknesses relevant to each corridors’ market attractiveness and competiveness. Furthermore, strengths and weaknesses from port client’s point of view have been identified based on business community feedback obtained through an online survey.
As a general rule, there exists for any region and any single definition of distance or impedance a port, which is objectively closest to the cargo origin or its destination. One may assume that that all cargo is routed via the nearest suitable port where cost of overland transportation per tkm is minimised – however, this is the theory. The reality as usual is much more complex, distance is not the only possible indicator and the closest port not necessarily must be the cheapest solution looking to the whole transport chain of a cargo shipment. Not all the ports offer the same connectivity for all cargo types and destinations, and transport companies e.g. would typically try to optimise their part of the transport chain according to own internal cost whereas public policy is keen on including transport externalities. Nevertheless, it must be assumed that the degree of competition between ports is likely to be limited as e.g. the demand for port services is derived from overall demand for transport from origin to destination. This means that customers are likely to be relatively insensitive to changes in prices for port services. However, the degree of price sensitivity is likely to vary across customer groups. For example from the perspective of a shipper, port charges are likely to be more important than for a final customer for whom they will necessarily represent a lower fraction of total cost. As both shippers and final customers can in principle chose which ports (not) to use, the price sensitivities for both groups of customers is relevant when defining the geographic market. Nevertheless, what really counts at the end of the day and serves as main decision argument are the total cost and lead time of transportation along the specific corridor.
3.1 Individual transport corridor profiles As indicated in chapter 1.3 Trade pattern and cargo flows of this study, the region is highly import driven with Russia as the principal market. The trade pattern as such already defines in the majority of cases the sea-side transport mode, thus overland transportation and connectivity of the selected ports play a key role in defining the competitiveness of the selected transport corridors and therefore are of main interest for further analysis in this chapter.
The demand for cargo related transport services in the region is generated mainly through import and export activities of shippers and consignees which are usually manufacturing, trading or other kind of companies. Transport mode and transport route of cargo is set by the delivery conditions and is influenced by national customs procedures, transport condition, cost and lead time, standard of transport system etc. In general, the trade pattern related to individual ports depend s on the type of traffic through a port which, on the other hand, is influenced by the specific conditions of each port and industries serviced.
Page 73 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Shippers may purchase transport services in a number of ways, typically either via direct contracts with transport providers or via intermediary logistics firms. The following Figure 19 illustrates route options which are generally competing. In the context of this study, the Place of Origin / Place of Destination may be replaced with Outbound / Inbound HUB. Even though combined rail and pure road transportation may serve as an alternative and competing transport option, emphasis of this study lays on the intermodal solutions, with RoRo and Container being the key routing options.
Figure 19: Generally competing route options
Source: SIA "NK konsultāciju birojs"
Hereinafter, the 3 principal parts (ports, maritime and overland transportation) of selected transport corridors are being analysed and measured in terms of principal infrastructure characteristics, operational efficiency, connectivity, and service levels.
3.1.1 Ports as gateway and interface between sea and land transport The selected ports at the Amber Coast are the important knots of the transport corridor, besides their strategic location, the efficiency of port infrastructure, costs and connectivity, sea- but as well land-side, are the main competitive factors. In the following the ports have been profiled in respect of their container and RoRo operation.
Container Port Operation The total container volume through the selected Amber Coast ports grew by 10% p.a. from almost 2.6 million TEU in 2005 to slightly over 4.2 million TEU in 2011.16 However, the increase of container throughput was not equally distributed.
Strongest growth experienced the port of St. Petersburg which more than doubled its throughput from 1.1 million TEUs in 2005 to over 2.3 million TEUs in 2011 (CAGR 16%), followed by Riga which almost doubled its throughput coming from 156,000 TEUs in 2005 to 303,000 TEUs in 2011 (CAGR 14%).
16 Note: The total container volume handled includes full and empty containers as well as transhipment volumes, thus figures are different from the summarised container demand as presented in chapter 1.3 Trade pattern and cargo flows Page 74 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Klaipeda and Tallinn also were able to increase throughput, from 214,000 TEUs in 2005 to 382,000TEUs in 2011 (CAGR 12%) and from 128,000 TEUs to 198,000 TEUs (CAGR 9%), respectively.
Hamina-Kotka moderately increased throughput from 510,000 TEUs to 612,000 TEUs (CAGR 4%), however the decrease of volumes in Helsinki from 460,000 TEUs to 382,000 TEUs (CAGR – 4%) offsets this moderate growth. After a short period of insignificant volumes between 2005 and 2009, the port of Ventspils ended up with zero throughput since 2009.
Figure 20: Container throughput (full + empty) at selected ports, 2005 – 2011 in TEU
Source: SIA "NK konsultāciju birojs" derived from published port statistics Summarising the historic development of port throughputs as a kind of market share, the following Figure 21 illustrates clearly the shift of volumes within the delimited transport network. Apparently infrastructure developments in the port of St. Petersburg as well as the Russian national transport development strategy “Russian cargo through Russian ports”17 bearing the first fruits. Interestingly, the three main ports of the Baltic States, namely Riga, Klaipeda and Tallinn, are not impacted from this trend so far. Only the Finnish ports Hamina-Kotka and Helsinki have experienced a significant decline of market share, leading to the assumption, that especially cargo for and from the metropolitan area of St. Petersburg is being affected from this shifting development.
17 Source: http://www.rzd-partner.com/press/380710/ Page 75 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Figure 21: Port share of total container throughput at selected ports, 2005 vs. 2011 in %
Source: SIA "NK konsultāciju birojs" derived from published port statistics Measuring and benchmarking the efficiency and effectiveness of container terminals nowadays still is a challenging task mainly due to limited data availability. However, when focusing on the three key elements, namely quay, cranes and yard, a certain comparison of performance and capacity between terminals can be done. The following Table 29 summarises key technical details for container operation of the selected ports as presented in chapter 2.1Maritime infrastructure and as relevant for the further capacity and performance benchmarking.
Table 29: Technical details for container operation of selected Amber Coast ports, 2011/2012 Gantry Land Max. Berths 18 Total quay Terminals Port cranes area draft # # ha m m # Hamina-Kotka 20 3 620 12.5 2,450 2 Helsinki 21 7 328 12.5 2,604 1 Klaipeda 10 7 415 11.5 1,094 2 Riga 12 11 1,962 11.7 1,125 3 St. Petersburg 32 57 269 12.3 8,551 6 Tallinn 3 8 737 10.5 600 1 Ventspils 3 1 1,384 13.2 1000 1 All ports 101 95 5,715 - 17,142 16 Source: SIA "NK konsultāciju birojs" derived from Baltic Container Yearbook 2012 and information published by terminals
Following Table 30 provides operational details of the selected Amber Coast ports based on the year 2011.
18 Note: Gantry cranes include STS, RTG, RMG and container bridges Page 76 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Table 30: Details container operation of selected Amber Coast ports, 2011 Operational Throughput Regular Services Port capacity ‘000 TEUs ‘000 TEUs # Hamina-Kotka 612.6 1,500 11 Helsinki 382.3 400 15 Klaipeda 382 650 11 Riga 303 350 9 St. Petersburg 2,365.2 2,500 28 Tallinn 198 450 6 Ventspils 0 150 0 All ports 4,243.1 6,000 80 Source: SIA "NK konsultāciju birojs" derived from Baltic Container Yearbook 2012 and information published by terminals
The following indicators have been considered for above mentioned benchmarking related to the year 2011:
Operational capacity utilisation in %: throughput TEUs / operational capacity in TEUs Land utilisation: throughput TEUs per hectare Quay Line capacity: throughput TEUs per quay metre Berth capacity: throughput TEUs per berth Crane utilisation: average TEUs / year per Crane
There are strong regional differences regarding the performance and capacity utilisation, generally terminals in Asia and Middle East achieve a considerably more intensive use in terms of quay line, cranes and land than terminals in Europe. North American terminals are generally at the lower end of the scale, particularly in terms of the intensity of land usage.
In a global context, throughput per hectare for example averages at approximately 20,000 TEUs per annum. Whereas large terminals are almost 50% higher, smaller terminals achieve in average just 8,000 TEUs p.a. Quay line capacity benchmarks range from 800 to 1,700 TEUs per metre of quay, the industry average is considered to be just about 900 TEUs. Larger terminals naturally achieving much higher figures than smaller one, also transhipment terminals are well above average. The average volume handled per gantry crane does not reflect the real capacity as e.g. downtime for maintenance and maximum berth occupancy levels are not considered.19
The following Table 31 provides an overview of capacity and performance benchmarks of the selected Amber Coast ports for 2011. However, due to limited data availability and different information sources, findings must be seen as high-level indicators rather than “real world” measurements.
19 Source: Drewry Report on Container Terminal Capacity and Performance Benchmarks, 2010 Page 77 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Table 31: Container Port Capacity and Performance Benchmarks of selected Amber Coast ports, 2011 Operational Land Quay line Crane capacity Berth capacity utilisation capacity utilisation Port utilisation % TEU/ha TEU/m TEU/berth TEU/unit Hamina-Kotka 41 988 250 30,630 204,199 Helsinki 96 1,166 147 18,207 54,620 Klaipeda 59 920 349 38,200 54,571 Riga 87 154 269 25,250 27,545 St. Petersburg 95 8,792 277 73,912 41,494 Tallinn 44 269 330 66,000 24,750 Ventspils 0 0 0 0 0 Avg. all ports 71 742 248 42,011 44,664 Source: SIA "NK konsultāciju birojs"
Furthermore, the principal port costs of vessel callings at the selected ports are being compared and presented in the following
Table 32. Given the fact, that each port has its own structures and specialities for dues and charges, the information has been summarized in order to be comparable. All data for are related to liner services. Furthermore, for cargo related dues only rates for full cargo units has been considered. Also no discount schemes were considered nor exception rules or other eventualities. In case of exchange rate, historic exchange rate of January 2013 has been used. Thus, all data only provide an high level indication and may differ on operational level. Nevertheless, in the overall transport corridor cost picture, charges and dues of ports are only from minor importance.
Table 32: Principal port costs and dues for container feeder at selected Amber Coast ports in EUR, 2013
Port Fairway Cargo rate / Mooring / Port Quay dues / GT dues / GT dues / GT unit unmooring
Hamina-Kotka 0.53 0.43 – 1.95** 44.85 n/a 155.00 – 402.50 Helsinki 0.36 0.43 – 1.95** ~ 40.23* n/a 75.40 – 357.75 Klaipeda 0.66 0.05 5.90 0.07 n/a Riga 0,- 0.38 n/a 0.085 0.17 per GT St. Petersburg 0.22*** 0.28 n/a n/a n/a Tallinn 0.79 0.07 – 0.14 0,- n/a 100 - 331 Ventspils 0,- 0,- ~ 9.86* n/a 55 - 273 Avg. all ports 0.37 0.24 – 0.68 ~ 20.17 0.078 96.35 - 341.06 Source: SIA "NK konsultāciju birojs" derived from published port tariffs
Notes to above table:
* Cargo rate based on gross weight per ton. For calculation purposes 12.8 to gross weight20 has been assumed. ** Fairway due depends on vessel size and ice class of vessel. *** Port due includes average of winter and summer surcharge the port authority is charging per GT.
20 Source: http://www.vel-wagon.eu/phocadownload/vel-wagon%20newsletter%202.pdf Page 78 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 RoRo Port Operation The total RoRo volumes handled at the selected Amber Coast ports are expressed in cargo tons which are transported in trucks, Mafy trailer and trade cars excluding passenger cars using ferry services of the port. In the period 2005 to 2011 the total volume of RoRo cargo measured in tons grew by almost 20% (CAGR 4%), from 16.3 million tons in 2005 to over 19.5 million tons in 2011. The following Figure 22 illustrates the respective development of handled RoRo cargo in tons for selected ports.
Figure 22: RoRo throughput at selected ports, 2005 – 2011 in tons
Source: SIA "NK konsultāciju birojs" derived from published port statistics
The port of Ventspils experienced highest growth rates during this period, arriving at over 1.88 million tons handled in 2011 with a CAGR of 17% between 2005 and 2011. Also the port of Klaipeda continuously increased throughput from over 3 million tons in 2005 to over 4.9 million tons in 2011 (CAGR 10%). A decline of throughput has been identified for the port of Riga, where volumes dropped from 637,000 tons in 2005 to 556,300 tons in 2011, and most significantly for the greater port of St. Petersburg with a reduction from 3.49 million tons in 2005 to 1.61 million tons in 2011. However, through the new port in Ustj-Luga significant growth is expected for the coming years at the greater port of St. Petersburg. The development of port market share is illustrated in the following figure.
Figure 23: Port share of total RoRo throughput in tons at selected ports, 2005 vs. 2011 in %
Source: SIA "NK konsultāciju birojs" derived from published port statistics Page 79 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013
The ports of Klaipeda and Ventspils were able to gain significant market shares in the period 2005 – 2011. Klaipeda increased its share to 25% and Ventspils doubled its share from 5% in 2005 to 10% in 2011. St. Petersburg significantly lost volumes and market share, arriving at 8% in 2011.
Similar to container terminal operation, also the operation of RoRo terminals on a port level has been measured and benchmarked in respect of efficiency and effectiveness. The basic technical details for the RoRo operation of selected ports are being presented in the following Table 33.
Table 33: Technical details for RoRo operation of selected Amber Coast ports, 2011/2012 RoRo Berths Land Area Max. draft Total quay Terminals Port ramps # ha # m m # Hamina-Kotka 13 620 5 10 1,050 2 Helsinki 25 328 16 11 1,854 3 Klaipeda 4 415 7 8.5 1,300 2 Riga 3 1,962 4 9.5 360 3 St. Petersburg 25 269 2 11.5 4,623 5 Tallinn 30 737 7 11.5 4,200 3 Ventspils 2 1,384 2 13.2 1000 1 All ports 101 5,715 43 -- 13,607 19 Source: SIA "NK konsultāciju birojs" derived information published by terminals
Operational details based on the year 2011 and as needed for the benchmarking are presented in the following Table 34.
Table 34: Details RoRo operation of selected Amber Coast ports, 2011
Throughput Regular Services Port tons # Hamina-Kotka 359,865 24 Helsinki 6,549,813 13 Klaipeda 4,913,600 5 Riga 556,300 1 St. Petersburg 1,610,700 26 Tallinn 3,690,300 7 Ventspils 1,888,00 4 All ports 17,869,378 80 Source: SIA "NK konsultāciju birojs" derived from Baltic Container Yearbook 2012 and information published by terminals
For the previously mentioned benchmarking of RoRo port operation the following indicators have been considered, base year 2011:
Land utilisation: throughput tons per hectare Quay Line capacity: throughput tons per quay metre Berth capacity: throughput tons per berth
Page 80 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Ramp utilisation: average tons / year per ramp
RoRo transports react more sensitive to changes of port dues and charges as container transports do. In case of changes, (e.g. short advised increase of dues), shipping lines reacting very sensible on it and even in some cases may reconsider avoiding future port calls.21
Table 35: Principal port costs and dues for RoRo vessels at selected Amber Coast ports in EUR, 2013 Port dues / Fairway dues / Cargo rate / Quay dues / Mooring / Port GT GT unit GT unmooring Hamina-Kotka 0.53 0.43 – 1.95** 44.85 n/a 155.00 – 402.50 Helsinki 0.36 0.43 – 1.95** ~ 84.86* n/a 75.40 – 357.75 Klaipeda 0.14 0.05 5.90 0.07 n/a Riga 0,- 0.19 n/a 0.085 0.17 per GT St. Petersburg 0.14 0.15 n/a n/a n/a Tallinn 0.225 0.07 – 0.14 4.50 n/a 40 - 129 Ventspils 0,- 0,- ~ 20.79* n/a 55 - 273 Avg. all ports 0.20 0.19 – 0.63 ~32.18 0.078 81.35 – 290.56 Source: SIA "NK konsultāciju birojs" derived from published port tariffs Notes to above table:
* Cargo rate based on gross weight per ton. For calculation purposes 27t gross weight22 has been assumed for a semi-trailer. ** Fairway due depends on vessel size and ice class of vessel. *** Port due includes average of winter and summer surcharge the port authority is charging per GT.
3.1.2 Short sea shipping network (maritime leg) The container feeder network strongly is aligned to Northern Europe hub ports and is the maritime link to satellite ports (hub and spoke) with direct connection to the remote hinterland. Usually it is organised following the milk run methodology. The Ro-Ro ferry network on the other hand is usually arranged to connect 2 or 3 ports straight as a stable link with high frequency, often called the floating bridge or on long distances with loop services similar to the container network. From particular interest for this study is the liner shipping concept, divided into two parts depending on how the vessels are loaded and unloaded – lift-on/lift-off (LoLo) and roll- on/roll-off (RoRo) – and profiled as relevant to the selected Amber Coast ports in the following.
Container (LoLo) Feeder Network profile Since its official introduction in the mid of 1950ies in the US, the container as a transporting unit conquered the world, arriving in the mid of 1960ies in Europe and from then onwards continuously opened up new markets for many companies all around the globe. The Baltic Sea Region experienced especially in the last 20 year a steady growth in container utilization with an ongoing trend.23 Overall in the BSR, containerised goods are mainly manufactured goods, in some countries also bulk and break-bulk products (e.g. pulp, paper, sawn wood, etc.) are being containerised in the majority of cases outbound and usually due to certain cost advantages caused by intense availability of empty containers that are required back in demand locations (e.g. Northern Europe HUB ports, Asia). The container shipping business is truly an international business and the decisions from the world wide operators affect the stream and pattern of the
21 Source: http://www.riigikogu.ee 22 Source: http://www.vel-wagon.eu/phocadownload/vel-wagon%20newsletter%202.pdf 23 Source: www.containerhandbuch.de Page 81 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 flow and routing of containers. This shift has coincided with the liner operators’ desire to move away from offering a simple quay/quay service to their clients and instead to offer a complete logistics service. However, with this strategy they enter in many cases in direct competition to their largest customers, the intermediary logistics firms.
There are some short sea cargo-oriented services like e.g. between Poland / Sweden and the UK and in principle all feeder lines offer short sea services. However, the overall structure and schedules of the feeder network within the Baltic Sea are aligned to the deep sea services to and from North Sea hub ports (e.g. Hamburg, Rotterdam, Antwerp, Bremerhaven, etc.) and direct calls in Aarhus, Gothenburg and Gdynia with the aim to optimise timetables in a broad context.
Figure 24: Scheduled feeder services in the Baltic Sea Region, 2011
Source: Baltic Transport Outlook 2030, base year 2011
In terms of ownership the Baltic feeder market can be split into three groups. Until 2006 the biggest market share (approx. 40%) in terms of capacity belonged to the two main independent feeder companies Unifeeder and Teamlines. The remaining share was distributed equally to dedicated feeder lines of the ocean carriers and to local, smaller operators. Independent feeder operators in the sense of not being attached to any of the large deep sea operators continuously revise their feeder network to match cargo flows (i.e. demand). However, the ongoing trend for consolidation in the container market for the large deep sea shipping lines has also reached the
Page 82 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 feeder market and in 2012 dedicated feeder services of ocean carriers represented already more than 50% of the total feeder capacity with a further increasing trend.24
Currently 24 feeder operators serving the Baltic Sea market with a total of 149 vessels and 159,307 TEUs total capacity. The average vessel capacity is roughly 1,000 TEUs. 14 out of these 24 feeder operators connecting the selected Amber Coast ports with over 90 vessels with the principal Northern Europe hub ports. The port of Ventspils does not have any scheduled feeder connection since 2009, thus is not included in the following table.
Table 36: Short sea shipping lines / feeder operators with callings at selected Amber Coast ports in alphabetic order, 2012/2013 Hamina- St. # Operator Helsinki Klaipeda Riga Tallinn Kotka Petersburg 1 CMA CGM X X X X X 2 Containerships X X X X 3 Delta Shipping Lines X 4 Hacklin Seatrans X 5 Mann Lines X 6 MSC X X X X X X 7 OOCL X X X 8 SCA Transforest X 9 Sea Connect X X X 10 Seago Line X X X X X 11 Swan Container Line X 12 Team Lines X X X X 13 Tschudi Lines X X X X 14 Unifeeder X X X X X X Source: SIA "NK konsultāciju birojs" derived from Baltic Container Yearbook 2012 and published information of feeder operators The selected Amber Coast ports are not connected equally to North Europe hub ports. As previously described, connectivity of ports and frequency of calling strongly depend on volumes and the importance of a port for the large deep sea carriers. Based on actual feeder schedules of the above identified feeder operators, key characteristics of the feeder links have been elaborated. The average days of voyage (inbound or outbound) have been derived from individual, actual schedules of the different operators serving the respective link. On the links where no operators are present, direct route between the Amber Coast port and HUB port has been calculated, considering an average vessel speed of 18.5 knots for maritime transport plus 1 day each at port of loading and port of discharge. As such the average days resulting from this methodology cannot compared to the average days from active links, as ports are usually integrated in loops where certainly the average voyage time to a hub port takes longer then theoretical calculated one.
Table 37: Key characteristics of feeder links between selected Amber Coast and HUB ports, 2012/2013 Amber Coast Distance in Avg. days Avg. days HUB Port Operators Port Nm inbound voy. outbound voy. Antwerp 6 1,315 6.0 6.0 Hamina-Kotka Bremerhaven 1, 6, 7, 10, 12, 1,091 6.5 7.5
24 Source: Baltic Container Yearbook 2012 Page 83 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Amber Coast Distance in Avg. days Avg. days HUB Port Operators Port Nm inbound voy. outbound voy. 14 Hamburg 1, 4, 7, 12, 14 786 4.5 5.5 Rotterdam 4 1,219 5.0 5.0 Aarhus 2 663 4.0 5.0 Antwerp 6 1,254 8.0 8.0 Bremerhaven 1, 6, 10, 12, 14 1,030 6.8 6.4 Helsinki Hamburg 1, 2, 4, 12, 14 721 5.4 4.2 Rotterdam 2, 13, 14 1,158 5.0 5.0 Zeebrugge 14 1,201 5.0 8.0 Aarhus 10, 14 429 6.0 5.0 Antwerp 6 1,021 4.0 4.0 6, 7, 10, 12, 13, Bremerhaven 797 4.6 5.0 14 Klaipeda Gothenburg 14 453 6.0 5.0 Hamburg 7, 9, 12, 13, 14 487 4.3 6.6 Le Havre 6 1,115 7.0 7.0 Rotterdam 2, 6, 9, 13, 14 925 6.0 5.0 Aarhus 2, 10 586 12 12.0 Antwerp 6 1,173 6.0 6.0 Riga Bremerhaven 6, 10, 14 949 6.0 4.0 Hamburg 1, 2, 12, 14 640 5.0 4.3 Rotterdam 2, 5, 14 1,077 5.0 6.0 Aarhus 3, 14 805 10.5 11.0 Antwerp 1, 6, 7, 12, 14 1,395 7.0 7.3 Bremerhaven 6, 10, 12, 14 1,171 5.5 6.6 1, 3, 4, 6, 7, 9, Hamburg 868 5.5 7.1 St. Petersburg 11, 12, 14 1, 3, 6, 7, 8, 9, Rotterdam 1,299 6.6 6.0 10, 11, 12, 14 Tilbury 3 1,375 15.0 15.0 Zeebrugge 1 1,342 7.3 6.5 Antwerp 6 1,233 9.0 9.0 Bremerhaven 6, 12, 14 1,009 5.5 4.0 Tallinn Hamburg 1, 9, 12, 14 700 4.0 5.6 Rotterdam 1, 9 1,137 6.0 7.0 Antwerp 1,057 5.5 5.5 Bremerhaven 833 5.5 6.1 Ventspils Hamburg 529 4.5 3.8 Rotterdam 961 4.5 5.5 Source: SIA "NK konsultāciju birojs" derived from published information of feeder operators and own calculations in case of Ventspils
RoRo Ferry Network Profile The roll-on/roll-off (RoRo) may have its introduction already 100 years before the introduction of container, initially designed and used to take trains across rivers where no bridge was available. Then, in the late 1950ies the vessel design was adjusted to attend the demand for transporting motor vehicles, especially cars and trucks on short-sea routes and often used as a kind of floating bridge. With the time, vessel combinations such as RoPax (RoRo and passenger) and ConRo (container and RoRo) have been successfully introduced to the market as well. The
Page 84 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 introduction of RoRo vessels and combinations of them, allowed to cross frontiers with a minimum delay and limited handling activities, resulting in a reduced port time, increased cargo safety and vessel wise, faster speed and improved fuel consumption characteristics compared to the common general cargo vessels. However, the RoRo vessel is a specialised transportation mode which can fully demonstrate its advantages mainly in closed trade cycles such as the intra-Baltic trade.25
Differently to the container shipping business, the demand for RoRo ferry services is driven mainly by regional trade relations. Key factors for using a RoRo ferry are shipping prices, transport time and frequency as well as geographical location of ports, and cargo origin and destination. Even though in some cases RoRo and LoLo transport modes are competing, this study focuses on the competition analysis of ports within given transport corridors without considering possibilities of modal shifts. In respect of the selected ports, two systems of ferry liner services can be observed. On the one side is the direct link between 2 or 3 ports with mostly daily departures (e.g. Tallinn – Helsinki) and on the other hand the looped service similar to the container services, including several ports on long distances with mostly weekly departures (e.g. Finnlines’ North Sea service connecting the Baltic Sea with UK).
Figure 25: Scheduled RoRo services in the Baltic Sea Region, 2011/2012
Source: Baltic Transport Outlook 2030, base year 2011
There are 34 RoRo and ferry operators which are providing regular ferry services in the Baltic Sea area through the employment of 189 RoRo/RoCon/RoPax vessels and a total capacity of
25 Source: www.globalsecurity.org/military/systems/ship/ro-ro-history.htm Page 85 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 4.56 million GT. The average vessel size operating in the Baltic Sea is estimated to 24,100 GT. As relevant to the selected Amber Coast ports, 11 operators with regular RoRo services have been identified, serving the area with 76 vessels (2.16 mio. GT).
Table 38: RoRo & RoPax ferry line operators with callings at selected Amber Coast in alphabetic order, 2012/2013 Hamina St. # Operator Helsinki Klaipeda Riga Tallinn Ventspils -Kotka Petersb. 1 DFDS Seaways X X 2 Eckerö Line X X 3 Finnlines X X X X 4 Mann Lines X X 5 St. Pete Line X X X X 6 Stena Line X X 7 Tallink X X X 8 Transfennica X X 9 UECC X X X 10 UPM Seaways X X 11 Viking Line X X Source: SIA "NK konsultāciju birojs" derived from Baltic Transport Journal 2012 / 2013 RoRo ferry routes at the selected ports are trade-flow (inner European cargo) and system oriented. The ports connectivity depends on ferry operators’ decision on route choice, the geographical situation of the port, and the hinterland access. Key focus lays here on exploring fully the advantages of the RoRo system – a fast and smooth loading / discharging operation. Based on published schedules of the ferry operators, average transit time in days and the frequency per week have been elaborated. In raw cases where no published information was available, the potential transit time has been calculated considering an average vessel speed of 20 knots and 0.5 days handling time at each port. However, it must be acknowledged, that these are theoretical figures only as often the vessel speed is adjusted to match the scheduled service.
Table 39: Key characteristics of RoRo ferry links related to selected Amber Coast ports, 2012/2013 Amber Coast Avg. transit time Linked Port Operators Distance in Nm Port (days) Amsterdam 3 1,183 3.5 Antwerp 8 1,315 3.7 Bilbao 3 1,933 5.0 Bremerhaven 9 1,091 3.3 Cuxhaven 9 766 2.6 Ferrol 10 1,933 5.0 Hamina-Kotka Gdynia 4, 8, 9, 10 486 2.0 Harwich 4, 10 1,243 3.6 Hull 3, 10 1,219 3.5 Immingham 3 1,212 3.5 Luebeck 3, 8 684 2.4 Paldiski 8 125 1.5 Rostock 3, 10 642 2.3 Page 86 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Amber Coast Avg. transit time Linked Port Operators Distance in Nm Port (days) Rouen 10 1,479 4.1 Santander 4, 10 1,910 5.0 Soedertalje 4 337 1.7 Southampton 9 1,414 3.9 St. Petersburg 3, 4, 8, 9, 10 112 1.2 Tilbury 8 1,295 3.7 Travemunde 3 673 2.4 Ust-Luga 3 122 1.3 Ventspils 3 296 1.6 Wallhamn 3, 9 773 2.6 Zeebrugge 3, 4, 9 1,262 3.6 Aarhus 3 663 2.4 Amsterdam 3 1,183 3.5 Antwerp 3 1,254 3.6 Bilbao 3 1,872 4.9 Hull 3 1,158 3.4 Immingham 3 1,151 3.4 Helsinki Mariehamn 7, 11 185 1.4 Rostock 3 580 2.2 St. Petersburg 3, 5 171 1.4 Stockholm 5, 7, 11 237 1.5 Tallinn 2, 5, 7, 11 48 1.1 Travemunde 3 611 2.3 Zeebruegge 3 1,201 3.5 Aarhus 1 429 1.9 Frederica 1 468 2.0 Klaipeda Karlshamn 1 223 1.5 Kiel 1 397 1.8 Sassnitz 1 280 1.6 Riga Stockholm 7 266 1.6 Amsterdam 3 1,263 3.6 Antwerp 3 1,395 3.9 Bilbao 3 2,013 5.2 Bremerhaven 9 1,171 3.4 St. Petersburg Ferrol 10 2,013 5.2 Gdynia 10 561 2.2 Hamina-Kotka 3, 4, 8, 10 112 1.2 Hanko 8, 9 228 1.5 Harwich 4, 10 1,323 3.8
Page 87 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Amber Coast Avg. transit time Linked Port Operators Distance in Nm Port (days) Helsinki 3, 5 171 1.4 Hull 3, 10 1,299 3.7 Immingham 3 1,292 3.7 Karlshamn 1 591 2.2 Kiel 1 778 2.6 Luebeck 3, 8 762 2.6 Nynäshamn 6 402 1.8 Rauma 8, 10 444 1.9 Rostock 10 721 2.5 Rouen 10 1,559 4.3 Santander 10 1,990 5.1 Sassnitz 3, 8 680 2.4 Stockholm 5 385 1.8 Tallinn 5 187 1.4 Ventspils 8 376 1.8 Wallhamn 9 855 2.8 Zeebruegge 3 1,342 3.8 Bremerhaven 9 1,009 3.1 Hamina-Kotka 9 105 1.2 Helsinki 2, 5, 7, 11 48 1.1 Tallinn Mariehamn 7 180 1.3 Stockholm 5, 7 217 1.5 St. Petersburg 5, 9 187 1.4 Wallhamn 9 692 2.4 Stockholm 5 179 1.4 Tallinn 5 210 1.4 Ventspils Travemunde 6 416 1.9 Zeebruegge 3 1,004 3.1 Source: SIA "NK konsultāciju birojs" derived from Baltic Transport Journal 2012 / 2013
3.1.3 Overland transport profiles Besides the maritime transport leg the overland transport accessibility and connectivity is a major decisive part within the transport chain for choosing a specific port. Overland transportation as link to the economic regions identified in chapter 1.3 Trade pattern and cargo flows of this study (hinterland) is considered as the pre-/ and on-carriage of containerized cargo or cargo by truck using a RoRo ferry. Whereas the land transport mode for container shipments can be by road or rail, RoRo related cargo is considered as transported only by road, even though in reality trailers may also be transported by rail. However, for the region this is considered as not being relevant.
Page 88 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Road transport corridor profile The status quo of road infrastructure, transport corridors and future network as important for freight transportation within the region are described in chapter 2.2 Road infrastructure of this study. In the following the most likely operational routing of truck transportation in connection with the Amber Coast ports has been drafted and defined as overland transport corridors. They will serve as framework for the simulation of sample shipments being done in chapter 3.2 Simulation of sample shipments.
Figure 26: Overland road routing options from/to port hinterland incl. feeder connections
Source: SIA "NK konsultāciju birojs" The road transportation market in the region is highly fragmented, consisting of a large number of small local players and several subsidiaries of international players. Taking the geographical extend into account, it can be assumed that the market as relevant for intermodal transportation is being served by over 7,000 trucking companies and freight forwards with over 800,000 trucks.26 The following Table 40 illustrates the 34 potential overland transport corridors incl. estimated transit times and border crossing. Naturally, freight transportation by truck is not tied to schedules. For the economic regions with an own port (i.e. Riga, Tallinn, and St. Petersburg), the local haulage has been estimated with a 20 km radius and 0.5 h transit time.
Table 40: Road transport corridors incl. distance, estimated transit time and border crossing, 2012/2013 Distance road Transit Time Amber Coast Port Economic region Border Crossing in km road in hs Moscow 958 18.2 Vaalimaa (FI/RU) Hamina-Kotka Novgorod 1,393 23.8 Vaalimaa (FI/RU) St. Petersburg 253 4.8 Vaalimaa (FI/RU)
26 Sources: Statistics Latvia, Statistics Lithuania, Statistics Estonia, Statistics Finland, Eurostat Page 89 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Distance road Transit Time Amber Coast Port Economic region Border Crossing in km road in hs Moscow 1,103 20.9 Vaalimaa (FI/RU) Helsinki Novgorod 1,538 26.3 Vaalimaa (FI/RU) St. Petersburg 398 7.6 Vaalimaa (FI/RU) Daugavpils 418 13.1 --- Kaunas/Vilnius 216 6.5 --- Minsk 494 14.1 Medininkai (LT/BY) Klaipeda Moscow 1,192 22.6 Terehova (LV/RU) Novgorod 1,615 27.6 Terehova (LV/RU) Riga 310 10.0 --- Daugavpils 224 7.0 --- Kaunas/Vilnius 264 8.0 --- Minsk 484 13.8 Medininkai(LT/BY) Riga Moscow 922 17.5 Terehova (LV/RU) Novgorod 1,346 23.0 Terehova (LV/RU) Tartu 245 7.0 --- Moscow 703 13.3 --- St. Petersburg Novgorod 1,117 19.1 --- Moscow 1,056 20.0 Narva (EE/RU) Novgorod 1,479 25.3 Narva (EE/RU) Tallinn St. Petersburg 365 6.9 Narva (EE/RU) Tartu 186 5.3 --- Daugavpils 378 11.8 --- Kaunas/Vilnius 413 12.5 --- Minsk 619 17.7 Medininkai (LT/BY) Ventspils Moscow 1,081 20.5 Terehova (LV/RU) Novgorod 1,532 26.2 Terehova (LV/RU) Riga 159 4.8 --- Tartu 430 12.3 --- Source: SIA "NK konsultāciju birojs"
Rail transport corridor profile As for the road infrastructure, details for status quo and future network of rail infrastructure have been described in chapter 2.3 Rail infrastructure. The market of scheduled block trains from a port to a specific economic region is well defined. In total 5 operators were identified serving seven overland transport corridors of the previously identified 34.
Page 90 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Figure 27: Overland rail routing options (scheduled block trains) from/to port hinterland
Source: SIA "NK konsultāciju birojs" Besides the scheduled block train connections, customers have the possibility to order and/or organize on demand individual block trains directly with national rail companies, larger logistic service providers, and sometimes even with the shipping agent. The ports of Hamina-Kotka, Helsinki, and Ventspils do not have scheduled rail connections and thus are not included in the following table.
Table 41: Train operating companies with scheduled block trains at selected Amber Coast in alphabetic order, 2012/2013
# Operator Klaipeda Riga St. Petersburg Tallinn
1 EVR Cargo X 2 LDz Cargo Logistika X 3 LG X 4 TFS Trans X 5 TransContainer X X Source: SIA "NK konsultāciju birojs" derived from Baltic Transport Journal 2012 / 2013 The general cost advantage of rail transportation compared to road transportation starts at a distance of approximately 1,100 km27. As such shuttle trains are in operation between key Amber Coast ports Klaipeda, Riga, and Tallinn as well as St. Petersburg and the metropolitan regions of Kaunas/Vilnius, Minsk and Moscow with further connection possibilities up to Odessa and Central Asia. The following table provides an overview about the key characteristics of rail transport corridors.
27 Source: Study „Russian Rail, Containers, and Growth“ by AT Kearney, 2012 Page 91 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Table 42: Rail transport corridors incl. operator, distance, estimated transit time and border crossing, 2012/2013 Transit Amber Coast Economic Distance rail Operators Time rail in Border Crossing Port region in km hs Kaunas/Vilnius 3 348 7.7 --- Klaipeda Minsk 3 565 12.4 Kena (LT/BY) Moscow 3 1,289 28.4 Zilupe (LV/RU) Kraslava-Indra Minsk 2 635 14.0 Riga (LV/BY) Moscow 4, 5 987 21.7 Zilupe (LV/RU) St. Petersburg Moscow 5 649 14.3 --- Tallinn Moscow 1 1,004 22.1 Koidula (EE/RU) Source: SIA "NK konsultāciju birojs"
3.1.4 External cost and MARPOL The increased awareness for external costs and CO2 foot prints and the implementation of the IMO MARPOL regulation in the Baltic Sea will further influence transport flows, routings and selection of transport mode. Whereas MARPOL does effectively generate additional costs for users of the transport corridor, external costs still have a calculative and informative character.
External cost For the purpose of this study, the external costs of transport28 have been estimated using the Marco Polo Program indicative values per ton-kilometre by transport mode. The external transport costs as per recent studies suggested (HEATCO, IMPACT) are understood to comprise of the following main categories:
Congestion / value of time; Accidents; Air pollution; Climate change; Noise; Up and downstream processes; and Soil and water pollution.
The recommended values for external transport cost per ton-kilometre have been applied to arrive at an approximate measure of the external costs per route option on the respective relations. Based on the assigned mode, the km length of each section and the average weight of the cargo (12.8 ton per container), the external cost of transport has been estimated for each route considering following values:
EUR 0.035 /ton-kilometre for road transport; EUR 0.015 /ton-kilometre for rail transport; EUR 0.009 /ton-kilometre for sea transport.
The external impact of the sea, rail and road transport is considered to be same as European averages on all the route length.
28 External transport costs reflecting the non-monetised transport impact on the influence areas; some extent of the external costs may be already internalised due to specific measures by mode
Page 92 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Due to missing consensus about values and its sole informative character, the comparison of transport external costs by routes using different transport modes may be only taken as an indication.
MARPOL The Baltic Sea has been declared as SECA area (Sulphur Emission Control Area) including as well North Sea and the English Channel with the objective to control and reduce shipboard garbage and emission of SOx and NOx gases gradually in a predetermined time frame. With the renewed IMO MARPOL (International Convention For the Prevention Of Pollution From Ships) Annexes IV, V and VI which are due to enter in force in 2013 and 2015, new requirements regarding disposal of garbage and emission have been set. Whereas Annexes IV and V mainly regulate the treatment of garbage and residues, Annex VI regulates the maximum allowed sulphur content in fuel. As from 2015 onwards, the Baltic Sea as SECA area will have to lower sulphur limits from currently 1% to 0.1%.29
Figure 28: IMO defined sulphur limits in % and implementation time frame
Source: SIA "NK konsultāciju birojs" derived from International Maritime Organization The whole topic of sulphur limits has caused a lot of discussion among industries within the EU in recent years. There are strong proponents who believe that implementation of the resolution is going to cause a certain shift from sea to land-based transportation modes. Cost effects per vessel type that may occur with the implementation of MARPOL Annex VI are illustrated in the following table.
Table 43: Cost effect of MARPOL Annex VI Consumption per Cost per vessel Cost per vessel Vessel type Cost difference vessel (2011) 2011 2015 RoPax 11,783 5,918,346 8,195,688 2,277,342 RoRo 6,173 3,100,369 4,293,371 1,193,002 Container 2,718 1,365,161 1,890,467 525,305 Car Carrier 2,310 1,160,443 1,606,973 446,531 General Cargo 710 356,466 493,632 137,166 Train ferry 394 197,897 274,047 76,150 Source: SIA "NK konsultāciju birojs" derived from International Maritime Organization
29 Source: www.imo.org Page 93 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 As the implementation of these limits will cause an increase of investments and additional costs, short-sea shipping lines are already charging their customers a special Low Sulphur Surcharge (LSFS) which is in the range of EUR 9,- per TEU. This surcharge has been considered as well within total maritime costs used for the simulation that has been done in the next chapter.
3.2 Simulation of sample shipments Although RoRo holds a major share of intermodal transportation within the Baltic Sea Region, the simulation of dry and reefer container shipments along the transport corridors have been given priority as container market environment promises expressive growth rates within the coming 20 years especially in hinterland locations like Moscow/Novgorod and Minsk.
Objective of the simulation of sample shipments along the transport corridors is the identification and assessment of all cost and lead time involved during the transport and in a users’ point of view. It therefore allows the identification of transport services and routings that offer a customer a clear and distinctive benefit in comparison to a competing routing.
In order to deal with the volatility in demand and the high short and medium term fluctuations in the supply/demand balance, shipping lines and other transport providers seek ways to secure a stable revenue stream. One instrument which is often used in practice is the mid- to long-term freight agreement or service contracts with shippers, ports, etc. These agreements for transport services between carriers and shippers are on a time-volume basis where shippers commit the provision of a minimum cargo over a fixed period of time. Carriers on the other hand commit a certain and fixed price and service level.
In the context of this study and as basis for the simulation, a powerful virtual set of freight agreements and service contracts along the corridors has been developed and systematically stored. To produce results which are as realistic as possible, all necessary information has been obtained through extensive research, quotation requests by partner companies, and evaluation of derived and calculated data through an external shipping expert and market insider with special focus on reflecting the mid- to long-term elasticity of market cost and performances.
All relevant data has been put into a database (Annex 1) which at the same time serves as simulation tool, as further described in chapter 3.2.1 General approach. Actual results of the simulation are presented in chapter 3.2.2 Dry and Reefer container transport on selected corridors.
It must be however acknowledged, that although all efforts have been done to reflect the reality as much as possible, results and findings of the simulation have to be considered as an indication only.
3.2.1 General approach To simulate transports along selected corridors under a users’ point of view (e.g. freight forwarder, shipper, big industry / trader with constant volumes) requires a large pile of operational and market data, information that often is only accessible to people who are actively involved in daily shipping business and which comes from various different sources. Furthermore, a certain operational and administrational know-how of the transport business is required to put all the obtained information into the right context. During this study a database has been built up that currently includes all information necessary to simulate container shipments along the corridors, including:
Page 94 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 11 regions / metropolitan region and their effective and possible interconnection: Daugavpils, Kaunas/Vilnius, Klaipeda, Minsk, Moscow, Novgorod, Riga, St. Petersburg, Tallinn, Tartu, and Oversea.
17 ports (hub and outports) and their effective and possible interconnection: Aarhus, Antwerp, Bilbao, Bremerhaven, Felixstowe, Gothenburg, Hamburg, Helsinki, Klaipeda, Hamina-Kotka, Le Havre, Riga, Rotterdam, St. Petersburg, Tallinn, Tilbury, and Ventspils.
8 feeder operators (quotation / tariffs, surcharges, schedules).
8 deep-sea carrier (THC for ports)
2 truck companies (quotation / tariffs, timing) / currently no rail operators included
Rates and timing for 2 dry container sizes (DV20’, DV40’) and 2 reefer container sizes (RE20’, RE40’).
2,720 transport corridor options (container type <-> hub <-> outport <-> region).
External cost per transport mode.
In the process of data evaluation and manipulation, sensitive or commercially confidential data has been neutralized (especially freight quotations) and data gaps have been replaced by calculated numbers, whereas calculation has been done considering an operational and realistic approach in the regional context with support of an external shipping and market expert. This step further allows the simulation of shipments on corridors where no current data is available or where corridor is not being used actively by market players (e.g. corridor through Ventspils).
Even though capable to simulate options and transport alternatives in more detail, it has been decided to limit simulation within this study to total average cost and lead time for main parts of the transport corridor (inbound and outbound) considering the virtual shipment of a 20’ dry and 20’ reefer container along 6 principle corridors with 26 cargo routing options as presented in the following table.
Table 44: Simulation framework – cost and time of transport corridors hub port mode Amber Coast port mode economic region / hinterland Moscow/Novgorod Hamina-Kotka St. Petersburg Moscow/Novgorod Helsinki St. Petersburg Daugavpils Kaunas/Vilnius Antwerp / Klaipeda Minsk Bremerhaven / <- feeder -> <- truck -> Moscow/Novgorod Hamburg / Rotterdam Riga Daugavpils Kaunas/Vilnius Minsk Riga Moscow/Novgorod Riga Tartu
Page 95 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 hub port mode Amber Coast port mode economic region / hinterland Moscow/Novgorod St. Petersburg St. Petersburg Moscow/Novgorod Tallinn St. Petersburg Tartu Daugavpils Kaunas/Vilnius Minsk Ventspils Moscow/Novgorod Riga Tartu Source: SIA "NK konsultāciju birojs"
The transport corridors in principle have been divided into 3 parts (maritime, port, hinterland) and an add-on for external costs which facilitate and structure further analysis and simulations.
Key information considered for the maritime short sea leg consists of:
Avg. freight (BOF) in EUR; Avg. bunker (BAF) in EUR; Avg. low sulphur surcharge (LSFS) in EUR; Avg. winter surcharge in EUR; ISPS in EUR; Optional: avg. IMO surcharge for dry container in EUR; Transport lead time in days; Distances in km and nm.
Data related to ports includes:
Avg. transhipment costs per container type and per North Sea hub in EUR; Avg. terminal handling charge (THC) at port of loading (POL) and port of discharge (POD) in EUR; Avg. port lead time in days / fixed to 2 days for each port.
Cost and timing assumptions for the hinterland are based on:
Avg. freight in EUR (only road transportation); Avg. handling cost in EUR; Avg. hinterland lead time in hours Distances in km External costs per transport mode (short sea, truck, or rail) have been applied optional to each corridor, with values elaborated in chapter 3.1.4 External cost and MARPOL.
Cargo and trade related costs such as insurances, taxes, cost for import / export, documentation, financing etc. have been disconsidered from analysis. Lead times for border controls have been smoothen by using same calculated border time for all ports in question. The lead time of ports which includes demurrage, storage etc. have been set to 2 days equal to all the ports, a more exact time share would require more detailed analysis of different terminals within a specific port.
Page 96 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 3.2.2 Dry and Reefer container transport on selected corridors The high level view on total average cost and timing values for each inbound and outbound shipment along all connected corridors of a port serve as perfect introduction to the further detailed analysis per individual corridor further below in this chapter of the report.
Overall, the total average transport cost for a 20’ container between Northern European hub port and Amber Coast hinterland locations or vice versa is about EUR 2,000 and takes 8.3 days. By adding a calculative external cost, this value will increase to in average EUR 2,486.50. However, in order to compare different transport corridors with each other, a more detailed analysis per corridor is necessary following the framework as set in Table 41: Simulation framework – cost and time of transport corridors.
In principle there are 2 main directions of shipments, namely the region Moscow / Novgorod and the clustered region Minsk (including Daugavpils and Kaunas / Vilnius as being half-way from/to Minsk). The total cost and time as presented in the following tables arising from the individual waypoints along the researched corridors, following the same structure as exemplary drafted in Figure 29. For all corridors the hub ports Antwerp, Bremerhaven, Hamburg, and Rotterdam are considered as the most feasible ones.
Figure 29: Example average cost (EUR) and timing (days) per TEU for inbound shipments via the port of Hamina-Kotka to Moscow/Novgorod region
Source: SIA "NK konsultāciju birojs"
The following Table 45 provides the average cost and timing for shipments ex hub ports Antwerp, Bremerhaven, Hamburg, and Rotterdam to the economic region of Moscow and Novgorod.
Table 45: Total average cost (EUR) and timing (days) per TEU for inbound shipments to Moscow/Novgorod avg. total transport cost incl. avg. total transport cost avg. total outport external cost lead time dry TEU reefer TEU dry TEU reefer TEU Hamina-Kotka 2,775.28 3,308.61 3,506.34 4,039.67 8.5
Helsinki 2,831.87 3,449.22 3,616.39 4,233.75 9.5
Klaipeda 3,076.32 3,643.65 3,854.79 4,422.11 8.3
Riga 2,702.28 3,199.37 3,388.24 3,885.33 8.6
St. Petersburg 2,130.39 2,603,73 2,757.43 3,230.77 8.8
Tallinn 2,880.45 3,383.86 3,637.34 4,140.75 9.4
Page 97 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 avg. total transport cost incl. avg. total transport cost avg. total outport external cost lead time dry TEU reefer TEU dry TEU reefer TEU Ventspils 2,899.43 3,422.42 3,641.40 4,164.38 8.2
Overall avg. 2,756.58 3,287.27 3,485.99 4,016.68 8.8 Source: SIA "NK konsultāciju birojs"
At this level, transport corridor costs through the ports Klaipeda, Tallinn and Ventspils are on the higher side, whereas transport costs through the port of St. Petersburg is the cheapest option. The fastest connection between hub ports and Moscow/Novgorod region is achieved through ports of Klaipeda and Ventspils, transports via Helsinki and Tallinn take the longest.
Table 46 provides the average cost and timing for shipments ex hub ports Antwerp, Bremerhaven, Hamburg, and Rotterdam to the clustered region of Minsk including Daugavpils and Kaunas / Vilnius.
Table 46: Total average cost (EUR) and timing (days) per TEU for inbound shipments to Minsk region (incl. Daugavpils, Kaunas/Vilnius) avg. total transport cost incl. external avg. total transport cost avg. total outport cost lead time dry TEU reefer TEU dry TEU reefer TEU Klaipeda 1,514.83 1,723.02 1,832.98 2,041.17 7.3
Riga 1,467.90 1,682.98 1,790.98 2,006.06 8.0
Ventspils 1,618.78 1,832.35 1,985.99 2,199.56 7.7
Overall avg. 1,533.84 1,746.12 1,869.98 2,082.26 7.7 Source: SIA "NK konsultāciju birojs" The clustered region of Minsk, Daugavpils, and Kaunas/Vilnius is served cheapest through the port of Riga, the more expensive option is through the port of Ventspils. However, differences in costs are relatively low between the analysed 3 options. With in average 7.3 days the option through the port of Klaipeda is the fastest whereas the option through the port of Riga takes the longest with in average 8 days.
Transport corridors from / to Daugavpils The metropolitan region of Daugavpils can be served by transport corridors through the ports of Klaipeda, Riga, and Ventspils. The region is a remote location in the South of Latvia and close to the border with Belarus. However, development status of region is poor with low industry density and actual freight flows are limited, as well as the growth prediction until 2030. Among the 3 corridors in question, the corridor via Riga provides the cheapest transport link between region and hub ports, with an average cost of EUR 1,332.80 per DV20’ and EUR 1,505.23 per RE20’, mainly due to cost advan tages on the overland link.
The cost of hinterland transportation puts Klaipeda on the more expensive side, with an average cost of EUR 1,591.07 per DV20’ and EUR 1,772.11 per RE20’. Even though not being an active transport link, the corridor through Ventspils is positioned in the mid-field, with a calculated average cost of EUR 1,499.12 per DV20’ and EUR 1,662.45 per RE20’. The cost for inbound
Page 98 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 cargo and outbound cargo is on the same level, cost for potentially positioning of empty container is not considered.
Figure 30: Cost share in EUR for inbound cargo (dry or reefer TEU) from hub via outport to Daugavpils
Source: SIA "NK konsultāciju birojs" Although the corridor through Riga is the most economic one in terms of transport costs, it is the slowest connection with an average of 7.8 days for inbound cargo and 8 days for outbound cargo. Klaipeda on the other hand is the fastest connection with an average of 7.3 days for inbound cargo and 7.7 days for outbound cargo.
Figure 31: Average lead time share in days for inbound cargo to Daugavpils
Source: SIA "NK konsultāciju birojs" Lead times for inbound and outbound cargo differ slightly, which is the result of different position of the port within the scheduled feeder loop. The corridor through Ventspils currently without existing scheduled feeder services, is expected to end up in the midfield of average lead times, considering a similar integration of the port as today valid for Riga and Klaipeda.
Page 99 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Figure 32: Average lead time share in days for outbound cargo ex Daugavpils
Source: SIA "NK konsultāciju birojs"
Transport corridors from / to Kaunas/Vilnius Located in the South-East of Lithuania, the metropolitan region of Kaunas and Vilnius is well placed between Belarusians’’ capital Minsk and the port of Klaipeda. The region is a dynamic growth region, well developed and the main economic centre of Lithuania. In practice, the port of Klaipeda is the principle gateway for cargo from and to Kaunas/Vilnius, however in theory it is conceivable that the region is served by 3 transport corridors, through the port of Klaipeda, Riga, and Ventspils.
Naturally, the corridor via Klaipeda is most economic, with an average cost of EUR 1,290.75 per DV20’ and EUR 1,448.91 per RE20’, followed by the corridor via Riga with an average cost of EUR 1,392.00 for a DV20’ and EUR 1,569.23 for a RE20’. The corridor through Ventspils could be considered as the more expensive alternative, with an average cost of EUR 1,550.92 (DV20’) and EUR 1,718.45 (RE20’) respectively.
Figure 33: Cost share in EUR for inbound cargo (dry or reefer TEU) from hub via outport to Kaunas/Vilnius
Source: SIA "NK konsultāciju birojs" The favourable geographic location of Klaipeda also causes a significant time advantage compared to average lead times of the corridors through Riga and Ventspils. It takes in average 7 days for inbound cargo and 7.4 days for outbound cargo on the Klaipeda corridor. The corridor through Riga is the slowest connection with an average of 7.8 days for inbound cargo and 8.1 Page 100 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 days for outbound cargo, corridor option through Ventspils could result in average lead time of 7.5 days for inbound and 7.7 days for outbound cargo.
Figure 34: Average lead time share in days for inbound cargo to Kaunas/Vilnius
Source: SIA "NK konsultāciju birojs" The structure of lead times for outbound cargo is the same as for inbound cargo, however with more time needed for export shipments out of Kaunas/Vilnius
Figure 35: Average lead time share in days for outbound cargo ex Kaunas/Vilnius
Source: SIA "NK konsultāciju birojs"
Transport corridors from / to Minsk Minsk as capital of Belarus promises a strong growth of container volumes until 2030, however in a dynamic and challenging environment. A huge factor of growth is its geographical location which extends the transport corridor Klaipeda-Kaunas/Vilnius and is half-way on the East and South corridors Klaipeda-Moscow/Novgorod and Klaipeda-Odessa.
Even though Klaipeda in the first instance seems to be the only reasonable corridor from and to Minsk, certain competition through corridors of the ports of Riga and Ventspils can be assumed. Page 101 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 In terms of average cost the corridors through Klaipeda and Riga are on the same level, with an average cost of EUR 1,662.67 per DV20’ / EUR 1,945.85 per RE20’ for Klaipeda and EUR 1,678.88 per DV20’ / EUR 1,974.47 per RE20’ for Riga. A potential corridor alternative through the port of Ventspils may have slightly higher average costs with EUR 1,806.28 for a DV20’ and EUR 2,116.14 for a RE20’.
Figure 36: Cost share in EUR for inbound cargo (dry or reefer TEU) from hub via outport to Minsk
Source: SIA "NK konsultāciju birojs" The corridor lead time for inbound cargo is in favour of Klaipeda with an average of 7.6 days, followed by potentially Ventspils with 8.1 days and Riga with 8.4 days.
Figure 37: Average lead time share in days for inbound cargo to Minsk
Source: SIA "NK konsultāciju birojs" The same corridor lead time structure applies to outbound cargo which takes in average 7.6 days on the Klaipeda corridor, possibly 8.1 days on the Ventspils and 8.4 days on the Riga corridor.
Page 102 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Figure 38: Average lead time share in days for outbound cargo ex Minsk
Source: SIA "NK konsultāciju birojs" It must be noted that cargo transportation on the Minsk corridor involves border controls. The theoretical time spent at border has been assigned equally to each port with the consequence that corridors are not competing through a potentially faster border crossing in this simulation. Also the existence of unfair competition as well as possible influence on cargo routing through political decisions has not been considered as impact on costs and time is difficult to estimate.
Transport corridors from / to Moscow/Novgorod The economic development of the region Moscow/Novgorod is the growth driver for the whole region. Due to its central hinterland location, theoretical all selected ports could serve as gateway for in- and outbound cargo. However, as Russian government considers the dependency on foreign port capacities as a threat, certain instruments were implemented to steer at least the majority of export container through the own port of greater St. Petersburg. Ambitious infrastructure development projects (e.g. Ustj-Luga) further will add capacity to the market, however, it is foreseen that alternative transport corridors options especially for import container will be required also in the long-term, even more when they are more economic and add value to the transported products.
Out of the 7 analysed corridor options, St. Petersburg is by far the cheapest option with an average cost of EUR 2,130.39 for a DV20’ and EUR 2,603.73 for a RE20’ container. The second cheapest option is the corridor through Riga with average costs of EUR 2,702.28 per DV20’ and EUR 3,199.37 per RE20’ container, followed by Ventspils and Tallinn. The most expensive option is the corridor through Klaipeda, with an average cost of EUR 2,759.07 per DV20’ and EUR 3,260.83 per RE20’.
Page 103 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013
Figure 39: Cost share in EUR for inbound cargo (dry or reefer TEU) from hub via outport to Moscow/Novgorod
Source: SIA "NK konsultāciju birojs" The winter surcharge which is applicable only for the corridor through St. Petersburg has been applied to maritime costs for this corridor on a yearly average. As the region is heavily surplus in the container trade (much more inbound than outbound cargo), the availability of empty containers and the requirement of shipping lines having back empty container in hub ports may provide certain significant discounts on outbound freights. It also leads to the scenario, that containers are being used for lower value cargo or even bulk cargo. However, such discounts have not been considered during the simulation of outbound costs, which are slightly lower compared to inbound costs.
The fastest corridor option for inbound cargo would be through the port of Ventspils with an average lead time of 8.2 days and through Klaipeda with an average lead time of 8.3 days. Much longer takes the transport through corridors of Helsinki and Tallinn, with lead times of 9.5 days and 9.4 days respectively.
Figure 40: Average lead time share in days for inbound cargo to Moscow/Novgorod
Source: SIA "NK konsultāciju birojs" In respect of outbound cargo, the corridors through St. Petersburg and Tallinn have the longest average lead time with 9.4 days and 9.7 days respectively. Fastest also for outbound cargo are Ventspils with 8.4 days, Klaipeda with 8.7 days and Riga with 8.8 days. Page 104 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013
Figure 41: Average lead time share in days for outbound cargo ex Moscow/Novgorod
Source: SIA "NK konsultāciju birojs" Similar to transport corridor from / to Minsk, also this corridor involves border controls with time impact distributed equally to each port in question. Existence of unfair competition and influence of political framework is only indirectly considered even though difficult to estimate.
Transport corridors from / to Riga Riga as capital of Latvia is considered to be the main economic centre of the Baltic States and provides a good economic environment with strong growth expectations of the local market and connected hinterland. The metropolitan area with its own port acts as transit gateway for in- and outbound cargo especially related Moscow/Novgorod region. For local cargo the corridor through the port of Riga is the most logical one, however, in theory also transport corridors through Klaipeda and Ventspils may offer an interesting alternative.
With an average transport cost of EUR 1,061.28 for a DV20’ and EUR 1,210.83 for a RE20’ the corridor through Riga is the cheapest option, however, costs the corridor through Ventspils eventually could compete with, as the difference is rather small (approx. EUR 100,-). Much more expensive is the average cost for the corridor through Klaipeda with EUR 1,436.07 per DV20’ and 1,664.41 per RE20’.
Figure 42: Cost share in EUR for inbound cargo (dry or reefer TEU) from hub via outport to Riga
Source: SIA "NK konsultāciju birojs"
Page 105 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Somehow surprisingly the lead time for inbound cargo through Riga is the longest with an average of 7.7 days. Klaipeda and Ventspils are significantly faster with in average 7.1 days and 7.2 days respectively.
Figure 43: Average lead time share in days for inbound cargo to Riga
Source: SIA "NK konsultāciju birojs" For outbound cargo, the corridor through Ventspils would be with average 7.4 days the fastest option, followed by Klaipeda with 7.6 days and Riga with 7.9 days.
Figure 44: Average lead time share in days for outbound cargo ex Riga
Source: SIA "NK konsultāciju birojs"
Transport corridors from / to St. Petersburg Similar to Riga, also the metropolitan region of St. Petersburg has strong growth expectations for the local market and connected hinterland which is basically the metropolitan region Moscow/Novgorod. The region is well connected through its own port, however, certain competition is being provided by corridors through Hamina-Kotka, Helsinki, and Tallinn. The corridor through St. Petersburg is the only one where winter surcharge on the maritime leg applies. This surcharge has been considered on a yearly average.
Page 106 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 The cheapest corridor option is through the port of St. Petersburg with an average cost of EUR 1,130.39 for a DV20’ and EUR 1,358.71 for a RE20’ container. Tallinn is more expensive with an average cost of EUR 1,526.70 per DV20’ and 1,879.27 per RE20’. The most expensive corridor option is through the port of Helsinki with costs reaching in average EUR 2,421.04 for a DV20’ and EUR 2,792.29 for a RE20’ container.
Figure 45: Cost share in EUR for inbound cargo (dry or reefer TEU) from hub via outport to St. Petersburg
Source: SIA "NK konsultāciju birojs" Inbound cargo to St. Petersburg fastest will arrive on the corridor through Hamina-Kotka with an average lead time of 7.8 days, followed by St. Petersburg with 8.3 days. Transport on the corridor through Helsinki requires the longest lead time with 8.8 days.
Figure 46: Average lead time share in days for inbound cargo to St. Petersburg
Source: SIA "NK konsultāciju birojs" In respect of lead times for outbound cargo, the corridor through Hamina-Kotka still is the fastest option together with the corridor through Helsinki, both within average 8.4 days. The corridor through Tallinn has with 9 days the longest lead time for outbound cargo.
Page 107 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Figure 47: Average lead time share in days for outbound cargo ex St. Petersburg
Source: SIA "NK konsultāciju birojs"
Transport corridors from / to Tartu Last corridors analysed are the ones connecting the metropolitan region of Tartu which strategically is located between Riga and Tallinn. Growth expectations for the region are positive, however, total volume of container trade is on the lower side.
The cheapest transport corridor goes through the port of Tallinn with an average cost of EUR 1,258.20 for a DV20’ and EUR 1,530.58 for a RE20’. The corridor through Riga is only slightly more expensive (approx. EUR 100), the most expensive corridor option goes through Ventspils with average costs of EUR 1,584.68 per DV20’ and EUR 1,933.98 per RE20’.
Figure 48: Cost share in EUR for inbound cargo (dry or reefer TEU) from hub via outport to Tartu
Source: SIA "NK konsultāciju birojs" Fastest connection for inbound cargo to the region of Tartu is the corridor option through the port of Ventspils with an estimated average of 7.5 days. Riga follows with 7.8 days and the corridor through Tallinn has the longest lead time with 8.3 days.
Page 108 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013
Figure 49: Average lead time share in days for inbound cargo to Tartu
Source: SIA "NK konsultāciju birojs" Also for outbound cargo, the corridor through Ventspils would be within average 7.7 days the fastest option, followed by Riga with 8 days and Tallinn with 8.6 days.
Figure 50: Average lead time share in days for outbound cargo ex Tartu
Source: SIA "NK konsultāciju birojs"
3.3 Business community feedback
3.3.1 Introduction The Study work plan included direct communication with main users of the eastern ACL ports - regular container and RoRo shipping lines. The online Survey on competitiveness of intermodal ports in the Klaipeda – Helsinki port range was selected as a form of communication to increase
Page 109 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 number of communicated stakeholders. The Survey methodology, presented to the Client, aimed:
to enforce results of research by investigation of opinion of clients of the ACL range ports; to better perform SWOT analysis and recommendations.
The Questionnaire included total of 18 questions covering 3 fields of interest: (1) General assessment of the port range; (2) The ports; (3) Hinterland services. Each criterion was evaluated by giving score in range from 1 to 10.
The online survey instrument guaranteed full anonymity. 23 invitations were sent to main container and RoRo shipping lines, calling eastern ACL ports, 8 eligible responds were received.
3.3.2 Summary of the results Summarising the results - total average score, given to intermodal transport chain via ports of the range is 6,0. The Figure 51 below well demonstrates overall opinion of port clients about transport and logistics performance in the eastern ACL port range and their hinterland by given criteria.
Figure 51: Business community feedback: Average scores for each of the criteria
Source: SIA "NK konsultāciju birojs" Legend to the Figure 51 above:
Abbreviation Definition LOCATION GEOGRAPHICAL LOCATION (convenience of geographical location of particular port in respect of dominating areas of destination for cargo of the clients) NAUT ACC NAUTICAL ACCESSIBILITY (the channel navigability and it’s stability, terminal accessibility) PINFR GENERAL PORT INFRASTRUCTURE PSECC PORT SECURITY/SAFETY
Page 110 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 PCOSTS GENERAL PORTS COSTS (Efficiency and costs of port management and administration, auxiliary services such as pilotage, towage, customs, availability, quality and costs of port community systems etc.) P-LINTERF PORTLAND INTERFACE (Access through the city; quality of rail and road transport services inside in the port) PTERMARR PORT TERMINAL ARRANGEMENT (Availability of terminals in a port; terminal infrastructure, superstructure, technologies, dwell time; level of service etc.) PTERMCOST PORT TERMINAL COSTS VASERV VALUE ADDED SERVICES (In a port or close to it; e.g. warehouse services) ROADH ROAD TRANSPORT TO MAIN NECRESSARY DESTINATIONS. RAILH RAIL TRANSPORT TO MAIN NECESSARY DESTINATIONS BLTRAIN BLOCK TRAINS, SHUTTLE SERVICES TO MAIN NECESSARY DESTINATIONS INTTERM INTERMODAL TERMINALS FOR CARGO MODAL TRANSFER OUTSIDE THE PORTS LOGC LOGISTICS CENTRES BCP EU LAND BORDER CROSSING ACCEPTABILITY SYNERGY COOPERATION AND SYNERGY IN THE NETWORK (Willingness of the various actors involved in a transport chain to tune operations to the customer’s requirements)
All port performance indicators are ranked higher than the overall transport chain score (6,0), especially – port security and safety, nautical accessibility of ports, port terminal infrastructure and port-land interface. Good scores (higher than 6,0) are given also for the “soft” efforts of the transport chain stakeholders: cooperation with clients and organization of border crossing points.
On the other hand lower scores are given for capacity and performance of the intermodal network behind the ports: rail hinterland connections, organization of block trains, intermodal terminals and logistics centres.
Results of the Survey underline main findings and issues that emerged/appeared from findings of the infrastructure assessment and from the simulation of sample shipments along corridors.
Page 111 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013
4 SWOT – Analysis for selected transport corridors A company acting on a free market needs to offer a product with clear characteristics which constitute an advantage for a customer, compared to competing products. At the same time the company has to strive for a profit in order, not only to survive, but also to grow. The effective positioning of a service and infrastructure provider within the transportation network requires a clear self-understanding and awareness of own weaknesses and strengths, and always a spot on opportunities and possible threats, the same is valid for transport corridors. The port as a service provider is an important knot within the transportation network where port services as such only differing slightly, more important are location and lead times, as well as the cost for up-/ and downstream transportation activities. Building on this, the following chapter summarizes all previous findings and main results including results of survey in individual SWOT analysis for selected transport corridors considering the current situation and outlook for 2030.
4.1 Amber Coast Ports and Belarus Belarus as land-locked country does not have own water access and such relies on port facilities of its neighbouring countries Latvia and Lithuania.30 The ports of Klaipeda, Ventspils, and Riga therefore are key gateways for Belarusian foreign trade flows with BSR and outside Europe. The transport corridors connected to these ports have been further assessed in the following and within the context of this study.
4.1.1 Klaipeda – Belarus corridor
Strengths Shortest total distance to Belarus, well developed rail border crossing; Fastest lead time for import container, 2nd fastest for export container; Cheapest corridor option; Port of Klaipeda ice-free status, good nautical accessibility Developed intermodal infra- and service structure (RoRo and containerized cargo); Well connected feeder and ferry network; shuttle train to Minsk via Kaunas/Vilnius, both rail gauges (1.520 and 1.435); High diversity of feeder operators with high frequency to key hub ports (i.e. Antwerp, Bremerhaven, Hamburg, and Rotterdam); Good variety of ferry links to Denmark, Sweden, and Germany; Rail ferry to Germany (1.520 rail gauge) as exceptional advantage; Only direct container feeder connection to Le Havre; Basic load on corridor due to combined volumes of Kaunas/Vilnius and Minsk.
Weaknesses Monopolistic situation within ferry operation – one single operator on all directions; Insufficient capacities of road border crossing point (Medininkai); Disparities between SMGS and CIM as bottleneck for effective rail transportation; Unbalanced container flows (full in / empty out for all container sizes); Limited coverage of public logistic centres and intermodal terminals along corridor.
30 Note: Kaliningrad is not included in this assessment Page 112 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Opportunities Positive economic environment (Lithuania with relatively low inflation rate, shift to a more knowledge-based economy / Belarus with highly educated workforce, low unemployment level); Similar key trading partners of Lithuania and Belarus (e.g. Russia, Germany, Netherlands, and UK); Expected EUR introduction in the short-term in Lithuania; Positive trade developments and projections along corridor ; Corridor interconnection – established transit route and shuttle train via Minsk to Moscow and Odessa, access to China railway.
Threats Strong decline of population and labour force; Relatively low labour productivity; High dependency on Russian import cargo, thus on Russian economic development; Limited access to external financing resources; Unfair competition partly caused through ongoing shadow economy and corruption; Insufficient, under developed infrastructure in Belarus; 2 political systems (EU and communistic system in Belarus).
Outlook 2030 Capacity increase and expansion of port activities in the mid- to long-term (2 principal capacity expansion projects: Smelte terminal as distribution hub of MSC, Butinge outer port); Implementation of shuttle trains to Odessa, Moscow and Kazakhstan/China to foster East-West transport corridor; Construction of 4 public logistic centres along the corridor until 2030. Rail Baltica may create additional cargo for shuttle trains along corridor (esp. Vilnius); With implemented SECA, shorter maritime link in terms of costs more competitive as Riga and Ventspils; Increased competition through corridor Riga-Belarus; 2030 almost 99% of all Russian container exports may be handled at own ports, a certain share of import containers still going through Baltic States ports as logistic solutions are more favourable and more competitive.
4.1.2 Riga – Belarus corridor
Strengths Well developed rail border crossing; Fastest lead time for export container; 2nd cheapest corridor option; Port of Riga ice-free status; good expansion possibilities Developed intermodal infra- and service structure (esp. containerized cargo); High diversity of feeder operators with high frequency to key hub ports (i.e. Antwerp, Bremerhaven, Hamburg, and Rotterdam); Well connected feeder network; shuttle train to Minsk; both rail gauges (1.520 and 1.435); Significant local freight market (Riga) and basic load on corridor through volumes of Daugavpils or alternatively Kaunas/Vilnius.
Page 113 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Weaknesses Longest total distance; Slowest transport lead time for import container; Most expensive corridor option for dry container; Ferry links in the corridor are weakly developed (only one service to Stockholm); Operational bottlenecks and insufficient infrastructure at Riga rail/port interfaces; Relatively high average maritime voyage time for import container (HUB-Riga); Insufficient capacities of road border crossing points (Silene, Medininkai); Disparities between SMGS and CIM as bottleneck for effective rail transportation; Relatively unbalanced container flows (full in / empty out for all container sizes); Limited coverage of public logistic centres and intermodal terminals along corridor.
Opportunities Close trading relations along corridor (Belarus, Latvia, Lithuania) and similar key trading partners of Latvia and Belarus (e.g. Russia, Germany, Netherlands, Poland); Introduction of EUR in Latvia possible in the short-to mid-term; Positive trade developments and projections along corridor, access to remote areas (e.g. Daugavpils); Corridor interconnection – established transit route and shuttle trains to Moscow and Odessa, access to China railway.
Threats Decline of population, high inflation rate; Certain dependency on Russian import cargo, thus on Russian economic development; Demanding economic environment with key challenge on insufficient and under developed transport infrastructure; Limited access to external financing resources; Unfair competition partly caused through ongoing shadow economy and corruption; Traffic jams in Riga resulting in extra cost and time; Direct competition on ferry link (Stockholm) through Ventspils; Strong competitive scenario for RoRo transport with Ventspils corridor; Stagnating economic development situation at Daugavpils; Winter conditions - even though ice free status, partly frozen maritime access to the port may impact reliability of corridor.
Outlook 2030 Capacity increase through extension of container terminal; Rail/port interfaces improved, bottlenecks removed; Rail Baltica may create additional cargo for shuttle trains on corridor; With implemented SECA, longer maritime link in terms of cost less competitive as Ventspils; Very strong competition through corridor Klaipeda-Belarus; 2030 almost 99% of all Russian container exports may be handled at own ports, a certain share of import containers still going through Baltic States ports as logistic solutions are more favourable and more competitive.
Page 114 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 4.1.3 Ventspils – Belarus corridor
Strengths Well developed rail border crossing; 2nd fastest lead time for import and container; Port of Ventspils ice-free status, good nautical accessibility; Good developed intermodal infra- and service structure (esp. RoRo cargo); Well connected ferry network to Sweden, Estonia, Germany, and Belgium with high frequency; Good diversity of ferry operators; Flexibility in container operation (e.g. block trains on demand, available terminal and land area); Significant expansion possibility at port of Ventspils.
Weaknesses Not integrated in container feeder network (no scheduled services at Ventspils); Only one container / RoRo terminal operator; Insufficient capacities of road border crossing points (Silene, Medininkai); Disparities between SMGS and CIM as bottleneck for effective rail transportation; Limited coverage of public logistic centres along corridor; Weak local market (Ventspils) and strong competition from especially Riga corridor.
Opportunities Close trading relations along corridor (Belarus, Latvia, Lithuania) and similar key trading partners of Latvia and Belarus (e.g. Russia, Germany, Netherlands, Poland); Positive growth in intra BSR trade (i.e. increase of RoRo demand); Introduction of EUR in Latvia possible in the short-to mid-term; Positive trade developments and projections along corridor (e.g. Riga, Kaunas/Vilnius), possibly access to remote areas (e.g. Daugavpils); Corridor interconnection – theoretical access to shuttle trains to Moscow and Odessa, access to China railway via Kaunas/Vilnius and Minsk; Traffic jams in Riga – corridor may act as evasive route in case of peaks.
Threats Decline of population, high inflation rate; Demanding economic environment with key challenge on insufficient and under developed transport infrastructure; Limited access to external financing resources; Strong competitive scenario for container transport with Riga corridor;
Outlook 2030 High development potential of the industrial area along corridor.
Rail Baltica may create additional cargo for shuttle trains along corridor (esp. ex Riga); With implemented SECA, shorter maritime link in terms of cost more competitive as Riga; Very strong competition through corridors Klaipeda-Russia and Riga-Russia; 2030 almost 99% of all Russian container exports may be handled at own ports, a certain share of import containers still going through Baltic States ports as logistic solutions are more favourable and more competitive. Page 115 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013
4.2 Amber Coast Ports and Russia Russia in the frame of this analysis is considered to be mainly the economic cluster Moscow / Novgorod as St. Petersburg region has its own dynamics with no direct competition to selected ports of the Amber Coast, except Tallinn to a certain extend. Due to its central geographical location and so far insufficient own port capacities in St. Petersburg and Ustj-Luga, especially Finish ports and ports of the Baltic States are main transit gateways for Russian cargo – a highly competitive environment. In the following, transport corridors connected to the ports of Klaipeda, Riga, Tallinn, and Ventspils have been further assessed.
4.2.1 Klaipeda – Russia corridor
Strengths Shortest total distance together with Riga and Ventspils; Well developed rail border crossing; 2nd fastest lead time for import and export container; Port of Klaipeda ice-free status, good nautical accessibility Developed intermodal infra- and service structure (RoRo and containerized cargo); Well connected feeder and ferry network; shuttle train to Moscow via Kaunas/Vilnius and Minsk, both rail gauges (1.520 and 1.435); High diversity of feeder operators with high frequency to key hub ports (i.e. Antwerp, Bremerhaven, Hamburg, and Rotterdam); Good variety of ferry links to Denmark, Sweden, and Germany; Rail ferry to Germany (1.520 rail gauge) as exceptional advantage; Only direct container feeder connection to Le Havre; Basic load on corridor due to combined volumes of Kaunas/Vilnius, Minsk, Moscow and Novgorod.
Weaknesses Highest overall corridor costs; Monopolistic situation within ferry operation – one single operator on all directions; Disparities between SMGS and CIM as bottleneck for effective rail transportation; Unbalanced container flows (full in / empty out for all container sizes); Insufficient capacities of road border crossing point (Terehova); Limited coverage of public logistic centres and intermodal terminals along corridor.
Opportunities Positive economic environment dominated by economic development of Russia, strong trading activities between both countries; Lack of container terminal capacity in Russia; Expected EUR introduction in the short-term in Lithuania; Positive trade developments and projections along corridor (i.e. Kaunas/Vilnius, Minsk); Corridor interconnection – established transit route and shuttle train via Minsk to Odessa, access to China railway.
Threats Strong decline of population and labour force;
Page 116 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Relatively low labour productivity; Unfair competition partly caused through ongoing shadow economy and corruption; Insufficient, under developed infrastructure in Russia; Strong competition with Riga corridor; Russian national transport policy (especially impact on export container) along with skill and capacity development at St. Petersburg and Ustj-Luga.
Outlook 2030 Capacity increase and expansion of port activities in the mid- to long-term (2 principal capacity expansion projects: Smelte terminal as distribution hub of MSC, Butinge outer port); Implementation of shuttle trains to Odessa, Moscow and Kazakhstan/China to foster East-West transport corridor. Rail Baltica no direct influence but may create additional cargo for shuttle trains along corridor; With implemented SECA, shorter maritime links become in terms of costs more competitive; Increased competition through corridor Riga-Russia; 2030 almost 99% of all Russian container exports may be handled at own ports, a certain share of import containers still going through Baltic States ports as logistic solutions are more favourable and more competitive.
4.2.2 Riga – Russia corridor
Strengths Shortest total distance together with Klaipeda and Ventspils; well developed rail border crossing; Cheapest corridor option; Port of Riga ice-free status; good expansion possibilities; Developed intermodal infra- and service structure (esp. containerized cargo); Well connected feeder network; shuttle train to Moscow; both rail gauges (1.520 and 1.435); High diversity of feeder operators with high frequency to key hub ports (i.e. Antwerp, Bremerhaven, Hamburg, and Rotterdam); 2 train operators serving the market, good organization of block trains; Straight transit corridor.
Weaknesses 2nd slowest transport lead time for import and export container; Ferry links in the corridor are weakly developed (only one service to Stockholm); Operational bottlenecks and insufficient infrastructure at Riga rail/port interfaces; Insufficient capacities of road border crossing point (Terehova); Disparities between SMGS and CIM as bottleneck for effective rail transportation; Unbalanced container flows (full in / empty out for all container sizes); Limited coverage of public logistic centres, especially in Riga region.
Opportunities Increasing over-sea trade (especially imports) of Russia, positive economic development of city of Riga; Lack of container terminal capacity in Russia;
Page 117 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Corridor interconnection – established transit route and shuttle trains to Minsk and Odessa, access to China railway.
Threats Decline of population, high inflation rate; Unfair competition partly caused through ongoing shadow economy and corruption; Insufficient, under developed infrastructure in Russia; Russian national transport policy (especially impact on export container) along with skill and capacity development at St. Petersburg and Ustj-Luga; Limited access to external financing resources; Traffic jams in Riga resulting in extra cost and time; Direct competition on ferry link (Stockholm) through Ventspils; Strong competitive scenario for RoRo transport with Ventspils corridor; Winter conditions - even though ice free status, partly frozen maritime access to the port may impact reliability of corridor.
Outlook 2030 Capacity increase through extension of container terminal; Rail/port interfaces improved, bottlenecks removed; Rail Baltica may create additional cargo for shuttle trains on corridor; With implemented SECA, longer maritime links become in terms of costs less competitive; Increased competition through corridor Klaipeda-Russia; 2030 almost 99% of all Russian container exports may be handled at own ports, a certain share of import containers still going through Baltic States ports as logistic solutions are more favourable and more competitive.
4.2.3 Tallinn – Russia corridor
Strengths Shortest land distance to highly developed market of St. Petersburg; Developed intermodal infra- and service structure (RoRo and containerized cargo); Good spirit and solution oriented cooperation along corridor; Well connected feeder network; shuttle train to Moscow; both rail gauges (1.520 and 1.435); High diversity of feeder operators with high frequency to key hub ports (i.e. Antwerp, Bremerhaven, Hamburg, and Rotterdam); Well connected ferry network to Sweden, Finland, and Germany with high diversity of ferry operators and frequency; Developed network of RRK logistic parks
Weaknesses Longest total distance to Moscow / Novgorod; Slowest transport lead time for import and export container; 2nd most expensive corridor option together with Ventspils; Insufficient capacities of road border crossing point (Narva) to St. Petersburg region (very narrow border crossing through one bridge); Disparities between SMGS and CIM as bottleneck for effective rail transportation; Unbalanced container flows (full in / empty out for all container sizes); Limited coverage of intermodal terminals along corridor.
Opportunities Positive trade developments and projections along corridor (e.g. Tartu);
Page 118 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Corridor interconnection – established transit route and access to China railway.
Threats Decline of population, high inflation rate; Unfair competition partly caused through ongoing shadow economy and corruption; Winter conditions - partly frozen maritime access to the port may impact reliability of corridor; Strong competition from well developed Finish ports; Russian national transport policy (especially impact on export container) along with skill and capacity development at St. Petersburg and Ustj-Luga.
Outlook 2030 Ongoing planning and construction works in industrial areas at Muuga and Paldiski harbours; Rail Baltica may influence transport pattern within corridor (provision 2023), port of Tallinn may establish additional rail ferry service to Helsinki (in case no tunnel will be built), or may have to consider major expansion as intermodal hub; Ustj-Luga ultimate capacity of 3 million TEUs most likely achieved by 2025; 2030 almost 99% of all Russian container exports may be handled at own ports, a certain share of import containers still going through Baltic States ports as logistic solutions are more favourable and more competitive; for deep-sea container, corridor will be more focused on St. Petersburg import cargo (from Helsinki and/or Tallinn by truck).
4.2.4 Ventspils – Russia corridor
Strengths Shortest total distance; ice-free status and well developed rail border crossing with Russia; Fastest total lead time; Good developed intermodal infra- and service structure (esp. RoRo cargo); Well connected ferry network to Sweden, Estonia, Germany, and Belgium with high frequency; Good diversity of ferry operators; Flexibility in container operation (e.g. block trains on demand, available terminal and expansion capacity); Significant expansion possibility at port of Ventspils.
Weaknesses Not integrated in container feeder network (no scheduled services at Ventspils); Only one container / RoRo terminal operator Insufficient capacities of road border crossing point (Terehova); Disparities between SMGS and CIM as bottleneck for effective rail transportation; Limited coverage of public logistic centres along corridor; Weak local market (Ventspils) and strong competition from especially Riga corridor.
Opportunities Increasing over-sea trade of Russia (especially imports); Lack of container terminal capacity in Russia; Positive growth in intra BSR trade (i.e. increase of RoRo demand); Corridor interconnection – theoretical access to shuttle trains to Minsk and Odessa, access to China railway via Kaunas/Vilnius and Minsk; Traffic jams in Riga – corridor may act as evasive route in case of peaks.
Page 119 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 Threats Insufficient, under developed infrastructure in Russia; Russian national transport policy (especially impact on export container) along with skill and capacity development at St. Petersburg and Ustj-Luga; Limited access to external financing resources; Strong competitive scenario for container transport with Riga corridor.
Outlook 2030 Rail Baltica may create additional cargo for shuttle trains along corridor (esp. ex Riga); With implemented SECA, longer maritime links become in terms of costs less competitive; Very strong competition through corridors Klaipeda-Russia and Riga-Russia; 2030 almost 99% of all Russian container exports may be handled at own ports, a certain share of import containers still going through Baltic States ports as logistic solutions are more favourable and more competitive.
5 Recommendations for possible synergies between Eastern Baltic’s ports As final part of this Study, recommendations for possible synergies were elaborated mainly based on findings from infrastructure assessment (Chapter 2), performed calculations (Chapter 3) and SWOT analysis (Chapter 4).
Since the key beneficiary of the Study should be all partners of the ACL project, following recommendations are not elaborated for specific partner or institution, but they are targeted to address needs that ACL project partners have in common, so target audience for the recommendations of possible synergies are the ACL project partners as a whole and their perspective collaboration.
The issues tackled in the Study are large scale by nature and go beyond borders of one particular partner, so in order to address them and reach synergies, it is suggested to establish a long-term collaborative approach in form of a project or a platform. The selection process of users regarding a specific transport corridor for example is a complex topic which involves various key factors such as port efficiency, geographical location, low port and transport charges, adequate infrastructure, wide range of services, connectivity, among others. Results of this study and especially the simulation of sample shipments provide important indications on certain aspects, but would not allow detailed actions and thus recommendations for a specific party.
At the end of the day an executive institution would be necessary to seek for synergies between the logistics players in the ACL catchment area, to process and evaluate all finding of this but as well up- and downstream Studies within the ACL project and support and coordinate the implementation of these thereof.
Following are the recommendations for possible synergies between Eastern Baltic’s ports:
1. Implementation of a joint workshop philosophy and establishment of a long term communication platform to foster cooperation and coordination of key stakeholders and authorities along corridors (ACL project may act as initiator, e.g. ACL association, ACL logistic cluster, Baltic Sea Forum), key topics:
Page 120 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013 1.1. Joint forces to smooth the “Sulphur Directive” for the Baltic Sea; 1.2. Coordination of efforts in the process of construction of the Rail Baltica (e.g. intermodal terminals and logistics centres at intersections of 1435 - 1520 rail gauges); 1.3. Joint policies in TEN-T development (e.g. Baltic - Adriatic Corridor No 1; Motorways of the Sea (MOS); 1.4. Actively support initiatives related to maintenance and operation of Nord-Ostsee-Kanal (NOK).
2. Common efforts should be used to develop infrastructure along the corridors (ports, intermodal terminals and logistics centres, border crossing points), including:
2.1. Elaboration of Concept for Logistic Centres development in the ACL catchment area (e.g. similar GVZ in Germany); 2.2. Raise awareness of Public sector regarding the role of Logistics Centres, gain of Public support of development of Logistic Centres; 2.3. Evaluate possibilities of the implementation of Public Private Partnership financing approach in development of new Logistic Centres; 2.4. Launch of the study in this case would be an advantage.
3. Fostering the cooperation between hinterland logistic service providers and hub ports (e.g. common strategic planning, full service packages)
4. Improved consumption of all existing formats and instruments for cooperation between EU/Baltic countries and Russia/Belarus (EU and international programmes, international organizations, cross border projects etc.). e.g. harmonization of statistics, establishment of common Key Performance Indicators (KPI).
5. Due to huge impact of hinterland transportation possibilities on smooth container movements in the region, it is important to have common efforts and aligned strategy for development of rail infrastructure and rail services:
5.1. Explore and promote shuttle rail service to remote destinations (e.g. achievement of higher frequency through common coordination);
5.2. Acceleration of negotiations on SMGS and CIM harmonization.
6. Increasing cooperation with governmental and private stakeholders in Russia, Belarus, Central Asia, development of common projects (e.g. through intergovernmental workgroups; through involvement of associations and other organizations).
7. Improvement of road border crossing point (BCP) capacities within ACL catchment area (e.g. road BCP Lithuania/Belarus, Narva etc.).
8. Maintain current cost advantage comparing to Finnish and Russian ports, focus on hinterland competition.
Page 121 of 122
Market Potential and Competition Analysis for selected ports of the Amber Coast Final Report, date: 02/04/2013
6 List of Appendixes Appendix A – Study database (Electronically)
Page 122 of 122