LOGISTICS POSSIBILITIES FOR BUSINESS COOPERATION WITH DENMARK

ANDRIS MALDUPS Director of the Transit Policy Department, Ministry of Transport of the Republic of Latvia

OUTLINE

• General overview on cargo transit development

• Container train development

• Latvia – distribution center

• Road transport

• Aviation

• Format 16+1

LATVIA IN MULTIMODAL CORRIDORS OUR TREASURE - 3 ICE FREE PORTS Ventspils Advantages: • Freeport statuss • Tax advantages for investments • Free land plots available • Up to 17 meters deep

Liepaja FREEPORT AND SEZ STATUS

Freeport and Special Economic Zone status provides for substantial tax reductions up to 55% of investments made:

Direct taxes • Income tax 80% • Real estate duty 80-100% Indirect taxes • Value added tax 100% • Excise tax 100% • Customs duty 100% CARGO TURNOVER in Latvian ports 2006-2016 (million t)

75.2 74.2 68.8 70.4 69.6 62.4 63.6 63.1 59.5 61.9 61.2

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 CARGO STRUCTURE in Latvian ports in 2016

roll on/roll of 4% wood products metals 5% 2% chemicals 6% liquid gas grain building materials 7% 1% coal 1% 27% containers 7%

ore other 2% 7% oil products 30% turf 1% SEA CONNECTIONS

Port of Riga Port of Ventspils Port of Liepaja Containerships Stena Line Stena Line Riga –Teesport – Thamesport - Rotterdam – Nynäshamn-Ventspils-Nynäshamn Travemünde – Liepaja – Travemünde Zeebrugge - Lubeck - Helsinki – St. Petersburg – Klaipeda – Aarhus UniFeeder Container Service Rotterdam – Hamburg/Bremerhaven – Riga – Klaipeda-Gdynia/Gdansk X-PRESS container lines Riga - Ust-Luga – Kotka – Helsinki – Tallinn - Hamburg Hapag-Lloyd AG Gdynia – Klaipeda – Riga – Tallina – Rauma – Hamburg – Bremerhaven Mediterranean Shipping Company (MSC) Antwerpen – Bremerhaven – Riga – Tallinn Maersk Line / Seago Line Gdansk– Bremerhaven- Hamburg – Gdansk - Kaliningrad – Riga – Gdansk Tallink Riga – Stockholm Other lines - OOCL, CSCL, Evergreen, etc. using services of common feeders

CONTAINERISED CARGO TURNOVER in Latvian ports 2006-2016 (TEU)

385,665 391,218 377,484 366,824 359,756

305,939

236,351 256,271 229,248 198,876 184,399

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 RAILWAY SYSTEM BENEFITS

1520

1520 mm – common railway gauge with Russia, Mongolia and CIS countries

Benefits: There is no need: • single infrastructure • to spend time at border-crossing • single rolling stock • to change wheels • unified information • to change the documentation exchange system • to make customs clearance on the border • single documentation

CARGO TURNOVER in Latvian railways 2006-2016 (million t)

59.4 60.6 56.1 55.8 57 55.6 52.2 53.7 48.7 49.2 47.8

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 CARGO STRUCTURE in Latvian railways in 2016

Oil and oil products 34.76%

Ferrous metals 3.75%

Grain 3.55%

Fertilizers 8.10%

Wood products 3.29% Coal Chemicals Other 34.14% Containers 2.78% 8.23% 1.40% SPECIALIZED CONTAINER TRAINS CONTAINER TRAIN BALTICA TRANSIT • Established in 2003 • Connects Baltics with Central Asia (Kazakhstan, Uzbekistan, Turkmenistan, Kirgizstan and Afganistan • Operated by FESCO (LDz Cargo Logistika)

Advantages: • regular service 2-3 times a week • 13 years experience • collects cargo from all Baltic ports • short transit times • tracking and tracing online • electronic priarival declaration • simplified customs transit procedures

Riga - Alma-Ata 12 days Next steps: Ashabad 18 days Bishkek 13 days • Connections with China Dushanbe 18 days • Main market – Urumqi city and Xinjiang region • Distribution in the Baltics and Scandinavia Tashkent 17 days Hairaton 16 days CHINA-EUROPE LAND CORRIDOR CHINA-EUROPE LAND CORRIDOR

Advantages using China – Europe rail

• Delivery time 14 days • Track and trace systems • North European market • Simple customs procedures • Regular service • Temperature - 25C to +25C • Low lead times YIWU-RIGA PILOT TRAIN RIGA-KASHGAR PILOT TRAIN NORTHERN DISTRIBUTION NETWORK

NORTHERN DISTRIBUTION NETWORK • Launched in 2009 • NDN has developed in to multimodal transport corridor using all transport modes: rail, road, air, and sea • Most of cargo were shipped for the US to Afganistan • Since 2010 road transport has been involved on regular bases • Since 2012 air transport has been involved on regular bases

• Riga including port and airport as the main hub of the NDN • Fully recognized by the US and NATO partners • Total cargo volumes trasshipped by NDN reached 100 000 containers in June 2013 CONTAINER TRAIN ZUBR

• Launched in 2009 • Railway companies from 5 countries: Latvia, Belarus, Ukraine, and Moldova • operators: Latvia: LDz Cargo Loģistika SIA; Belarus: BELINTERTRANS (BTLC State Enterprise), Estonia: AS EVR Cargo, Ukraine: UGCTS „Liski”, Moldova: „ Union ekspeditie SRL „)

Cargo delivery route Delivery time

Tallinn - 83 hours or 3 days 11 Odessa/Chornomorsk hours

Riga - 66 hours or 2 days 18 Odessa/Chornomorsk hours

Odessa/Chornomorsk 63 hours or 3 days 15 - Riga hours

Odessa/Chornomorsk 83 hours or 3 days 11 - Tallinn hours CONTAINER TRAIN ZUBR

Main facts and advantages:

• Route: Tallinn – Riga – – Kiev – Odessa/Chornomorsk (Estonia – Latvia – Belarus – Ukraine); • Possible cargo deliveries from/to Scandinavian countries via Latvian ports and Tallinn port and from/to the Caucasian countries and Turkey via Ilyichivsk and Odessa ports; • The train carries 20, 40 and 45 feet universal and special containers; • Fixed and reliable transportation rates. Delivery time; • Convenient service from door to door, necessary equipment and additional services like customs formalities, documentation handling, cargo tracking and tracing. Main markets for Development:

• Black sea region: Turkey, Georgia, Azerbaijan and connections over Caspian sea to Kazahstan and Turkmenistan • On the north – Baltic and Scandinavian countries: Latvia, , Estonia, Finland Sweden, Denmark, Poland and Germany

CONTAINER TRAIN - RIGA EXPRESS

CONTAINER TRAIN RIGA EXPRESS

• Since 2010 private rail operator SRR started weekly container service on the route Riga – Moscow

• Full package of services such as rail transportation, customs clearance, door to door deliveries, FCL, LCL and project cargo transportation included

Advantages: • Fast and fixed/predictable transit time, average railway transit time from Riga Port to Moscow is 72 hours, depending on the railway traffic (Moskva Tovarnaya Oktabrskaya r/w Station) • Crossing borders with no queues • Customs clearance of the whole rain directly on the railway station takes 24 – 36 hours with no need for • No weight limits warehouse • No truck demurrage • Immediate unloading on arrival

• Door-to-door deliveries

Services: . Transshipment; DISTRIBUTION . Consolidation; 48 hours . Repackaging of distribution of goods to goods; stores and retail chains of . Customs clearance; . Storage of customs Northern Europe goods and EU 26.4 million consumers goods; . Monitoring the status of cargo. DISTRIBUTION SERVICE

DISTRIBUTION SERVICE

26,4 million consumers reachable within 48 hours • Latvia is perfectly located to provide logistic and distribution services in Baltics and Scandinavia; • Within 24 hours goods can be delivered to any customer in the Baltic states and even till Helsinki, Stockholm and ; • In 48 hours we provide deliveries to any consignee within Scandinavia with total consumer market 26.4 million people; • We can use any type of transport: road, rail, sea and air; • Wide range of customs warehouses, logistic centers, forwarding companies available.

Import through customs warehouses: • Entry of goods into the EU without paying customs duty and VAT on the borders • Transportation under customs control to the customs warehouses or free zones in Latvia • Storage of goods under customs control (selling and buying operations allowed) ROAD TRANSPORT

ROAD TRANSPORT • Developed road transport sector in Latvia.

• Complies with all necessary international rules and procedures

• Modern road transport fleet

• Both: bilateral permits and ECMT permits available

• Easy transportation within European Union

RIGA – A REGIONAL LEADER IN AVIATION

• Government of Latvia owns 100% RIX • Aviation – a strategic industry for Latvia • Pax growth (2004-2016): 1M → 5,4M • Geographic advantage / Hub-and-spoke strategy / Gateway to Single European Sky • Infrastructure development • New pax terminal, support infrastructure • Cargo aviation • Strategic investor for airBaltic ROAD TRANSPORT

CARGO OPERATIONS AT RIGA AIRPORT

Cargo market share in the Baltics 7 cargo airlines 4 warehouse operators 20+ Thousand tonnes annually

CARGO ROUTE A330-200F

Days of the Departure Route Flight No Arrival UTC Week UTC IST -RIX 6573 4 11:00 13:35 RIX -IST 6573 4 15:05 16:50 IST -RIX 6577 6 11:00 13:35 RIX -IST 6577 6 15:05 16:50 ROAD TRANSPORT

CARGO OPERATIONS AT RIGA AIRPORT

Airlines providing cargo operations at Riga airport E-commerce partners ROAD TRANSPORT

CARGO OPERATIONS AT RIGA AIRPORT

Airport charges comparison for B747- 8F MTOW 448t (€)

AIR BALTIC

airBaltic – Latvian national airline

 State holds 80.05% of shares

 7th largest Regional airline in Europe (according to «Airline Business»)

 World`s most punctual airline in 2014 and 2015 (accorging to OAG aviation data monitors)

 Around 60 destinations

 New fleet - Bombardier CS 300 FORMAT 16+1 Cooperation format between China and 16 Central and Eastern European countries

LITHUANIA • 2016 –1st Transport Ministers' Meeting and Business conference in Riga, May 16-17 • 2016 – Prime Ministers Summit in Riga, November 5-6 • 2017 – 1st Focal Point meeting

Latvia has established a Secretariat on Logistics Cooperation between CEEC and China and performs functions of coordination in the field of logistics format 16 + 1

Web-page: www.ceec-china-logistics.org

CONTAINER TRAIN ROUTES THANK YOU FOR YOUR ATTENTION!

www.sam.gov.lv