RIGA - From the days of the Hansiatic league, the Baltic states have long been the meeting place of Russia and Europe. Today the region's integration in the EU has escalated the Baltic states' geographic role in transport between the two trading regions. Road, rail, sea and air cargo handling have all seen a boom in turnover since the Baltics joined the EU in 2004, but future opportunities can only be harvested if the investments in infrastructure are made now.
The largest transit challenge right now is managing increased passenger and freight travel. Soviet transit infrastructure was heavily reliant on rail. Conversely, trade in Europe - where inventories were managed by just-in-time inventory principles, not five-year economic plans - favors trucks. Thus the long lines on the Latvian and Estonian borders with Russia demonstrate what happens when modern European logistics meet outdated infrastructure and customs systems.
When this article went to press there were over 1,000 trucks waiting at Latvia's Terehova checkpoint and 320 vehicles at Grebneva. The congestion began in August after Russian President Vladimir Putin targeted contraband and Belarus introduced a new, unpredictable regulatory environment on goods coming from the EU.
The result - stricter enforcement - created lines of trucks further than the eye can see. Haulers are frustrated, local residents are angry, and Baltic leaders don't know what to do.
To share its headache, Latvia began screening trucks coming from Lithuania prior to the NATO summit, thereby creating a line on the border 's and hence, within the European Union. Lithuanians reacted bitterly, and Latvian Foreign Minister Artis Pabriks was forced to put a spin on the accusations.
"The problem is not on the Lithuanian-Latvian border, but the root of the problem is that people and vehicles cannot cross the Russian border as Russia, for some reason, is not able to deal with these issues," Pabriks was quoted as saying.
Truck drivers are increasingly angry, and several have gathered to protest the situation.
"What do they think - my work day, for example, is nine hours long, and I have spent eight hours here," explained Antti, 37, an Estonian trucker. "It is absolute anarchy. I came from Germany, and I have been stuck here for eight hours already. It's nonsense - in Germany I have seen queues of 25 kilometers, but it never took longer than 4-5 hours. And here the line is four kilometers, but it moves very slowly."
Oil on the rails
The traditional rail links that pass through the Baltic states from Russia primarily carry crude, coal and mineral fertilizers. Since the crude oil pipeline to Ventspils ran dry in 2003, crude has been delivered by rail and then loaded onto tankers.
Latvijas Dzelzcels (Latvian Railway), carried 44.7 million tons of cargo during the first 11 months of this year, down 10.7 percent from the same period in 2005. Import shipments were down by 11.4 percent when compared with the same period last year, reflecting the preference of truck over rail for getting goods to and through the Baltic states.
Like the previous year, oil and oil products made up most of the cargo turnover in January-November, totaling 16 million tons.
During the first 10 months of this year, cargo turnover at Baltic ports grew 4.4 percent or 4.9 million tons to 116 million tons, according to Latvia's Central Statistics Office. Of all the cargo handled at Baltic ports during the period, 43.3 percent was reloaded in Latvia, 35.6 percent in Estonia and 21.1 percent in Lithuania. In January-October 2005 Baltic ports handled a total of 111 million tons of cargo.
Latvian ports showed the slowest growth in cargo turnover in the 10-month period - 0.3 percent - with Estonia at 7.4 percent, and Lithuania at 8.4 percent.
Tallinn led all the Baltic ports with a January-October cargo turnover of 34.1 million tons, a 4.8 percent rise year-on-year. Latvia's Ventspils ranked second with 24.3 million tons, and Riga Free Port followed with 21.7 million tons of cargo, up 6.6 percent from the first 10 months in 2005.
Air travel soars
The combination of EU accession, the large amount of Balts seeking work in the EU and tax discounts attracting low-cost airlines to the Baltic states has sparked an explosion in air travel. The low cost routes have served as a new outlet for discount tourists and prodded airlines to open new routes in the east, particularly in major cities of the former Soviet Union.
The Latvian based airBaltic, which is a joint venture between SAS (47.2 percent) and the Latvian government (52.6 percent) and operates in all three Baltic states, has seen its passenger rate rise by 39 percent from January-November of this year. The number of flights jumped 25 percent. AirBaltic now serves 33 direct routes from Riga and 12 direct routes from Vilnius. It recently launched flights between Kaliningrad and Copenhagen.
"Kaliningrad is an important business center in the Baltic Sea region. Our strategy is to connect Riga and Vilnius with all the key cities in this region and ensure as frequent air service as possible," airBaltic said in a press release.
Increased air travel, economic growth, and the availability of EU structural funds for infrastructure development all add up to make the Baltic states a dynamic place to live and do business in the 21st century. The further modernization of their existing transit infrastructure, combined with EU projects such as the Via Baltica highway and the Rail Baltica rail project will have the Baltic states strengthening their Hansiatic role in the new Europe.
