The Baltic states lack abundant natural resources of the type that can be mined and sold, and there are few niche products for which the Balts have an outstanding reputation. As a result, the three nations have effectively come to rely on their valuable location 's with easy access to both Russia and the Baltic sea 's to build a large part of their economies around transport services. The main Baltic ports have become an integral part of the countries' future economic outlook. This week's Industry Insider takes a look into this important sector of the Baltic economies, examining its vulnerability to changes in international politics and how the ports are making use of emerging technologies to improve efficiency.
RIGA - In their quest to create a "gateway to the east," Baltic politicians often discuss the importance of developing Baltic ports into a main avenue for transport between the European Union and Russia. This effort has proven to be more than just empty political promises 's the Baltic states have invested heavily in their ports and have extensive plans to continue to do so in the future.
"The port of Klaipeda is highly important to the Lithuanian economy; it is ever renovating, changing and opening greater possibilities," a representative of the Klaipeda port told The Baltic Times. "Both its geographical position and the fact of being a transit sea country can help Lithuania become an ideal 'gateway' into international markets," she said.
The three main Baltic ports 's located in Tallinn, Klaipeda and Ventspils 's are all undergoing periods of great change as they adapt to the growing needs for trade between East and West.
The Ventspils Free Port is currently in the middle of a series of expansions. The port envisages two key phases of development for the near future 's one that focuses on improving motor and railway access to the town to allow more goods to get to the port by land, and one that foresees the construction of additional berths and terminals.
"At the moment, with the support of city administration and Free Port, a row of significant projects is being implemented in Ventspils. The new terminals are developing well," a representative of the Ventspils Free port said.
He pointed to three freshly constructed terminals as proof of the port's progress 's one for cargo, one for juice and one for grain 's and said that a large chunk of the money for these expansions has come from EU cohesion funds.
In addition to strengthening the port's current capacities, Ventspils is breaking into new areas of operation. One of the port's new terminals boasts some of the most advanced equipment on the Baltic Sea which can not only handle roll-on/roll-off and container cargo, but also offers stuffing and stripping services.
The seaport at Klaipeda is also undergoing an extensive revamping of its capabilities. Klaipeda authorities hope that a new and improved seaport will help draw investors to the region. Klaipeda port representatives explained that the port already provides more than 23 thousand jobs and accounts for 4.5 percent of the Lithuanian GDP.
Additionally, Klaipeda has a wide range of upcoming developments and expansions. "The enterprises operating in the port invest millions of litas in the development of port services and infrastructure every year. These changes meet the demands of market and global trends: new terminals, quays, roads and railway lines are being built, and some old quays are being reconstructed," the representative said.
The most ambitious project that the port is planning to take on, however, is the construction of a massive artificial island to act as an "avant-port" for the city. The new island will be about 1.8 kilometers long and 600 meters wide to accommodate an expected increase in traffic. Moreover, it will be a deep water port with 17.5 meters of water, allowing it to lodge larger vessels.
The port of Tallinn, by contrast, is focusing more on re-orienting its facilities to fit with the changing needs of the market. The port's business suffered badly from the political upheaval surrounding the Bronze Soldier removal (see story next page), and the port is now weaning itself off of the lucrative east to west market because of its political instability.
"One thing is for sure 's we will not have such cargo flows from east to west anymore. The happy days have ended," Ago Tiiman, director of the Estonian Association of Port Operators, told The Baltic Times.
The port is now instead moving toward developing the west to east market 's bringing cars and goods to feed the consumer demand generated by Russia's growing middle class. "Right now ports are doing preoperational work to establish a new direction of cargo flow 's from west to east," Tiiman said.
Tiiman said that in order to help improve the security of the business and avoid politically induced market shocks, the port would also focus more heavily on "cargo which cannot be jeopardized on a political level."
Surprisingly, Tallinn's port is gearing up to cash in on the increasingly powerful markets of the Far East. As The Baltic Times went to print, a delegation of Estonian politicians and businessmen are undertaking a tour of Hong Kong and China in an attempt to capture more of the lucrative Asian market.
The delegates hope that the port of Tallinn will eventually be able to help ship Asian goods, particularly cars, from China to Russia via Estonia. While this may seem at first glance to be a cumbersome roundabout route 's especially considering China and Russia share a common border 's the shipping option is in many cases cheaper than trying to haul the goods over land.
Tallinn isn't the only port which is showing an interest in Asia: Ventspils has also been carefully eyeing the market and Klaipeda recently released a promotional presentation on the port in Chinese.
Investment into Baltic ports has paid off 's the three largest ports in the Baltic states have proven to be large enough to accommodate nearly any sized vessel, yet flexible enough to quickly adapt to market changes.
Total volume of shipped goods (in millions of tons):
Tallinn (2006) 's 41.3, 11.9% of total from eastern Baltic Sea ports
Klaipeda (Jan. - Sept. 2006) 's 20.4, 5.1% of total from eastern Baltic Sea ports
Ventspils (2006) 's 29.0, 8.4% of total from eastern Baltic Sea ports