With a key location between East and West and easy access to the Baltic Sea, shipping has traditionally been one of the largest and most important industries in the Baltic states. So it comes as no surprise that shipbuilding has also become a key industry, with a long history number of major companies that play on the world stage. This week's Industry Insider takes a look at the history of shipping and shipbuilding in the Baltics, along with some of today's leading companies and trends.
RIGA - Since the 10th century, ships and shipping have played an integral role in Baltic economies. From Viking ships, to Hanseatic "kogges," to the modern motor ships used today for transatlantic transport, Baltic shipping has come a long way.
In Hanseatic times, shipping flourished in the territories that make up the present day Baltic states, and in the Baltic Sea region as a whole. Riga was situated on a vital crossroads of the East-West trade routes of northern Europe, located on route between Russia and important Western European trade centers including London, Brugge, Koln, Lubeck, Visby and Bergen.
In Hanseatic times, the most important items shipped in the Baltic Sea included salted herring from Norway, woolen cloth from the Netherlands, and furs procured in inland Russia, and purchased at the Hanseatic Kontor (market) in Novgorod. Shipping was an absolutely integral part of the founding of Riga as a Hanseatic city. Furthermore, Tallinn, or Reval, as it was known in Hanseatic times, was also heavily impacted by shipping, in its founding days.
The three main ports of Latvia, both historically and today, are Riga, Ventspils and Liepaja. Estonian ports, most notably Tallinn and Narva, were located further north, and were thus more vulnerable to winter freeze ups. Lithuania was historically landlocked, as in former times, Memel Germany existed in today's coastal Klaipeda region.
The Baltic Sea has always been a particularly sensitive area, and in some parts, a semi-arctic area. This means that winter ice makes a huge impact on the Baltic shipping industry. Depending on if a winter is mild, normal, or harsh; many ports can freeze up completely, blocking ships' passage. Often, tug boats are necessary, for navigation through icy waters.
The fact that the port of St. Petersburg typically freezes up, even in the mildest of winter conditions, partially accounts for the fact that Russia has always cast its eyes on the Baltic states' more southern ports.
Today, the Baltic Sea region is the most rapidly growing market area in Europe. The controversial BPS2 Baltic Pipeline system carries mass quantities of oil from Russia to the EU countries. For oil on route through this pipeline to Western Europe, Ventspils and Butinge are key coastal transit points, where oil is transferred from land to sea. Furthermore, Riga, Klaipeda, Tallinn and Ventspils are all important sites for the transfer of Russian petroleum products.
According to Erkki Kotiranta, vice president of the Neste Oil Shipping Company, sea transportation is of extreme importance for growing Baltic trade, because it accounts for a 50 percent share of all transported freight.
"Rapid economic development in Russia makes the Baltic Sea increasingly noteworthy - and due to the recent enlargement of the EU, European interest in the Baltic countries is reviving as well," he said.
The Neste Oil Shipping Company is a very important player in today's Baltic shipping market. The international, Scandinavian-based company carries crude oil, petroleum products and some chemicals throughout the Baltic Sea region. The company owns about 30 tankers, most ice-strengthened. Their total cargo capacity is impressive: approximately 1.2 million tons. Neste Shipping carries an awe-inspiring total of 34.7 million tons of cargo a year. They have operations in the Baltic Sea, the North Sea and on intercontinental routes as well.
Neste's success is just one piece of evidence that Baltic shipping truly has come a long way.