As Ventspils sags, other ports soar

  • 2003-03-20
  • Thomas Foulquier

Crude oil loading is not the only logistics service Latvian ports can offer.

A potential European Union entrance door to Russia, Latvia has the opportunity to develop other types of cargo flows through its ports and to start an alternative export route for Asian products.

While the port of Ventspils has been struggling with its main client - Transneft - and has experienced throughput decline, other Latvian ports have enjoyed sharp growth.

Ivo Kolins, head of the Port of Liepaja's marketing department, detailed the western Latvian port's achievements.

"Liepaja's port shows the fastest growth in the Baltics in terms of turnover. We take advantage of the fact that it remains ice-free and is the closest to Western European markets." "Mostly, we are working with metal, timber and bulk cargo, like cereals," he said.

The trend observed in Liepaja contrasts with the difficulties seen in Ventspils, as the port handled 4 million tons of cargo last year, an increase of about a third from 2001. Traffic in Riga's port is also on the rise. The Port of Riga saw its freight volumes reach 18 million tons, an increase of about 20 percent over last year. Coal shipments accounted for a large part of the increase.

For freight forwarders, the consolidated results of ports, far from being abstract figures, mean business on a daily basis.

"I cannot speak for all the market," Karlis Soika of Kuenhe and Nagel Latvia said. "But for us the figures are clearly up.

"The potential is there. Definitely, when Latvia is part of the European Union, the volumes will increase."For the moment, they are quite small, which does not make it so attractive for shipping lines to open representative offices - they tend to work with agents here," he said.

"But in the future, things will be improving."

Currently, one of the challenges for the industry is to secure more favorable transportation tariffs for several groups of cargo - coming from and directed to Moscow - through the Port of Riga.

So far, freight forwarders feel that Latvia's role as a logistics platform for the Russian market has not been promoted as much as it should have.

Robert Mertens, liner department manager at the Lat-Finn agency, spoke about Riga's opportunities and challenges.

"We work with large shipping companies, like CMA-CGM, among others. Of course the opportunity for transit to Russia is important, but unfortunately a number of political problems make our business difficult," he said.

"I hope these problems will be solved soon. Anyway, we expect traffic to increase this year, because part of the traffic between Finland and Russia will be redirected toward the Baltic states and Riga."

Another potential growth area for Riga and other Baltic ports would be to take advantage of the containerized cargo coming from China by railway.

The railway idea is not new. Ventspils Nafta is currently trying to reduce the adverse impact to its pipeline by transporting crude oil by railway from Russia, with moderate successful.

An alternative to the long maritime export route from China, the world's largest manufacturing center, to Europe is the use of railways through Russia to Baltic ports then loading cargo on ships bound for Western European ports.

The project is slowly taking shape. A new container train line will open connecting Russia, Latvia and Kazakhstan at the end of March or in early April.

The line will connect Kaliningrad, Rezekne in eastern Latvia and Almaty in Kazakhstan.

The plan is that the container train will be connected with Klaipeda, in Lithuania and to the Latvian ports of Riga, Ventspils and Liepaja.

The new line is expected to attract freight from the northwestern regions of China and India in the future.

"Rail could be the future," said Soika. "But the question that remains is the quality of service, which currently from the Far East can be quite terrible.

"Once the quality of service is provided, the cargo flow will increase, but all still depends on the rates," he said. "But it does make sense."

Other industry insiders are a little more cautious.

"The idea has been around for a while, there has been a lot of talk for three or four years," said Kolins. "But there is still no movement."