16.12.2014
Estonian transport may reach both a bright blue dream and a logistical dead end in the future, it was discussed yesterday at the 20th anniversary conference of the Logistics and Forwarding Association.
Representatives of the sector must set priorities for the next five years together with the government. In a difficult market situation, state investments in logistics must continue, it was agreed during a discussion on transport development trends.
The Institute for Futures Studies prepared four future scenarios for Estonian transport. Erik Terk, director of the institute, said that two main external influences were taken into account when preparing the scenarios. First, will east-west freight volumes contract or expand? Second, will the Rail Baltic project develop and launch as planned, be delayed or stopped altogether?
Karli Lambot, a member of the board of the Logistics and Forwarding Association and chairman of the council of ACE Logistics, said that the Institute for Futures Studies will also analyze the positions expressed in the discussion and formulate final development scenarios by the beginning of the new year. These will then be presented to decision-makers to help set priorities.
“Light Blue HUB”
The most positive scenario, “Light Blue HUB”, promises that freight volumes will increase both east-west and north-south, and Rail Baltic will be completed quickly. It is also the only scenario where the impact of the transport sector on GDP growth increases.
Former European Commission Transport Commissioner Siim Kallas said the light blue scenario was doubtful. “I dare say that the external environment is getting worse and worse,” he said, referring to tensions between Russia and Ukraine.
Erik Laidvee, head of AS Transiidikeskus, said that they are looking at north-south traffic through Finnish exports and consider it very promising.
According to Raivo Vare, chairman of the Estonian Railways board, Finland's annual export volume of 45 million tonnes is quite large. If even some of that goes to Rail Baltic, that's already quite good, he thought.
However, Vare admitted that there is nothing to hope for other than Finnish exports to Rail Baltic from cargo volumes. Moreover, he claims that it is difficult to organize cargo transport between high-speed trains.
According to Tiit Vähi, one of the partners of Sillamäe Sadam, there has never been any north-south freight transport historically, which is why he is cautious about it in the future. “But I support Rail Baltic, especially if we get 70-80% of European Union financing with the help of Kallas,” he added.
Vähi admitted that the profitability calculation of Rail Baltic makes you scratch your head when we estimate that perhaps a million tons of goods will come from around Tallinn per year and perhaps another million tons from Finland per year.
Laidvee said that he believes in the possibility of the “Helesinise HUB” scenario. According to him, the possibility that container ships from Asia will start entering our ports directly has been put on the back burner for now. “I believe that several shipping lines will start coming directly from Asia to Tallinn. We have corresponding plans in the works,” Laidvee confirmed.
“Cautious Man Scenario”
The second scenario is called the “Cautious Man Scenario.” In it, east-west freight volumes are volatile and north-south volumes grow slowly. The Rail Baltic project is delayed – our inability to agree on things will be fatal.
Former European Commission Transport Commissioner Siim Kallas acknowledged that the biggest threat to Rail Baltic is indeed that local leaders are unable to make the necessary decisions. “At the European level, no one has ever challenged Rail Baltica.
"The importance of the Baltics. All funds and limits are available for this project," he confirmed.
According to Kallas, the biggest risk is not being ready when the channels open. If the papers cannot be submitted on time, other projects will be found in Poland, Hungary or Bulgaria that need support.
There is also a risk that Estonia will not be able to keep two railways alive - the current infrastructure and Rail Baltic. According to Raivo Vare, Chairman of the Supervisory Board of Estonian Railways, there is no need to worry about this, since in the current perspective, Estonian Railways will no longer be alive at that time and Rail Baltic must be viewed as a separate project. According to him, Estonian Railways currently has a buffer of about two years, with which it can serve existing freight flows and passengers. “There will be no more resources in 2017, only the Rail Baltic project remains,” he said.
According to Vare, the principles of the national attitude need to be changed. If cross-subsidization of passenger transport is not stopped, the current railway will not exist in the future.
“Northern Silk Road”
According to the third scenario, “The Northern Silk Road,” east-west freight transport will slow down, but north-south freight will grow. According to Raivo Vare, Chairman of the Supervisory Board of Estonian Railways, this scenario could be improved by launching railway ferries between Finland and Estonia.
The Helsinki-Tallinn tunnel is related to the topic, which Vare believes would be the most powerful tunnel in the world, but the potential of our region cannot justify it.
According to Vare, the railway ferry must allow for the movement of a full train. “Without the railway ferry, the railway will not be very operational and only road transport will remain,” explained Vare.
Sillamäe Port partner Tiit Vähi maintained that there is not much cargo moving north-south. “The claim that the sulphur directive will turn the world upside down is also not true,” he refuted the opinion that rising shipping costs will shift cargo transport from sea to land. According to him, shipping costs will only increase by 10% instead of the feared 30%, and sea transport will remain the cheapest.
“Life in a Logistical Dead End”
The fourth scenario, “Life in a Logistical Deadlock,” means a standstill in both east-west and north-south freight transport. According to the vision, Rail Baltic’s costs will initially be higher than estimated and the project will be stopped. In logistics, we will only be able to serve our exporter’s imports.
According to Tiit Väh, one of the partners of Sillamäe Sadam, it is possible to revive freight transport even before and without Rail Baltic, for example with a railway ferry. “Let's do it then!” he urged.
Raivo Vare, chairman of the Estonian Railways supervisory board, confirmed that business would continue even in this scenario, but it would be limited. “It would no longer be as attractive and import-oriented.” Vare noted that all scenarios (except for the “Light Blue HUB”) are united by two needs: when the market squeezes, new business models need to be found, and the state’s share of investments in infrastructure needs to grow, because the private sector is no longer willing to take risks.
“The state’s contribution must increase,” Vare emphasized. According to him, the logistics sector has not been able to convey this knowledge to state leaders.
and that understanding doesn't seem to be coming. "There's an election campaign going on right now, we should take advantage of it," he added.
Tiit Vähi agreed that the logistics sector must unite. “Things don’t happen, they are managed,” he said. If the logistics sector doesn’t start managing its field, the prediction of the disappearance of Estonian Railways will come true, Vähi said.
Erik Laidvee, head of AS Transiidikeskus, said that the government needs to be helped to set priorities for the next five years. “Investments must continue.”
Source: Äripäev, 16.12.14
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