Transport and logistics opens gates between Europe and the East

Photo: Pilseta24.lv

The transport and logistics industry, in brief:

• transport and logistics is one of the priority industries in Latvia;
• for last seven years, the export of Latvian transport services has doubled, reaching 1.4 billion EUR in 2009;
• export of transport services makes up 16–17% of total Latvian exports;
• cumulative foreign direct  investments in the industry amounted to 356 million EUR or 4,2% of the total amount of investments as of the first half of 2010.
• future strategy: a 24-hour concept.

In Latvia, located between the EU and the CIS/Asia states, the transport industry is based on services to these large markets,  further developing the existing transit corridors, opening new transport routes and inventing new services.

• The global economic crisis affected the industry less than other areas of business. Freight turnover at the ports of Latvia has decreased only by 2%, while it has fallen at other ports in the Baltic and Nordic States – between 5% – 20%, and in Finland – even by more than 20%.
• The transit corridor in Latvia is comprised 10 ports connected to the TEN-T network roads and railway, as well as two oil and one oil product main pipelines to Ventspils. 89% of cargoes transshipped at the ports are transit cargoes.
• Presently 1,4 EUR of each 7,8 EUR earned from export, are earned by  the transport industry. 
• About 80% of Latvian freight shipments are to Russia.
• The decision of the US government to send non-military cargoes to Afghanistan, using the transport infrastructure of Latvia, is evidence of the maturity of the industry and  the security of the transport corridor.  As of the second half of 2010 a total of 18 000 containers were shipped, bringing 9 million EUR into the economy of Latvia.

Main Players in the industry

• It is characteristic for the industry that in some areas large companies set the pace: state-owned company Latvijas Dzelzceïð and its subsidiary LDZ Cargo dominate in rail transport, the ports of Riga and Ventspils  – in the port services business,  Baltic Logistic Solutions – in transport of goods by road, Ventspils Nafta Terminâls – in stevedoring, Rîga Airport – in passenger air transport.
• Alongside large companies, there is also a place in this industry for small and even very small companies. Latvia has three small ports whose total freight volume comprises about 1% of the total freight volume of all ports. Small stevedore companies successfully operate there. There are also road carriage companies, efficiently operating in the market, using  between three and 10 trucks.
• Riga International Airport has become the largest air traffic hub in the Baltic States, with  growing potential in the  Northern European region. In 2010 4,7 million passengers were served at the airport (+14,7%). In the 1st half of 2011, 2.38 million passengers arrived and departed from the "Rīga" airport which constitutes an increase per 13,9%.
• The national airline airBaltic offers direct flights from the capital cities of all three Baltic States, and in 2010 it has transported more than 3 million passengers.
• Cargo turnover at Latvian ports in the 1st half of 2011 comprised 34.45 million tons, which is per 11.5 % more than in the 1st half of 2010, according to the data of the Central Statistical Bureau.
• In the 1st half of 2011 the amount of loaded cargo at Latvian ports reached 31.07 million tons, which is per 8.8 % more than in the 1st six months of 2010.
  
  Cargo turnover in the largest Latvian ports in the 1st half of 2011 as compared to January-June 2010:
• Riga port 16,81 million tons (+15,3 %)
• Ventspils port 14,48 million tons (+ 6,4 %)
• Liepaja port 2,37 million tons (+16,8 %)
  
  The Riga port which is the biggest port in Latvia according to the data of the 1st half of 2011, is only the 4th biggest port in the Baltic sea; this is how the TOP of ports in the Baltic sea looks according to the cargo volume loaded in 2011:
  
  1. Primorsk port 38 million tons (-0.9%) (Russia)
  2. Sankt-Peterburg port 28.2 million tons (+7.2%) (Russia),
  3. Tallin 19.2 million tons (+8%) (Estonia)
  4. Klaipeda 18.4 million tons (+22.6%) (Lithuania)
  5. Rīga 16,81 million tons (+15,3 %) (Latvia)
  6. Venstpils 14,48 million tons (+ 6,4 %) (Latvia)
   
• Volume of sent and received cargo in the small Latvian ports in the 1st half of 2011 was 0,79 million tons which is per 18,1 % more than in the 1st half of 2010.
   
• In the 1st half of 2011 370,7 thousand passengers arrived and departed from Riga passenger port, which is per 14,6 % more than in the 1st half of 2010. In the 1st half of 2011 passengers’ turnover in Ventspils port was 19,6 thousand people but in Liepaja – 9 thousand people.
   

Development of transport and logistics

• The Ministry of Transport has set a goal of uniform and stable growth in transit cargo volumes and to increase the added value of transit services, paying special attention to increasing container cargo shipments and development of logistics centers. The goal for  transit cargoes is to reach a volume of 100 million tons per year, of which  two million tons are container shipments –  by 2020.
• Creation of a single marketing strategy should stimulate the use of new container trains and cargoes from China and other Asian countries.
• The Ministry of Transport has set as a priority the construction of industrial and distribution facility parks.  The minister of transport has proposed Latvia as a "24 hour delivery" logistics center in the region, which means that Latvian logistics and distribution warehouses goods can deliver goods within 24 hours to stores in Helsinki, Stockholm, Minsk, Warsaw or Moscow.

Export of transport services

TOP 5 largest transit/transport companies according to net turnover

Useful links

• Ministry of Transport of Latvia
• Website of Latvia for transit
• Latvian National Association of haulers
• Road transport administration
• Latvian Association of Freight Forwarders and Logistics LAFF
• Register of Latvian companies legal and contact data