Asian electronics manufacturers reducing use of Finland for transit to Russia
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A number of Asian manufacturers of consumer electronics have reduced their use of Finnish storage facilities for transit of goods exported to Russia.
Russian customers have previously picked up bulk deliveries of consumer electronics at logistics centres - large warehouses - in the Kotka and Kouvola areas. Now the companies are delivering some of their goods directly from Asia to Moscow, for instance.
Of the Asian companies, the South Korean manufacturers Samsung and LG have reduced their activities in Finland, says commercial director Simo Päivinen of Itella.
Itella deals with the Finnish end of Russian logistics of Canon. Itella does not believe that Canon plans to make any such changes in their transport of goods to Russia.
In addition to the Korean companies, the Japanese firm Panasonic is moving much of its storage capacity into Russia. Panasonic CIS Oy, which focuses on sales of Panasonic products to Russia, had a turnover of nearly EUR 850 million last year. This is expected to be cut in half this year.
“Some will move away, and some will stay”, says Dimitri Karlov of Green Logistics. The company deals with logistics for Panasonic, as well as for Samsung and the Japanese Toshiba. Karlov calculates that his company has lost 30% of the goods flow of Samsung and Toshiba items in the past couple of years.
“We are looking for new clients, which need not necessarily be electronics manufacturers. Nothing is permanent", Karlov says.
Green Logistics has three warehouses in Kouvola covering 15,000 square metres each. Each of the warehouses is about the size of two football pitches.
Karlov feels that political issues are involved, in which Russia wants to deal with more of its import logistics itself.
Simo Päivinen of Itella does not see any political reasons. “The question is one of corporate strategies and methods of action; about how they want to solve things.”
Päivinen says that Asian companies have wanted to store their goods outside of Russia’s borders for security reasons, out of reach of Russian officials. However, logistics is developing quickly in Russia, Päivinen says.
Price has also been an advantage offered by Finland: storage space near Moscow costs many times what it costs in the southeast of Finland. In Finland it has also been possible to store goods without customs clearance, which is not possible in Russia, says Markus Höglund, managing director of DHL Freight.
Of the large electronics companies that have used the Hamina logistics centre of DHL, one has moved its warehouses to the Russian side, and the other has said that it would do the same.
At Steveco International Logistics, director Olli Parikka says that he is confident that even though storage capacity is increasing in Russia, cross-border goods traffic will grow even faster, and will continue to bring work to Finnish logistics companies.
Kimmo Koski, CEO of the Kotka-based Stella Corona logistics company, feels that the tiresome backlogs at the border are one factor that encourages companies to move their warehouses into Russia.
“If we could get rid of the backlogs, goods ordered today could be in Moscow already the day after tomorrow. Now an extra day is wasted at the border.”
Helsingin Sanomat
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| 23.5.2008 - TODAY |
 Asian electronics manufacturers reducing use of Finland for transit to Russia |
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