Kotka and Hanko harbours compete for lucrative car transit business
More than 300,000 cars delivered via Finland to Russia
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Competition among Finnish harbours for the lucrative transit business for cars imported into Russia is intensifying. The Port of Hanko on the southwest tip of Finland now faces a challenge from Kotka, which lies at the eastern end of the Gulf of Finland. A new area covering 20 hectares is to be opened up at the Port of Kotka specifically for cars in transit.
The area will double in size by the end of next year. The new facilities will allow the Port of Kotka to handle 150,000 cars for delivery to Russia.
With investments of about EUR 5 million, the Port of Kotka hopes to get about one third of Finland's rapidly-growing car transit business.
There is plenty of business to go around. This year growth is expected to increase by nearly 70%, and the total number of cars passing through Finland for delivery to Russia is set to exceed 300,000 in 2005.
"Prospects for development in transport of cars are mind-boggling", says Kimmo Naski, managing director of the Port of Kotka.
"Just a few years ago we were thinking of possibly having to shut down the whole harbour", Naksi recalls.
"Then representatives of international car concerns from around the world wanted to come and meet us."
According to Russian estimates, car imports are set to double in the coming five years.
The Port of Hanko has been the dominant facility in exports of cars to Russia. This year it will handle more than 200,000 of the vehicles - about two-thirds of all of the transit trade.
Kotka is in second place, with some deliveries also passing through the harbours of Turku, Hamina, and Helsinki.
In Kotka, cars currently comprise no more than about two percent of all of the harbour's activities, but growth is strong. Last year, the car transit business grew sevenfold, and this year 75,000 cars are passing through the harbour en route to Russia.
The Port of Hanko is confident that there will be plenty of business to go around for both Hanko and Kotka.
The car transit business grew to its current proportions from almost nothing within a period of just a few years, but some are worried that it might disappear just as quickly, as Russia upgrades its own harbour facilities.
Until now, Russia has focused on improving its oil terminals and other export harbours, but now there are plans to refurbish the harbours of Ust-Luga and Lomonosov, both south of St. Petersburg, for the use of incoming traffic.
Finland also faces competition on the south shore of the Gulf of Finland. However, the popularity of the Baltic States as transit points for Russia is hurt by the poor condition of the highway network, and by weaker shipping connections.
The transit business for cars exported to Russia is worth millions for Finland, with revenue coming in from shipping lane fees, harbour services, and transport. The exact figure is difficult to pinpoint, but according to one rough estimate, each vehicle that passes through Finland for sale in Russia is worth about EUR 100 for Finland.
One factor reducing Finnish profits is the fact that transport of the cars from the harbours to the Russian border is almost completely in the hands of foreign companies.
Helsingin Sanomat
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| 7.11.2005 - TODAY |
 Kotka and Hanko harbours compete for lucrative car transit business |
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