Sharp decline in rail container traffic through Siberia to Finland
Fee hike doubles cost of rail transport from Far East
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Container transport by rail from the Far East via Russia to Finland has collapsed. The sharp decline has been attributed to the increase in transit fees imposed by Russia, which have approximately doubled the cost of container transport by rail through Siberia.
The Trans-Siberian Railway has previously been a key transit route. Now transport of transit goods from the Far East to Finland goes mainly by sea, which doubles the time that goods take to reach Finland to more than a month.
In the first quarter of last year 31,500 TEU units were transported to Finland by rail via Siberia. A TEU unit is an amount of goods that will fit into a small container. During the same time this year, this had dropped to just 3,700 TEU units.
Last year, transport via Siberia accounted for about six percent of all goods traffic crossing the Finnish-Russian border by rail, but prospects for growth have been seen as positive.
"It is a small, but important portion, because the route has good potential for Finland’s export industry", says Ilkka Seppänen of the rail goods transport company VR Cargo.
The greatest impact of the decrease in the use of the trans-Siberian route is on rail logistics companies. Containers have generally been unloaded in Kouvola, the Port of Hamina, or in Lappeenranta.
"Last year we got six trains a week. Now the total for all of Finland is just one train a week, if even that", says Seppo Herrala, managing director of the Port of Hamina.
However, the dwindling of rail transport has not brought the port to a standstill: container imports from Asia now come to Hamina by sea. In nearby Kotka, container traffic has grown by nearly 40 percent.
The proportion of ordinary exports and imports in Finnish transport via the Siberian route has been small. Ilkka Seppänen estimates that 70 percent of the transit goods have comprised South Korean consumer electronics whose ultimate destination is Russia. Much of the rest of the goods has also gone back to Russia.
Within the past few years, Finland, at the western end of the Russian rail network, has become a major wholesale hub for the growing Russian market.
In Kouvola, for instance, a number of large warehouses have gone up in recent years, containing consumer electronics, shoes, and clothing, for shipping directly to shops in Russia. Reasons for Finland’s popularity include security, good transport connections, and logistics know-how.
The difficulties linked with the Trans-Siberian Railway now threaten to postpone new investments. In Kouvola, the planned construction of at least one container terminal has been postponed.
Although rail transit business through Siberia has plummeted, a revival is not out of the question. Finland’s Ministry of Transport and Communications, the Finnish railway company VR, and companies in the business are holding discussions with Russia on reducing transit fees.
Ilkka Seppänen of VR Cargo believes that the route still has potential.
"It is a kind of wave motion. In the long term, eyes are on the Far East and China", he says.
Helsingin Sanomat
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| 12.4.2006 - TODAY |
 Sharp decline in rail container traffic through Siberia to Finland
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