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Tuesday 25.04.2017 | Name days: Līksma, Bārbala
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Expert: it should be clear what needs restructuring in the transit business sector

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThe situation that is currently present in Latvia’s transit industry raises concerns about the industry’s future, says spokesperson for Latvian Transport Development and Education Association Igors Kabashkins.

«The main causes are known – Russia’s decision to gradually divert cargoes from Baltic ports to its own, western sanctions and Russia’s counter-sanctions, economic problems in neighbouring countries and the overall unstable geopolitical situation in the world. As a result, we have seen a reduction in the volume of transshipped cargoes in many of our country’s companies,» – Kabashkin told Delfi.

He said: «Latvia is not the only country that currently experiences negative influence from changes. A similar situation is noted elsewhere in the Baltic Sea region. This is why countries are trying to exact reforms to become more attractive to cargo owners and create better conditions for transit services. It should be added that Lithuania, for example, began reforms earlier, and it seems the country has been very conservative with its efforts. This is demonstrated by the growth in the World Bank’s Logistic Performance Index, which evaluates the quality of countries’ transport infrastructure, customs procedures, delivery speed and other indexes.

Latvia is behind in this regard. However, nothing has happened that could not have happened in a different part of the world. Experience shows that crises are most successfully overcome by those who are more open to change and are able to make important decisions. A crisis can sometime help those who would not consider reforms in the first place.»

«It is good that instead of looking for scapegoats, Latvia’s transit industry expresses the desire to pull itself together and analyze the cause without allowing emotions to take hold and come up with a way out to improve the situation. LDz Logistics has taken up the task to consolidate the industry’s powers. The company is currently engaged in the creation of the development strategy for Latvia’s transit corridor.

[…] On top of that, instead of thinking of ways to recover lost volumes from current markets, big hopes are put into new destinations, including China and its transportation network further into Europe and Scandinavia. Latvia is but a small stop on the 6,000 km long road from China to Sweden. This means the transit corridor does not have one owner. No one can single-handedly influence fees for logistical services, which is something Russia, Belarus and Sweden demand on its routes. No one can influence tariffs in different terminals in Latvia, because they are in the hands of private owners. But it is possible to compile information, perform route planning, price correction and preparation of necessary documents to ensure full transport solutions along the entire route,» – the industry’s representative continues.

[…] «I believe that while looking for a governmental solution, we will have to find a way to balance the interests of the industry’s main players and avoid ignoring the needs of any ports or terminals.

I suppose there are parties that had expected a recipe for the industry’s development to be finished in a very short time span. Bu the objective at hand is complicated enough to warrant more time. By the end of the year we should come to some clarity in regards to areas in need of restructuring. The future depends on the industry’s ability to cooperate, attract cargoes together and offer competitive tariffs and conditions. Latvia’s geographical condition is beneficial for transit business development, but we need to learn to use it,» – Kabashkins emphasized.

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