bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Saturday 29.11.2014 | Name days: Ignats, Virgīnija
LithuaniaLithuania

Russian embargo shockwaves started crippling Lithuanian haulers

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULinas Jegelevičius fot the BNN

Russian embargo has punched Lithuanian haulers hard in the face – after staggering for a bit in shock, the heavy body of national logistics is starting to slump. This is an illustrative description, but it reflects best the situation among Lithuanian carriers, expecting help from the national Road Carriers’ Association (RCA) Linava.

Many still assessing the damage

Its vice-president Rimantas Martinavičius told BNN that here unusual calm has been lingering for the last three weeks since the announcement of Russian embargo in the sector.

«But now the silence is breaking up, as some haulers acknowledge they are being cornered up by Russian embargo. Meanwhile, others don’t send yet a Mayday call, but try to assess the blow and are working frenetically on business alternatives. But by the beginning of September when the association will hold an all-member meeting, I believe, we’ll start seeing the real toll,» Martinavičius told.

In fact, some of the haulers have already raised their hands up, handing their truckers pink slips.

As of early August 27, Vilnius-based logistics company Hofa was the first in the line to have publicly announced of mulling laying-off 210 of its workers, among them 120 drivers.»

«Nearly all our business activity was about fruit and vegetable exports to Russia. We transported the green goods to Russia and provided Russian market some other logistic services.  With the red flag up, our business is over,» said Dainius Drūteika, company’s director.

Over the last three weeks, the hauler saw disappearing most of the lucrative business orders. Of its 100 freezer-trucks usually riding the Russian roads, now only 20 of the fleet still crisscross Russia, but their near future in the country is dim. With the Russian cord cut off, the majority of workers have been idling.

«But as finding new markets and diverting to them takes quite some time, having the personnel cuts might be imminent», the businessman insisted.

Swapping markets is hard

And the alternatives that Hofa is now working strenuously on are not limitless, he says.

«The way-out of the plight is the same as before: turning around and heading to Europe. There aren’t just too many other options. The dreams about as far markets as Morocco, which we’d considered at some point in the past, can’t leave the realms of dreams, as we don’t have necessary permits to operate in the country,» said Druteika.

The company has done some commercial haulage as far as in the dangerous Afghanistan in the past.

And turning to Europe amid the crisis is far from being simple, the transporter noted.

«Work in Europe is absolutely different. Alike many Lithuanian logistic companies, we would need to become there part of large local transportation companies. When dealing with Russia, all the managers and drivers had to have a good command of Russian, and now they have to be taught decent English in order to be able to carry out the assignments in Europe. It is not simple,» the Hofa head told.

Some Lithuanian transport specialists, he noted, already toil for the biggest Western European logistic companies, but, as a rule, their duties ultimately boil down to the technical stuff – buying trucks, obtaining necessary licenses, hiring drivers and handing them over to the maternal company’s administration.

«This is how far the Lithuanians would be allowed proceed in the West», Druteika told.

Other haulers in worse plight

Meanwhile, Algimantas Kondrusevičius, Linava president, hoped that Hofa, which he characterized as a modern and experienced company, will manage to get out of the murky situation.

«There’re other transport companies, much smaller in size than Hofa, which now ended up being in a whole lot worse situation. They are not just 100 percent oriented to Russian market, but what makes things worse they carried only Lithuanian dairy products to Russia. For them, having worked with the closed circle of clients many years there, plunging into other markets is really uneasy. It is akin to plunging into a bush of nettles,» the association head spoke illustratively.

Unwilling to come up with any particular names, he insisted that there are «several dozen» haulers throughout the countryteetering on the brink of abyss.

«As a rule, they are medium-sized enterprises, employing 20-30 trucks, which without liaisons with the West, cannot be quickly steered to that direction,» Kondrusevičius told.

He told he knew a logistics company in Šiauliai, a city in northern Lithuania, which in the wake of Russian embargo has been running only three out of its 23 trucks.

«And there’s acuter competition among the drivers within the company,» he noted.

According to Linava, there are 27 thousand Lithuanian trucks on the international roads- around 7-8 thousand of them are refrigerated trucks.

An impressive one-third of the fleet whisked the goods to Russia until now.

Pleas for help sent

Facing the immediate aftermath of Russian embargo, some haulers have sent part of their truckers on forced leave or paid holidays. But the exact scope of the embargo-related layoffs will turn up in the early fall, Linava president warned.

«The transport business understands well that laying-off the drivers is tantamount to ruining the business, so all the companies in the sector do whatever they can find solution,» he said.

Nearly 2000 transport companies are registered in Lithuania, according to Martinavičius.

With the future becoming even gloomier, the haulers’ functionaries expect that Lithuanian Government will throw them a buoy in cushioning the severity of Russian sanctions.

«We really expect a reasonable behavior to the sector from the authorities as far as putting off tax payment is concerned,» he said.

Meanwhile, Robertas Dargis, president of Lithuania’s Industrialist Confederation (LIC), hinted that the actual scope of the aftermath of Russian sanctions could be assesses only around in a month from now.

But he insisted Lithuania is likely to avoid the worst blow, like the ones that Lithuania had dealt with amid the 1998 Russian economy downturn.

He says the business now comprehends well Russian market’s risks and therefore has diversified their business activities since 1998.

Russia can’t be disavowed

Dargis cautioned all at a LIC meeting early in the week not to completely cut the ties with Russia.

«While assessing the risks and dangers, it is advisable to maintain the dialogue with Russian businessmen…We all should speak of what awaits us all in the future,» the LIC head said.

So far transportation, as well as dairy, stockbreeding and vegetable farming have been ill-effected most by Russian embargo, according to Marius Skarupskas, the deputy Economy minister, who spoke at the LIC meeting.

He said the government has a stack of measures aiming to ease the sectors’ existence. Among them is hiring of foreign consultants tasked with making the transit to foreign markets easier-but he stopped short of saying whether the Social-Democratic government is going to respond to the embargo-hit sector’s tax alleviations or postponement pleas.

Lithuanian businessmen are cry-babies

But some Lithuanian prominent economists bristle against a thought of aiding the troubled sectors at the expense of others.

«I look at it realistically. It is not new that Lithuanian businessmen plea for help. It’s been always like that, regardless of whether Russian sanctions are into effect or not. I’d say whimpering is an exceptional characteristic of national business. But being aware that Lithuanian governments are virtually catering to the needs of cry-babies, I can bet that Government will give in to the sectors’ pleas. It will come at the expense of the public sectors-teachers, professors and doctors,» Aušra Maldeikienė, a prominent economist, told BNN.

Ref: 020/111.111.103.1448


Leave a reply

  1. Linda says:

    How is Kalingrad getting supplies? Closing borders here?

    Thumb up 0 Thumb down 0

Retail trade turnover up 4.7% in Latvia

Compared to September, the total retail trade turnover in Latvia rose by 1.5% in October 2014. Retail trade in food products grew by 0.4%, whereas of non-food products – by 2.2%.

Latvia’s Gross Domestic Product up 2.4%

In Q3 2014, compared to Q2 2014, Latvia’s gross domestic product at constant prices grew by 0.5%. Compared to Q3 2013, on the other hand, it has risen by 2.4%, according to data compiled by the Central Statistical Bureau of Latvia.

Landmanis: we live in a country of «traitors»

«Traitors» sit in the Saeima, Cabinet of Ministers and hold different official posts. Laimdota Straujuma’s Cabinets of Ministers can be freely called «traitorous» Cabinets of Ministers, because in all cases these structures had been formed and «fathered» by criminally accused and legally restricted Aivars Lembergs, said Ventspils City Council deputy Aivis Landmanis in his interview to BNN.

EC asks Latvia to clarify its next year’s budget plan

The European Commission has asked eleven countries, including Latvia, to carry out necessary measures in order to make their next year’s budgets comply with fiscal requirements of the European Union.

Ērglis: there should be a university law, not an association to aid a monopoly

The initiative to create a medical resources association and excluding from it University of Latvia, which contributes a lot to the country’s medicine by developing the founding disciplines of chemistry, biology and physics, is a direct threat to the development of Latvian medicine, said Latvia’s leading specialist in cardiology Andrejs Ērglis in his interview to BNN.

Will Lithuania have gone extinct by year 2314?

Like many others, Lithuanians might like sex, but definitely not bearing and raising kids. The birth rate is expected to dip to 1.29 children per a fertile couple in 2015 and at that rate it will be one of the lowest in the world. No doubt, over the last 10 years in the European Union, Lithuania, the largest Baltic country, has become significantly more competitive, but the demographic issues have exacerbated.

Repše no longer wants to manage his own political party

Founder and current head of Latvia's Development Party Einars Repše will no longer be a part of the party’s leadership. With that, the party plans to elect a new leader during the party’s congress this Saturday, November 29th.

European Parliament adopts Google breakup resolution

The European Parliament on Thursday, November 27, adopted a resolution suggesting Google to break up in separate companies to avoid competition law violations.

Frost to become stronger in Latvia; no snow yet

Latvia’s eastern regions will experience moderate frost this week – air temperature is expected to drop to -3° C…-6° C at night. Daytime air temperature is expected to rise to -1° C…-3° C. This marks the beginning of winter.

New Wave plans to leave Latvia and move somewhere else

Organizers of the world popular New Wave contest promise to decide on a new location for the contest before the end of 2014. The contest’s representatives in Latvia have yet to confirm this information.

UK to outline plans to reduce influx of immigrants

The Prime Minister of the UK, David Cameron, will on Friday, November 28, outline a plan to curb allocation of benefits to immigrants in order to reduce their influx that, as regarded by British politicians, is alarmingly high.

Vita Matisa: Latvia is riddled with weak points

Latvia is currently on the last or next to last in Europe in terms of trust level of politicians and political system in general, said Politologist Vita Matisa in her interview to 1:1 programme of LTV. «This fact, which formed over the past twenty years, is a very weak point in Latvia’s defence,» – said Matisa.

Kūtris to be put in charge of Saeima Citadele Sale Investigation Committee

This Thursday, November 27th, Saeima deputy Gunārs Kūtris from To Latvia from the Heart was chosen as the head of the parliamentary commission for the investigation of the sale of Citadele Bank.

EU adds people and organizations with ties to Eastern Ukrainian militants to its blacklist

This Thursday, November 27th, the European Union added 18 private and legal persons with ties to East Ukrainian militants to the union’s official blacklist, as confirmed by diplomats.

Altum provided EUR 38 million to Latvian businesses this year

In the nine months of 2014, Latvian development financial institution ‘Altum’ provided Latvian enterprises with loans worth a total of EUR 37.9 million.

Five judges of Riga Regional Court may end up in sights of law enforcers

Latvian law enforcement authorities may have been watching five judges of Riga Regional Court for a long time, according to information from Ir magazine.

Twitter in talks to buy Bieber-supported selfie start-up

Media report that microblogging site Twitter is in talks to acquire Shots, a selfie app start-up supported by Canadian pop singer Justin Bieber.

AS Capitalia: Latvia lacks long-term planning on a national scale

The government lacks long-term planning in its efforts to realize an economic policy to improve the situation in Latvia. A more stable tax policy is necessary in order to improve the business environment in the country, said Manager of AS Capitalia Juris Grišins in his interview to BNN.

CV-Online survey: demand for employees down in Latvia

Employers in Baltic States will actively seek new employees and increase their wages next year. However, they will be more cautious than they are now, according to results of a survey compiled by CV-Online on employment in Baltic States.

Rinkevics: it is necessary to work on making visa regime easier with Georgia

«Georgia and Moldova are countries that have used opportunities provided by the EU Eastern Partnership initiative most successfully. They have definitely become leader states,» – said Latvian Foreign Minister Edgars Rinkevics during his meeting with Georgian Foreign Minister Tamar Baruchashvili in Tbilisi.

12th Saeima deputies to decide on continuing drafts launched by previous parliament

During the November 27th meeting of the 12th Saeima, deputies will discuss a total of 18 matters of unfinished drafts left from the previous parliament.

SEB: Eurozone is a child under the care of the global economy

«The largest headache for the world’s economies is the ruling cautiousness. The wide range of economic policies and different economic measures is becoming thin. The efficiency of the current ones is in decline as well. However, it is not too late,» – says SEB Bank economist Dainis Gašpuitis.

State Police files administrative breach reports for Straujuma and Ushakov

Latvian State Police has filed two administrative breach reports: one for Latvian Prime Minister Laimdota Straujuma and the other for Mayor of Riga Nil Ushakov. Both reports have been compiled for the breach of election campaign procedures, as confirmed by State Police press-representative Toms Sadovskis.

Every fourth person in Europe dies of some form of cancer

In 2011, every fourth cause of death in Europe was tied to one or another form of cancer. In Latvia, on the other hand, cancer caused every fifth death that year.

Latvia’s new Saeima not in a hurry to apply more legislative restrictions on fast loans

Deputies of Saeima’s Economic, Agricultural, Environmental and Regional Policy Committee have yet to discuss the matter regarding the continuation of amendments to the Consumer Rights Law, especially the matter related to reasonable application of penalties for delayed loan repayments.

Newest comments