Reliable gateway to east
When a customer needs a punctual and reliable delivery to Russia, Finland’s ports are a safe choice.
In transporting goods to Russia, Finland is a natural and efficient transit country, ensuring the best possible risk management. In the latest Global Competitiveness Survey by World Economic Forum, business executives ranked Finland’s ports highest in the Baltic Sea and fifth highest worldwide. The significance of port efficiency is increasing as businesses change their processes towards greater fluidity in line with the lean concept. Companies wish to get goods into production or in store just in time. Unnecessary storage time causes costs that reduce competitiveness.
Improving the efficiency of the chain often brings significant cost savings, but it also increases vulnerability both in trade and industry. This is why the reliability of the logistics chain is now more important than ever.
“If the summer shoe selection arrives too late at the shop, they won’t sell,” sums up Key Customer Manager Sami Orimus of Steveco Logistics.
The aim of the ever-expanding lean philosophy is that the goods should be in the right place at the right time and meet the agreed standard. Businesses wish to cut out everything that is unnecessary and unproductive. In Moscow, for instance, storage space is expensive, so many businesses wish to keep stocks at a minimum. This can only be done if the goods can be guaranteed to arrive upon demand.
Efficient and safe
The success of Finnish ports in the WEF survey did not come as a surprise, since Finland has always depended on a great deal of import and export by sea. East is the only direction in which land connections are available from all of mainland Finland. This is why we have gained high competence in the entire logistics chain over time.
The quality of ports is a sum of many factors. In Finland service reliability, lead times and security score particularly high. Service reliability is crucial in winter, when our modern ice breakers keep the channels reliably open even in the harshest ice conditions.
“In Russian ports, we have faced challenging situations particularly due to congestion. Ice-breaking is also a big challenge in harsh winters,” says Timo Hatva, Logistics Director of Stora Enso, the forest company.
Stora Enso monitors closely the service reliability, handling damages caused and loading efficiency of ports. Cost efficiency is naturally also a key factor to be monitored.
In Finnish ports, many key issues are well taken care of. The number of weekly departures to different directions from our ports is manageable, the shipping services are competitive and container capacity is sufficient at present.
“In order to maintain competitiveness, though, port operations need increased agility and constant development, ” — Timo Hatva.
Good container balance
Finland is a good transit country for container transport also because containers vacated here can always be refilled with exports. On the other hand, around half of containers arriving in Russia’s ports still return empty to find a replacement load elsewhere.
Finland exports a good deal of container-transported goods, so there is always someone to pick up the bill for the return freight.
“In Finland there is an exporter that carries the cost of the return trip in 100% of cases, so the customer is not left to pay for empty container freightage,” says Steveco’s SVP for Sales and Marketing, Tapio Mattila.
If an empty container has to be carried to Rotterdam or elsewhere before return freight is available, the efficiency of the logistics chain is significantly impaired and unnecessary costs are incurred.
The transit freight passing through Finland and Finland’s own significant eastbound exports are mutually complementary.
“They create strong flows that help out others. Strong terminals remain competitive, because they have skilled personnel, adequate operating hours and good technology,” says Timo Hatva of Stora Enso.
This is wherein the challenge lies for Finnish container ports in the future. Competition between ports has increased significantly in recent years, and so it is more challenging than ever to hold on to traffic flows.
“It is important for shipping companies that ports maintain their container balance and two-way shipping. If this cannot be done, traffic will move to other ports and cost pressure amounts,” says Jouni Ahrela, Managing Director in Finland of CMA CGM, a global shipping company.
This is why Finnish ports also need to constantly increase their efficiency.
“They need to be able to provide services at a lower rate 24 hours a day, seven days a week,” Ahrela concludes.
Extensive ICT expertise
Finland, which gave birth to Nokia, has long been passionate about applying modern ICT solutions. This is evident throughout the chain consisting of industry, authorities and operators. The Steveco container terminal, for instance, uses a check-in kiosk for trucks to alleviate rush hour queues and provide services at all hours. The multilingual kiosks can operate in Finnish, English, Estonian and Russian. A similar service is also available online.
Recently Steveco introduced a service called Aviso, which the forwarding agent can use to monitor the containers’ path in real time.
Information technology is a key factor in ensuring agility throughout the chain. Real-time data on the cargoes of incoming vessels helps the ports to plan capacity ahead so that goods move on from the port as quickly as possible.
IT ensures that loading, customs clearance and transportation can all be managed without delays and customers receive their goods on time.
“With our regular customers, containers arriving in Finland leave for Russia the next day. Of course, this requires that all the paperwork is in order,” says Sami Orimus.
Tracks head for east
Modern ports will not alone save the logistics chain if other parts are unreliable. The World Economic Forum’s Global Competitiveness Survey indicates that many factors speak in Finland’s favour besides good infrastructure. These include protection of property, low crime and the judicial system.
Finland’s straightforward relations to the authorities are also a great asset in cross-border operations. For example, Steveco has a representative consulting the National Board of Customs in an expert role. This gives the company a good position to influence many reforms and at the very least be aware of new obligations which may be arise through the EU, Russia or Finland’s national legislation.
Finland’s railway network and roads are well kept in an international comparison. From Finland’s biggest transit port in Kotka, goods can be transported to Russia by road or by rail. This spring Steveco launched container-carrying freight train traffic from Kotka to Moscow. Steveco Logistics also takes care of the final stretch from the Moscow terminal to the customer and returns the empty container to Kotka.
The customer’s requirements determine whether road or rail transport is better.
“Rail transport is an excellent solution for customers with regular large deliveries that should reach the destination simultaneously,” says Sami Orimus.
Local service in Russia
The expertise which Finns have gained of their eastern neighbour guarantees that transit traffic passing through Finland is in knowledgeable hands. Finnish operators know the best route for each customer.
Many Finnish companies are also accustomed to operating in Russia via their local offices. Steveco, too, has sales offices in both Moscow and St Petersburg. Through its local presence the company can provide even better service to customers operating in Russia. When you are near the customers, it is much easier to understand their needs.
Local knowledge is also a benefit for customers exporting goods to Russia. Laws and regulations and their practical interpretations sometimes change quite rapidly. Those operating within the country possess a definite advantage in keeping up.
“Local offices can often be more helpful to customers than those located further afield,” says Sami Orimus.
