State-owned Estonian rail cargo operator EVR Cargo handled 2.56 million tons of cargo in the first quarter of 2016, a 26 percent decrease compared to the same period in 2015.
CEO of EVR Cargo Raul Toomsalu stated that freight volume has declined across all categories save for bulk cargo and chemical goods.
“While there’s no reason for particular optimism in the coming months, we hope to become more competitive as a carrier through more competitive pricing on fees for the use of railway infrastructure, which the Ministry of Economic Affairs and Infrastructure is actively working on right now,” Toomsalu noted.
The steep decline in Russian transit no longer affects only the Estonian transit sector. According to the Estonian Logistics and Transit Association, the decline is starting to affect manufacturing companies as well, which will be unable to import and export their goods.
Chairman of the Management Board Andres Valgerist said that transit traffic volume from the first quarter had fallen so much that this was driving up unit prices of goods dispatched from Estonia, which in turn was negatively affecting the international competitiveness of Estonian companies.
Valgerist stated that the association’s proposal was to review railway use fees and the methodology used in levying them. “Estonia needs a comprehensive solution in order for the competitiveness of the entire sector to rise,” he said.
Between 2006 and 2014, the number of ton-kilometers in rail cargo traffic grew 15.5 percent in Latvia and 10.9 percent in Lithuania. During the same period, however, rail transport volume measured in ton-kilometers fell nearly threefold in Estonia by the year 2015. The biggest reduction in freight volume, a reduction of 20 percent, was also registered in Estonia, whereas in Latvia and Lithuania, the decline was ten times smaller, or 2.4 and 1.9 percent, respectively.
Just as in Estonia, the trade relations of many neighboring countries still rely on Russia. Valgerist considered the Finnish and Latvian governments’ reactions to drops in freight volume impressive. “The Finns have already reduced rail infrastructure and navigation fees, and Latvia is considering doing the same,” he said.
The logistics and transit association also maintained that cooperation with all of Estonia’s neighbors was critical for the further development of their field of business.
“Estonia remains in economic isolation in relation to other countries,” Valgerist explained. “Although the international situation is tense, members of the association find that basic cooperation with neighbors on the national level on daily matters of the economy should not be interrupted.”
Editor: Editor: Aili Sarapik