Latest EU sanctions create new challenges for Ida-Viru County haulage firms
The latest round of EU sanctions will further reduce the flow of goods to Russia. One of the side effects of the sanctions is the additional challenges it will cause for haulage companies in Ida-Viru County, most of which are involved in transporting goods to and from Russia.
The European Union's tenth package of sanctions against Russia, some of which came into force on Monday, bans the transportation to Russia of a large number of products, all of which could be used to support its military operations. The new sanctions even apply to items such as wrapping paper as well as plastic windows and doors, resulting in a further reduction in the flow of goods between the European Union and Russia.
As a knock-on effect, some haulage companies in Ida-Viru County, northeastern Estonia, which predominantly transport goods to Russia, are set to face additional challenges in order to stay afloat.
AS Narva Auto Board Chair Nikolai Burdakov told ERR, that he had not yet examined the new list of banned goods in detail. However, the sanctions already in place against Russia had already had a strong impact on the haulage company he runs.
According to Burdakov, AS Narva Auto has three times fewer vehicles now than it had three years ago. The company is now also engaging in more and more side activities including auto repairs and parking services instead of just transporting goods, he explained.
For OÜ Garant Trans, another Narva-based haulage company, 70 percent of its freight transport goes to Russia.
However, according to manager Igor Rabtsevitš, the latest sanctions package does not directly affect Garant Trans, as the company mainly transports foodstuffs and medicines. He admitted though, that in general, times are hard right now for transportation companies in Ida-Viru County.
"A lot of transport companies in Ida-Viru County were previously only involved with freight transport to Russia. I know that a large number of haulers have already parked their trucks at the wall and are waiting for better times. Some are closing down and laying off drivers. Bad times are ahead for transportation companies and, I think, only the strongest will survive," said Rabtsevitš.
According to Rabtsevitš, it is not just transportation companies that are affected by the sanctions. Warehouse terminals, car services and repair shops will also be hit. The best way out would be to look for other markets. However, transporting goods to other destinations within the EU may prove difficult for some of the small local firms based in Ida-Viru County.
"In order to operate in the EU market, a company needs new trucks that use less fuel and pay less tax, (as well as) qualified drivers and experienced logistics staff who speak the (local) language. But if you don't have that, it's really difficult to get started," said Rabtsevitš.
According to the Estonian Tax and Customs Board, it is still too soon to assess the full impact of the new sanctions, which came into force on Monday. A clearer picture will emerge once information can be obtained regarding the number of Estonian drivers sent back from border and what loads they return with.
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Editor: Michael Cole