Maritime Transport

Part 3
Maritime transport in Finland
Finland’s foreign trade
• Finland’s economy is greatly dependent on foreign trade: almost 40 per cent of Finland’s GDP is
imports, and exports have approximately the same proportion. Finland’s biggest trade partner
is Germany, followed by Sweden and Russia. Almost three quarters of Finland’s exports go to
Europe.
• Exports are mainly shipped by sea. In 2018, 78 per cent of imports and 92 per cent of exports
measured in weight were shipped by sea.
• A relatively high proportion of Finland’s unitized cargo is transported in trucks and trailers as
opposed to containers. Containers are mainly used for exporting outside Europe, whereas
transportation within Europe is operated by trucks and trailers for the main part.
• Finland’s exports and imports differ greatly from one another. Exports are mainly produced by a
few large industrial companies in forestry and the metal and mechanical engineering industries.
The number of importers is greater, and there is more variety in imported products. Most
imports are raw materials, energy products, consumer goods and investment goods.
Shipping in Finland
• A little under 35 per cent of Finland’s foreign trade is shipped on Finnish vessels and the
rest on foreign vessels, because foreign ship companies have so far had competitive
advantages.
• The core strategy of Finnish ship companies has been specialization in their own area of
expertise, which is why most Finnish ship companies have no domestic rivals.
• Most Finnish shipping companies only focus on short-sea shipping on the Baltic Sea or
from the Baltic Sea to the major ports in the North Sea, where the cargo is transshipped
into bigger ocean carriers.
• Because of geographical limits and small cargo loads, Finnish ships are relatively small. A
special characteristic of the Finnish ship companies are their ice-strengthened ships, as a
result of which many Finnish ships only need support from icebreakers during the coldest
winters.
SECURITY OF SUPPLY
• In the past few decades, logistics costs have been cut by reducing inventories. When a
production company minimizes its buffer stock, it has to have a secure transportation system
that can deliver supplies in time and reliably.
• Finland’s industries are nowadays very dependent on regular deliveries, and a buffer stock of
one-three days is common in many industries.
• In many of Finland’s most important export industries, for example in the energy industry, the
amount of raw materials and products transported is so large that maritime transport is the
only viable mode of transport.
• In the spring of 2010, a stevedore strike halted about 80 per cent of Finland’s foreign trade
deliveries. The strike prevented companies from exporting their products or importing the raw
materials, components and spare parts they needed. The companies affected by the strike
tried to prepare by overstocking, rescheduling deliveries, delivering products to customers
from other locations and in extreme cases even buying the products from competitors.
Ports in Finland
• There are around 60 ports in Finland, and 15 of them process more than 1 million
tonnes of products. Product flows are concentrated in the 10 biggest ports – more
than 80 per cent of cargo travels through them. There are also about 10 ports in
Finland’s Saimaa lake region, handling a combined 1.2 million tonnes of cargo.
• All Finland’s ports serve a large geographic area, and in practice most of the ports
serve the whole country. There is also a lot of port capacity compared to demand
in Finland, and thus the utilization of infrastructure and equipment in ports with
less traffic is low.
• A part of the reason why there are so many ports in Finland is their importance for
their local economies. Ports employ 2-5 per cent of the workers in each area, and
even more in smaller towns. The indirect employment effect is multiple times this.
CASE: Russian transit traffic
• When the Soviet Union disintegrated at the beginning of the 1990s, Russia kept only a few of the
Baltic Sea ports of the former empire. When Russia was building new ports for itself, the oil-
exporting Primorsk and Saint Petersburg container port, it had to use the services of foreign ports
in Finland and the Baltic region.
• The most common product categories that travel through Finland in transition transport have
historically changed rapidly. For example, between 2005 and 2008 the volume of cars grew
significantly, and 800,000 cars were transported in 2008. However, in 2009 this fell to only 200,000.
• The major transition ports were Kokkola for iron ore exports and HaminaKotka for consumer goods
imports and chemical exports.
• Throughout the 2010s, the volume of transition freight stayed somewhat stable. Since 2009 the
volume of transition exports to the West has been notably larger than transition imports to the
East. Exports to the West started declining in 2006, and imports to East began to do the same in
2012.
Maritime clusters
• A maritime cluster is a system formed by the different industries and entities related to the
maritime industry, maritime transport and port operations in the private and public sectors.
They interact with each other on a regular basis, enabling them to benefit from the network
they form.
• In 2017, Finland’s maritime cluster included approximately 1,900 companies, employing some
49,500 people.
• Only a sufficiently large maritime cluster can renew itself and maintain the know-how of the
industry. The size of the cluster also makes the maritime industry less dependent on the
financial situation of individual companies such as ship companies, shipyards or engineering
agencies.
• In many major maritime countries, a significant amount of the income in the maritime cluster
comes from outside the ship companies, for example from ports, maintenance and handling,
building port equipment and of course shipyards.
CASE: The success of maritime states on the
Baltic Sea
• In 1960, the Nordic fleet constituted 14 per cent of the world’s total tonnage,
but in 2008 it was only 8.5 per cent. At the same time, the proportion of
Danish tonnage grew from 1.8 per cent to 3 per cent, thus meaning that the
share of other Nordic countries, especially Sweden’s, diminished.
• All the successful Nordic ship companies have had adequate know-how of the
industry in their home country, and have been able to change their strategy
along with new business opportunities.
• Even when individual ship companies go bankrupt, the maritime industry can
still remain functional as a whole and renew itself as long there is enough
know-how, a variety of company types, education and research.
Revision questions
1. Describe Finland’s foreign trade. Which countries are Finland’s major trading
partners, and how are products transported between them and Finland?
2. What are Finnish ship companies like? What kind of strategies do they
employ?
3. What does ‘security of supply’ mean, and how is it related to Finland’s
maritime transport?
4. What categories can Finland’s ports be divided into?
5. Why does Russia’s transition traffic travel through Finland?
6. What is a maritime cluster? What types of companies are included in one?