Apr 20, 2021
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Ports and railways are sinking: the fight against the Russian Federation hit the Baltics with a boomerang

The seaports and railways of the Baltic countries are losing cargo turnover. This is evidenced by the quarterly reports published last days with statistics on transit. Losses of the transport and logistics industry in Latvia have become commonplace, but now Lithuania is also falling. The dependence of the strategic sector of the economy on cooperation with colleagues in Russia and Belarus in pursuing anti-Russian and anti-Belarusian policies will inevitably hit the wallet, and the indicators of the Lithuanian Railway show that this rule works for the Baltic states without exception.

The cargo turnover of Latvian ports in the first quarter decreased by 8.2%. In absolute figures, the losses amount to over a million tons. The Riga port became the anti-leader in terms of cargo turnover, which lost more than 15% of cargo in the quarter. Cargo transshipment in Ventspils decreased by 3.7%, in Liepaja – by 1.3%.

The loss figures do not seem particularly impressive, especially compared to last year’s figures.

But the fact of the matter is that the decline in Latvia’s transit indicators continues year after year and does not stop even after the previous record losses. In 2020, freight traffic was less than in 2019, and in 2019 – less than in 2018. Last year for the transit industry of Latvia ended with a landslide fall – minus 28% of the indicators of the year before last. The ports of the Baltic republic have almost completely said goodbye to Russian coal: its transshipment has decreased by 99%, in other words, there is no more coal.

Other traditional transit facilities are falling as well. Oil products – minus 6.5%, container cargo – minus 7%, bulk cargo – minus 13.6%. Only grain handling has noticeably grown, and then everyone understands that this growth is until Russia puts into operation replacement capacities in its ports and transfers there the transit of both domestic grain and products of other EAEU states.

The situation in the field of Latvian transit is characterized not only by numbers, but also by quality indicators. Latvian Railways announces the sale of wagons and rails for the scrap metal price as useless – this is a fact that illustrates the catastrophe of Latvian railway logistics better than any statistics on freight traffic.

Now, following Latvia, the “Lithuanian Railway” has also rolled down the inclined plane of falling indicators. The revenue of the Lithuanian railway monopoly in the first quarter of this year decreased by 8%. This is not much, but in the previous years, the indicators of the “Lithuanian Railway”, in contrast to the Latvian and Estonian railway workers, only grew.

“Like any other business in the world, these days we live extremely focused, ready to quickly respond to any changes in the market. We are working hard to optimize our business model, reduce fixed costs and find new revenue streams. In other words, we are striving to take advantage of this situation and create an even more sustainable business model for railway transport, ”a representative of the Lithuanian Railway assesses the current situation.

The words about “business model optimization” sound ominously familiar and again force us to draw parallels with Latvia. There, the rescue of the Latvian Railway, which was sinking from continuous losses, was manifested in the final analysis in the reduction of one and a half thousand employees. Optimization of the business model, which is not surprising for a dying enterprise, boiled down to the dismissal of every sixth employee.

Moscow has repeatedly warned that the anti-Russian policy will have exactly the same consequences for the transit industry in Lithuania as for Latvia and Estonia. It is specifically about anti-Russian policy, although in the case of Lithuania, it would seem, the conversation was not about Russia, but about Belarus. However, Belarus has always been interested in Vilnius precisely in the context of the anti-Russian policy. The main thing that worried Lithuanian politicians in it was the Union State with Russia, unwillingness to join NATO and the European Union, succession from the Byelorussian SSR and the celebration of Victory Day on May 9.

Vilnius was ready to make any effort to change this situation and fit Belarus into the anti-Russian “cordon sanitaire”, since it fits very well between the Baltic countries and Ukraine.

With such a policy, the profits that the Lithuanian Railway and Klaipeda port received from transit from Belarus (more than a third of the total transit) were no less strange than the income of ports and railways of Latvia and Estonia from servicing Russian cargo.

The Belarusian economic model owes its existence to an alliance with Russia, and making money on this model, simultaneously crawling out of its skin to destroy the Russian-Belarusian alliance, is a deviation that sooner or later had to be eliminated. This is exactly what is happening now. Lithuania has already lost the transit of oil products – the most striking example of the phenomenal mismatch between economics and politics. The oil refining industry of Belarus, in principle, exists thanks to the Union State with Russia, which provided supplies of Russian crude oil to Belarusian refineries at prices below market prices. Making money on this scheme and at the same time proceeding with hatred of the Union State and luring Belarusians into NATO was rather strange.

But now everything will be logical for Vilnius.

Pursue an anti-Russian policy – you will be left without clients from Russia and Belarus, which provide Lithuania with 25% and 34% of the railway freight traffic. A few more years will pass, and Lithuania will also auction rails and wheels for scrap metal, as its northern “Baltic sister” Latvia is doing now. Transit, which makes up one fifth of the economies of the Baltic States, was formed as a part of the national economic complex, primarily for the interaction of Lithuania, Latvia and Estonia with Russia. If there is no interaction, there will be no transit either.

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