Securing National Emergency Supply in a sustainable way

Thomas Doepel,
Chief Operating Officer (COO),
Finnlines Plc ,
Helsinki, Finland

For more than 70 years, Finnlines has played an essential role in integrating Finland with the rest of the Europe and Russia and increasing the prosperity in our country. With good seamanship and long-term focus, the company has navigated through several economic storms during the years. In fact, thanks to these challenges, Finnlines is today in better shape than ever.

The current world crisis due to the Coronavirus pandemic has taken the world by surprise and challenged governments, societies and economies globally. Whilst ensuring the safety of its citizens, it is just as important to safeguard the supply of food, medicine and other consumer goods to each country. Finland’s island-like location, and its dependence on sea transportation require frequent and regular liner traffic services. This is nothing new to Finnlines, being the most important player providing maritime transport of rubber-tyred vehicles, i.e. lorries and trailers to and from Finland. In fact, Finnlines alone transports more than one third of the roughly one million trucks moving over the three main sea bridges, Finland–Estonia, Finland–Sweden and Finland–Germany, which are connecting Finland to the rest of Europe.

Maritime vessels specialized in transporting rubber-tyred vehicles, or commonly called rolling cargo, all form part of the RoRo segment. When focusing on freight or non-passenger transport, the short sea RoRo segment can either be served by Ferries, RoPax vessels or RoRo. Thus, it is justified to say that Ferries, RoPax vessels and RoRo vessels are competing within the same market. Ferries, which base their main income on passenger transports and onboard entertainment have quite limited capacity for freight and have a much heavier cost structure than RoPax and RoRo vessels. When referring to the RoRo segment, the difference between pure RoRo vessels and RoPax vessels or Ferries is that they are not allowed to carry more than 12 passengers.

Since the beginning of the Coronavirus pandemic, the Finnish state has granted close to 100 million Euro of aid through imposing public service obligations to existing Ferry operators, and additional state aid is still expected. In Finnlines’ view it is very important to secure the security of supply in Finland. However, the decisions made only to support Ferry operators is not optimal for the security of supply, they are extremely expensive for the society, they discriminate operators in the field and treat them unequally, they distort competition and thus, violate EU State aid rules.

How should the Finnish state instead have secured the security of supply in Finland? The answer is quite simple. While the total sea transport fell by 6 percent in 2020 vs 2019, the number of passengers in foreign shipping fell by as much as 65 percent. If we consider only the maritime link between Finland and Sweden, the drop in rubber-tyred vehicles was around 2 percent, whereas numbers of passengers fell by 73 percent. It is evident that the critical supply should have been secured by suitable tonnage, designed to generate its income from freight, and by utilizing the unused capacity that already existed on the routes.

The inefficiency of supporting the Ferry traffic between Finland and Sweden can easily be translated into environmental figures. The four ferries that had the public service imposed on the route Turku – Stockholm emitted appr. 170 000 tons of CO2 during the nine months that the Coronavirus pandemic affected the traffic in 2020. At the same time, the combined passenger capacity utilization rate was only around 6 percent, meaning that they were practically running empty. If the Finnish state instead would have let the market work or have time chartered a suitable RoPax vessel instead of these four Ferries, securing the same freight capacity, the overall CO2 emissions would have been 81 percent less.

So what can we learn from all of this? First, it is important to recognize that Finland is dependent on sea traffic, its fluency and competitiveness. Almost 90 percent of exports and 80 percent of imports to Finland are transported by sea. Thus, maritime transport services are considered as critical infrastructure for Finland’s security of supply.

The Finnish public-private cooperation is exceptional from an international point of view and the National Emergency Supply Agency plays an important role in securing the security of supply in Finland. Finnlines again, being the market leader in rubber-tyred maritime traffic in the Baltic Sea area and providing cost-efficient regular high frequency traffic to both private and public sector, with the lowest CO2 emission per transported rubber-tyred vehicle, will continue to safeguard the National Emergency Supply in a sustainable way. With its EUR 500 million investment programme for ultra green vessels, Finnlines will not only meet the needs of today but also safeguard the interest of tomorrow. The five new vessels due for delivery in 2021-2023 will help Finnlines strengthen its role of Finland’s critical infrastructure and security of supply. In addition, the environmental footprint of each carried passenger or truck will reduce significantly from current level, being already the smallest footprint of all available options. Sustainable operation equals financially sound operation. Therefore, the Finnish government can rest assured that Finnlines will remain in its role safeguarding the National Emergency Supply during the Pandemic or any other crisis in a sustainable way.

Email: Thomas.Doepel@finnlines.com

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