The freight sector is set for steady growth in 2012 and over the medium term term to 2016. The air freight sector will lead the way, growing by 7.14% in 2012 and 8.28% on average to 2016. The Port of Tallinn and the road freight sector are set for similar growth patterns, averaging 3.18% and 3.90% respectively, while the rail freight sector is forecast to lag behind the rest, averaging just 1.63% between 2012 and 2016. This is due primarily to the new Ust-Luga oil terminal in Russia becoming operational, as previously Estonia's rail sector had played a major role in transporting Russian oil and oil products to market.
Headline Industry Data
- 2012 air freight tonnage throughput forecast to increase 7.14%.
- 2012 road freight tonnage throughput forecast to rise 2.50%.
- 2012 rail freight tonnage throughput forecast to grow 1.01%
- Total trade (imports plus exports) in real terms is set to grow 10.45% in 2012.
- The Port of Tallinn will see gross tonnage growth increase 4.39% in 2012.
Key Industry Trends
Estonian Rail Freight Hit By 'Ust Luga Effect'
The Ust-Luga oil terminal, which began operations at the beginning of 2011, is to have a detrimental impact on Estonia's rail freight sector owing to Estonia being marginalised in the transportation of oil, losing two trucks a day, according to Estonian Railways' chairman Kaido Simmermann.
Port Of Tallinn Looks To Central Asia As Russia And China Withdraw
The Port of Tallinn is attempting to enhance its role in the box shipping sector, and although it appears to have lost the Chinese port of Ningbo as a partner, it is making headway with Central Asian states.
Tallinn Boxes Clever With Container Diversification Strategy
We believe that the reasons for the increasing emphasis on the role of boxes in the throughput mix at the port of Tallinn as of June 2011 are twofold. First, the port is attempting to diversify away from relying on Russian oil, a source of cargo that may well dry up in the medium term. Second, given the port's geographical position, it is attempting to fulfil its potential as a maritime gateway.
Key Risks To Outlook
On the upside, whatever the reason for Tallinn's expansion of its container role, the facility's strategy is working. Year-to-date figures as of September 2011 showed that box throughput at the port has increased by 18% year-on-year to 58,610 20-foot equivalent units (TEUs), with the facility managing to return to its pre-downturn (2008) throughput level.
On the back of the port's box drive, BMI has factored up its forecast for the port's throughput in 2011, projecting a year-on-year increase of 16.6%. Over the medium term (2012-2016), we forecast growth to remain steady, but note that there is upside risk to our forecasts on the back of the port's ongoing strategy to increase container throughput and entice more clients.
As mentioned above and covered in more detail in the Trends and Developments section of this report, the fact that the Ust-Luga oil terminal began operations last year will have a significant knock-on effect on the maritime and rail sectors in Estonia; an obstacle the country must traverse in the coming years.
Click for Report details:Estonia Freight Transport Report 2012
