Destination Lithuania: Positioning itself as a logistics hub in European Union
Positioning itself as a logistics hub in european union
Lithuania is one of the European Union’s prime transport centres because of two strategic Trans-European Network (TEN) corridors and their branches which run through Lithuania—the NorthSouth highway and the rail route connecting Scandinavia with Central Europe and the East-West route linking the huge Eastern markets with the rest of Europe. Diana Mickevičienė, Minister Counsellor, Embassy of the Republic of Lithuania in India spoke to Cargotalk on other major advantages and facilities.
Lithuania is located on the crossroads of two huge markets: EU and CIS.
Transport and logistics generate around 15 percent of Lithuania`s GDP. The country has four modern international airports, in which one is solely for cargo operations. In addition, the airport at Helsinki in Finland is very close by.
On seaport side Klaipėda, the northernmost and only ice-free seaport on the eastern shore of the Baltic Sea is located in the western part of Lithuania. The port is capable of receiving ships up to 14.5 metres draught and emerged as the leading port on the eastern shores of the Baltic Sea. Klaipėda State Seaport is a regional transport hub connecting sea, land and railway routes from the East to the West. Compared to neighbouring Eastern Baltic seaports, the port of Klaipėda has the widest shipping line network with other seaports. Klaipėda services around 35 million tonne of cargo a year.
Railway transport in Lithuania provides efficient long-distance passenger and cargo services. Lithuania belongs to the Transport Corridor Europe-Caucasus-Asia (TRACECA), an international transit network that enables cargo containers from Lithuania to Central Asia and China. Another example is the Sun Train, which connects Western Europe with China. It passes through Lithuania’s sea port,
Klaipėda, before continuing through Belarus, Russia and Kazakhstan.
“Lithuanian railways carry approximately 50 million tonne of cargo a year. Direct rail routes link Lithuania with Russia, Belarus, Latvia, Poland, Ukraine, Germany and the rest of Europe, the main transit route
We are highly optimistic that exporters, importers, manufacturers and logistics service providers from India will make profit, if they use Lithuania as their logistics hub in this region” Diana Mickevičienė Minister Counsellor, Embassy of the Republic of Lithuania
between Russia and its Kaliningrad district passes Lithuania,” she added. The combined traffic train Viking, which connects the Black and the Baltic Seas (the train leaves from Ilyichevsk port, goes through Kiev, Minsk and Vilnius and reaches Klaipėda in 55 hours covering 1,734 km), has been successfully operated over the years. “The delivery time is extremely short, although the train has to cross the state borders of two European Union nonmember states on its way. The procedures of crossing the borders take less than 30 minutes. The costs of Lithuanian railways are around half of the costs of the German railways and make up around one third of the costs of French railways,” said Mickevičienė.
She also asserted that Lithuania has regionally best network of roads and highways.
“Lithuania is an integral part of the continental TRASECA railway network enabling easy transportation of cargo from Lithuania to Asian countries, including China. India’s major markets the United States and the United Kingdom, Germany and France also use Lithuania’s transport infrastructure as a logistical hub for transportation to and from Afghanistan.
Logistics Centres in Lithuania
Lithuanian logistics centres are very modern and well-integrated into the network of European logistics centres and ensure the interoperability of different transport modes in trans-European transport corridors.
The greatest supply of modern warehousing facilities (according to the figure published in 2010) is in Vilnius (334.400 m2), with Kaunas following in the 2nd place (184.300 m2), and Klaipėda in the 3rd place (123.600 m2). The overall supply of modern
warehousing facilities in Lithuania in 2010 accounted for approximately 703,000 m2. In 2010, the rents of both new and old warehousing premises in Vilnius, Kaunas and Klaipėda regions have seen an average decrease of approximately 10 per cent (with 2009 fall of rents of approximately 35- 40 per dnt). New warehousing premises are now offered for rent in Vilnius at 2.3– 4.3 EUR/ sqm, and of old premises of 1.2–2 EUR/sqm. Kaunas and Klaipėda show rents of new warehousing premises at 2-3.8 EUR/sqm, and the rents old premises at 0.9-2 EUR/sqm. In the early 2011, warehousing rental costs remained stable and varied from 1.2 to 4.1 EUR in Vilnius, from 0.9 to 3.5 EUR in Kaunas and from 0.9 to 3.8 EUR in Klaipėda. The Lithuanian Government has set a strategic goal to become the Northern Europe Service Hub by 2015. “The share of exports of services should be approximately 1/2 of Lithuania’s total exports,” said Mickevičienė.
According to her, Lithuania is a logistics hub or transit point by default. “Strategically located on the EU map, the country provides huge cost benefits (from one-third to half the cost, as compared to Western European countries because of less tax and low labour cost) to shippers and logistics service providers. We are highly optimistic that exporters, importers, manufacturers and logistics service providers from India will profit, if they use Lithuania as their logistics hub in this region,” emphasised
Mickevičienė. She also informed that the Lithuanian government and private companies are keen to strengthen business relationships with India by offering multiple infrastructure facilities, financial incentives (like tax benefits) and other support to interested parties. “Our Embassy in New Delhi is open to discuss any such proposal. Also, we want to extend our support to joint ventures between Indian and Lithuanian companies for any project either in Lithuania or India,” she added. In days to come, the Embassy of Lithuania will organise trade meets in different parts in India, especially in New Delhi, Mumbai, Kolkata and Chennai.
Mickevičienė maintained that there are huge trade opportunities between India, particularly for exports of perishables like seafood, shrimp, fish, flowers and pharmaceuticals.
Favourable geographical location - crossroads of North, East and West Two Trans-European transport corridors crossing the country Northernmost ice-free seaport on the eastern shore of the Baltic Sea; is among the regional leaders Very competitive transport and logistics costs Expertise and experience in cooperation with Western and Eastern cultures Well-developed and maintained rail and road transport network Four international airports Four multimodal public logistic centres, interconnecting sea, rail and road transport routes