Desti­na­tion Lithua­nia: Po­si­tion­ing it­self as a lo­gis­tics hub in Euro­pean Union

Po­si­tion­ing it­self as a lo­gis­tics hub in euro­pean union

Cargo Talk - - Contents -

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.

Ad­van­tage Lithua­nia

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.

Ma­jor Ben­e­fits

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

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