Cost effectiveness and security of supply crucial for logistics

The forest industry is a significant buyer of transport services and logistics play a major role in the sector’s competitiveness. The forest industry has over 150 production facilities around Finland and transport distances for raw materials and products are long. This increases logistics costs in Finland compared to competing countries in Central Europe. Transport, warehousing, and logistics management costs can take up over 15 per cent of forest industry companies’ turnover.

Within Finland, about 80 million tonnes of forest industry raw materials and products are transported every year. Most of this is transported by road (70-80 per cent) while the rest is transported mostly via rail. Annually, approximately 20 million tonnes of forest industry products and raw materials are imported and exported through ports.

Maritime environmental regulation raises costs

Functional and competitive maritime transport is vital for the forest industry. Over 90 per cent of the sector’s production goes to export and over 90 per cent of exports are transported by sea. Almost 75 per cent of exports go to Europe and the Baltic Sea is effectively the only sea route there.

The sulphur directive, which came into effect in the Baltic Sea, North Sea, and English Channel in 2015, raises the cost of the forest industry’s maritime transports by at least EUR 65-90 million annually. Other maritime environmental regulation related to, for example, nitrogen oxides, greenhouse gases, and ballast waters, is being prepared and will come into effect in the coming years.

Maritime regulation that affects only marine areas in the north weakens the competitiveness of Finnish mills compared to mills in central Europe. Environmental regulation must be implemented simultaneously in all marine areas of the world. The total impact of regulations on costs, employment, and competitiveness must be calculated thoroughly before decisions are made.

Security of supply and non-interference important for maritime transport

Illegal strikes in ports are a major bottleneck in Finnish foreign trade. For the forest industry, a single day of port strikes results in losses of EUR 30 million in export income. Strikes delay transports and weaken Finland’s reputation as a reliable supplier. Furthermore, the maritime transport chain could be made more efficient via more flexible working hours in ports’ stevedoring operations.

Icebreaking also affects the efficiency of maritime transport. Icebreaking capacity must meet demand even in harsh winters. Icebreaking in Finland is financed via waterway charges, which adds to industry’s costs. The Finnish Forest Industries Federation (FFIF) has proposed that, in future, icebreaker acquisitions be financed directly from the State budget.

More efficiency into road transport

In autumn 2013, Finland allowed 68-tonne and 76-tonne articulated trucks on roads, up from the earlier limit of 60-tonnes, and increased trucks’ maximum height limit from 4.2 metres to 4.4 metres. Additionally, applying for a permit to test trucks that weigh in excess of 76 tonnes became possible for pre-agreed routes. The FFIF fought hard for the reform, as it makes transport more efficient, reduces costs, and lowers fuel consumption.

In the forest industry’s roundwood transports, it is very common to use larger trucks. Furthermore, the sector is testing different kinds of 84-104-tonne trucks in various parts of Finland.

Additional information

Outi Nietola

Manager, Logistics

+358 40 194 4776