Russia & Finland poised to nurture transport & logistics growth

Traditionally, Russia is Finland’s biggest trading partner, but things haven’t been so rosy in recent years. In 2015, trade fell 35% - but do not be put off. 2017 has fired the starting gun on increased trade between the neighbours.

For transport and logistics service providers, this suggests a greater need for cross-border transportation services – if the growing trade levels seen during the first quarter of 2017 are a reliable indicator.

Finnish-Russian trade soars in 2017

Between January-March 2017, Finnish exports to Russia jumped up by 30% year-on-year, according to data from Statistics Finland. Russian equivalent exports grew at a similar rate too, foreshadowing a recovery in trade levels seen prior to 2015’s drop.

This trend kept rolling across the entire first half of 2017. Some key bulk items, such as chemicals, metal products, and electrical machinery, posted encouraging growths in trade levels.
 
Finnish shipments of steel and other metal products to Russia grew 20%, while chemical exports rose by 13%, while wood and paper exports enjoyed a 9% bump as well.

According to a survey undertaken by the Finnish-Russian Trade Commission earlier in the year, more and more Finnish companies are turning increasingly optimistic toward Russia. 54% of respondents posted growth in their Russian exports in 2016, while a further 64% expect theirs to grow by 2017’s end.

All of these are encouraging signs – and some individual transport companies are experiencing Russian growth, or are planning to boost their Russia-focussed services to cope with increased trade turnover.

Finnish transport & logistics companies see Russian growth

As mentioned above, some Finnish firms are already reaping the benefits of this increased trade activity.

Itella Russia, the wholly-owned subsidiary of Finland’s national post service Posti, has seen increased sales in 2017 – suggesting the company is finding more and more Russian customers for its parcel delivery and logistics services.

In Q1 2017, Itella Russia posted sales growth of 31%, while the group’s total growth across the first six months of the year rose by 15.9%.
 
Third party logistics, representing 22% of Russia’s transport and logistics market, is rapidly emerging as a key market driver in Russia at the moment. Itella Russia’s recovery signals increased desire for intralogistics services throughout the country, which Finnish and foreign specialists can provide.

Private Finnish rail operators eye Russian expansion

The resurgence in Finnish-Russian trade has piqued the interest of Finland’s private rail companies. Now, they are breaking the monopoly on Russian cross-border rail freight held by the VR Group, Finland’s state rail operator.

Cross-border trade was deregulated in 2016, so private firms have begun to offer Russia-bound services.

NR Rail, a joint venture between Finland’s Nurminen Logistics Group and its Russian partners RustransCom, was established in September 2016. Its goal is to grab a large chunk of the Finnish rail logistics market focussed on the Russian market.

Each year, rail cargo traffic between the neighbouring nations comes to around 14-16 million tons, and is worth around $178 million a year.

Fenninrail, another privately-owned Finnish operator, has also started cross-border operations, delivering its first loads in April 2017.

Meet Russia’s key logistics decision makers at TransRussia

Bilateral trade is back in earnest, and more Finnish firms are finding their services and solutions in hot demand across Russia.

For Finnish companies wanting to meet Russia’s top logistical decision makers, suppliers of transport and logistics services, or to demonstrate your products and solutions to the Russian market, there’s only one place to be – TransRussia.

The event is Russia’s biggest transport and logistics exhibition, designed to put international businesses needing transport services in touch with Russia’s logistics service providers.

Want to learn more about the show, or want to find out how you can take part? Contact our team today to get all the information you need on TransRussia.

 

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