On the crossroads

On the crossroads

In a time of global economic recession few sectors enjoy stability and even fewer experience growth. Transportation and logistics is one of those few. In Latvia this sector has enormous potential, in terms of both geography and legislation, but this potential has not yet been realised due to the fragmentation of the sector and internal competition (for example, competition between Latvian ports).

Today Latvia offers competitive services in transportation and logistics according to experts in the sector, but we are aiming for closer cooperation in order to offer efficient solutions to complex problems internationally. Such solutions would include all stages of the supply chain and handle issues such as port terminals, railways, customs clearance, etc. 

Liberalisation of the railway industry is still in progress and at the present time there are at least two different players in the Latvian freight market besides Latvijas Dzelzcels (Latvian Railway). The number of private carriers will continue to grow in the future as it has done in other countries (in both Europe and the CIS) where this liberalisation has already taken place. Naturally, there are still some areas for improvement (e.g. tariff application).

In the first five months of 2009 Latvijas Dzelzcels Cargo experienced a 0.4% increase in the amount of cargo transported compared with the same period last year, transporting a total of 23.38 million tonnes. This growth is due to an increase in import cargo, a rise of 5.6% during this period. According to Mr Guntis Macs, chairman of the board of Latvijas Dzelzcels Cargo, these figures show that the transport infrastructure in Latvia and the variety and quality of the company’s services meet the demands of the market.  In the near future the situation in the transportation sector will be affected by factors such as price increases, energy resources and the global economic recovery, says Mr Macs.

The sector of air cargo transportation has also made some advances. There are plans not only to develop the potential to import and export cargo, but also to deal with issues concerning transit cargo. Riga can compete very well in the Asian market with regard to transit cargo transportation but we are looking to relax customs formalities to make the process even faster and simpler.

Container transhipment is the main area for future development in transportation and logistics in Latvia. Experts anticipate a considerable increase in the volume of container transshipment via the Latvian corridor in next few years – by as much as 25 times according to some calculations. Therefore, we aim to make significant improvements in the infrastructure of Latvian terminals (ports and land). The expansion and modernisation of the Latvian transport corridor and the optimisation of the transport industry in general (particularly the railway) are some of the main areas for development.



Central Euro-Asia Gateway (CEAG) (www.ceag.lv) is one of the success stories in the transportation and logistics sector in Latvia. The CEAG terminal is strategically located at the crossroads of major railway lines (including the Trans-Siberian and Kazakhstan-China routes) with rail connections to the six nearest Baltic Sea ports. In addition, there are a variety of services provided in the terminal such as customs clearance, assistance in overcoming trade barriers for importers and exporters, logistics services, assembling, and so on. These two factors make CEAG an excellent means of promoting trade between Europe and Asia.

The CEAG terminal is a multimodal logistics centre, handling rail and road transport, storage of goods, customs clearance, sorting, assembling, marking, packing and other value added activities. It occupies a territory of 68 hectares (formerly a military air-base) near Jekabpils. 


                                                                                                                                                            Source: CEAG

What sets CEAG apart from the other terminal based projects in Latvian ports is the type of goods that it handles. CEAG deals with high value products (electronics, spare parts and other equipment) and goods (e.g. heavy goods) that are not welcomed by shipping companies.

The layout of the CEAG terminal has been meticulously designed to use the existing internal road, building and runway infrastructure in the most efficient and effective way. This planning, combined with its strategic position at the crossroads of main railway lines and roads, is a significant factor in CEAG’s success.

In addition to routing container traffic via its multimodal terminal, CEAG offers excellent facilities for international trade between Europe, Russia, the CIS, Central Asia, the Far East and the USA.

From the provision of simple services (e.g. transshipment, container and trailer loading, customs clearance) to the renting of custom-made office, warehouse and industrial premises – CEAG is willing to cooperate in any way possible and will find the best solution for every client.

As well as the special service packages described above, CEAG provides a number of supporting services, which might be necessary for starting a successful business with CEAG. The most popular and most requested of these services are listed below:

• VISA support (including invitation, VISA application procedure, etc.);
• Assistance with accommodation (hotel reservations, flat rental, etc.);
• Legal assistance with work permits;
• A full package of services for establishing (or buying) a company in Latvia;
• Registration of the company as a tax payer and VAT payer in the Latvian State Revenue Service;
• Assistance with bookkeeping (full service possible).

Another successful company in the transportation and logistics sector in Latvia is Riga Central Terminal LLC (RCT) (http://www.rigact.lv). It is the largest multifunctional stevedoring company in the port of Riga and has been providing a full range of port services to its clients since 1996. RCT is a part of the Riga Commercial Port LLC (RCP) holding.


                                                                                                                               Source: Riga Central Terminal

In 2008 RCT handled 7.9 million tonnes of cargo – the highest amount in the history of company. In the same year RCT berths accepted 45 cruise ships and over 60 similar visits are booked in 2009. Every month 2000 TEU are prepared for transit by ship or railroad. 15 ships are unloaded every week and 450 railcars are processed daily.

RCT has at its disposal an area of 82 hectares in which to carry out stevedoring operations. This includes:

• 13 berths
• An area with bonded warehouse status
• Specialised warehouses
• Open storage areas
• Railway access roads

RCT provides the following types of cargo handling:

• General cargo
• Dry-bulk cargo
• Containers, containerised cargo
• Cars, wheeled machinery
• Oversized and non-standard cargo
• Ro-Ro cargo

List of services:

• Railway consignment services
• Stevedoring services
• Customs services
• Warehouse services

Transit cargo is processed for import and export (Europe, Russia, Middle Eastern, North and South America)

A large-scale investment project is underway in the port of Riga to construct a multifunctional terminal on the Krievu Sala island. The project is planned to be completed by 2015.

• Area: 67 hectares
• Terminal status: free zone
• 7 berths with a total length of 1760 m and a maximum draught of 14.5 m

Cargo capacity:

• Dry-bulk cargo (12m tonnes)
• Ro-Ro, general cargo (0.5m tonnes)
• Liquid-bulk cargo (0.2m tonnes)

                                                                                                                                   Source: Riga Central Terminal

Sources: LETA, Kapitals, CEAG, Riga Central Terminal