Port of Helsinki
08.06.2020 //
Kimmo Kallonen
Port of Helsinki

Ports central to security of supply

The importance of maritime transport in maintaining security of supply has been highlighted during the coronavirus pandemic, says Ville Haapasaari, CEO of the Port of Helsinki.  In particular, he would like to thank all of the port’s various operators for their willingness to cooperate during crisis conditions.

In public debate, the coronavirus pandemic has raised topics that would be taken for granted under normal circumstances. When foreign cargo traffic runs smoothly, no one really pays much attention. However, security of supply has made the headlines almost daily in the exceptional circumstances of recent months. 

“Ports have now focused on ensuring business continuity, that is, how port traffic can be safeguarded in pandemic conditions. Maintaining security of supply has become our number-one priority,” says CEO Ville Haapasaari.

In recent years, logistics has been focusing on financial and operational efficiency, and supply chain punctuality. However, when warehousing periods and volumes are driven down to the minimum in the name of cost-effectiveness, the chain becomes more sensitive and susceptible to disturbances.

“This is especially true within the European market. And as we operate at the edge of this internal market, our supply chain is particularly sensitive.”

Haapasaari reminds us that continuity planning to ensure security of supply has been done before, for example, on the basis of experiences gained from swine flu and the SARS pandemic.

“However, no one was able to predict such a dramatic change. In that sense, we’re in a completely new situation. Joint preparedness planning has now been carried out successfully with both customers and port authorities, such as customs and the Border Guard. An up-to-date picture of the situation has been maintained and is being continually updated. Cooperation has gone swimmingly,” says Haapasaari.

A significant proportion of Finland’s foreign cargo traffic arrives on wheels via passenger-car ferries. When passenger traffic was stopped in March, the government coffers quickly provided enough support to maintain an adequate level of ferry traffic.

“A prompt decision was made to support passenger shipping companies. The National Emergency Supply Agency was very quick to react to the situation.”

Cargo traffic has remained moderate

The Port of Helsinki is being cautious in its traffic volume forecasts for this year. The volume of cargo traffic was expected to remain about on par with last year, although with the knowledge that economic growth was already showing symptoms of slowing at the end of 2019. Slight growth was predicted in passenger traffic. 

“2020 got off to a good start. Although disturbances in labour markets had a minor negative impact on cargo traffic during the first few months of the year, favourable growth was seen in passenger traffic. All in all, early 2020 was good. The first signs of problems were seen in mid-February, mainly in container traffic bound for China,” says Haapasaari.

“March saw several dramatic turns. There was a sharp decline in overseas container traffic. On the other hand, roro and other cargo traffic has remained fairly steady. In fact, volumes have stayed surprisingly good in all areas except container traffic.”

The greatest changes have naturally occurred in passenger traffic. In practice, passenger traffic has been at a complete standstill for the past few months without a clear view of when things will return to normal, even though travel restrictions are now being gradually removed. 

Vital investments will be made

Now that transport restrictions are being gradually loosened, do we have a clearer idea of what level we can return to and in what kind of timeframe?

“It all depends on how long the crisis stage lasts. Trends in cargo traffic follow economic cycles, and global recovery may take a long time. On the other hand, China is already showing gradual signs of recovery.”

“Growth in passenger traffic requires the situation to stabilise at both ends of the route. It could take a long time for international tourists to return.  However, if people swap Mediterranean and long-haul destinations for more local travel, this may provide a boost for Baltic Sea traffic. Now the key question is whether we can provide people with a safer way to travel,” says Haapasaari.

“There will be no time for cruise traffic to make a significant recovery this year. The coronavirus has dealt a huge blow to the image of international cruise travel.”

Haapasaari says that the coronavirus pandemic has had a significant impact on the Port of Helsinki’s cashflow. Although some investment plans must now be postponed, the projects with the greatest significance for the port’s business will go ahead.
“We were slightly increasing our level of investments at the beginning of the year, but we’ve now been forced to make cost savings in all operations. Although some projects have been postponed, the most important ones will be implemented, such as the deepening of the Vuosaari fairway and investments in carbon neutrality. ‘Not-so-urgent projects’ have been postponed, and we’ll be taking a short time out with them.”