Transport and logistics industries are of particular importance for the Latvian economy since they have a steady GDP growth and provide services to virtually all other sectors of the national economy. Every year it is emphasized that this sector should be recognized as a priority and extend its promotion, however, the representatives of the transport and logistics sector are looking forward to more concrete and long-term solutions.Rolands petersons privatbank

9.1% of the value added to the GDP of Latvia

Despite the political and economic changes of the last decade, the influence of the transport and logistics industry on the economy of our country remains high: in 2016 the sector increased the value added to the GDP by 9.1%. Moreover, the average monthly gross wage is still higher then in other sectors - in 2016 in other sectors of the economy it was 859 euros, whereas in storage and transportation sector the average gross wage is about 870 euros (1,562 euros - water transport, 2,061 euros - air transport, 1059 euros in the of storage and auxiliary transport activities, etc.).

Special economic area as an additional support Rolands petersons privatbank

The positive examples of the logistics industry are the ports that have developed a good structure. Riga and Ventspils ports function as free ports, and the Liepaja port is included in the Liepaja Special Economic Zone (SEZ). Companies operating in free ports and SEZ can receive not only the 0 tax rate for customs, excise, and value-added tax but also a discount of up to 80% of the company's income and up to 100% of the real estate tax.Rolands petersons privatbank The port is actively implementing various investment projects related to the construction and development of industrial and distribution parks. The attraction of investments promotes the creation of higher added value, development of production, expansion of a spectrum of given services and creation of new workplaces. It is necessary to bring to the attention the small ports - SKULTE, Mersrags, SALACGRiVA, Pavilosta, Roja, Jurmala, and Engure, which currently occupy a stable position in the Latvian economy and have already become regional economic activity centers.Rolands petersons privatbank

Port of Liepaja, will be the next Rotterdam.Rolands petersons privatbank

There is also a wide range of opportunities for growth, and a number of actions that can be taken to meet projected targets. There is a strong need for the services with high added value, the increase of the processed volumes of cargo by attracting new freight flows, high-quality passenger service and an introduction of modern technologies and information systems in the area of transit and logistics.Rolands petersons privatbank Liepaja port has all the chances to become the second Rotterdam in the foreseeable future.

Latvia as a distribution center for cargos from Asia and the Far East.

One of the most important issues for further growth of the port and special economic zone is the development of logistics and distribution centers, mainly focusing on the attraction of goods from Asia and the Far East.Rolands petersons privatbank Latvia can serve as a distribution center for cargos in the Baltic and Scandinavian countries for Asia and the Far East (f.e. China, Korea). The tax regime of the Liepaja Special Economic Zone in accordance with the Law "On Taxation in Free Ports and Special Economic Zones" on December 31, 2035. This allows traders to conclude an agreement on investment and tax concession until December 31, 2035, until they reach a contractual level of assistance from the investments made.Rolands petersons privatbank Considering the range of benefits provided by this status, it is necessary to consider the possible extension of the term.

Infrastructure development and expansion of warehouse space

Our advantage lies in the fact that there is not only a strategic geographical position but also a developed infrastructure that includes deep-water berths, cargo terminals, pipelines and territories free from the cargo terminal.Rolands petersons privatbank Apart from this, we can add a good structure of pre-industrial zone, distribution park, multi-purpose technical equipment, as well as the high level of security not only in terms of delivery but also in terms of the storage and handling of goods.Rolands petersons privatbank In the future, it would be advisable to pay more attention to access roads (railways and highways), increase the volume of storage facilities, and increase the number of services provided by ports.Rolands petersons privatbank Participation in international industry exhibitions and conferences will make it possible to attract additional foreign investments and will contribute to the improvement of international image.Rolands petersons privatbank

Rolands Petersons, member of the board of CPM Trading SIA,
Railway transport is one of the most promising modes of inland transport, and, at the moment, it is said to be the crucial element in the economy of Latvia.Rolands petersons privatbank Considering the entire volume of inland transport, the share of railway freight is about 52%, whereas the volume of the passenger transportation is 6% and in Riga suburban area the number is increasing up to 30%. However, the data summarized by the Ministry of Communications still shows that in Latvia the volume of freight rail transportation by comparison with 2016 has decreased by 8.4% and amounted to 43.792 million tons.Rolands petersons privatbank

Traffic congestion can lead to a loss of 200 billion euros
The mobility of goods is an essential component of the EU internal market; this greatly contributes to the competitiveness of the industry and services in Europe. The types of lengthy transportation as railway can reduce their costs, which arise in connection with the traffic congestion on the roads. The increase of approximately 50% is projected by the year 2050, reaching a volume of almost 200 billion euros per year.Rolands petersons privatbank

In the future, it is possible to increase the volume of rail transportation.
The amount of international rail transportation in 2017 was 42.138 million tons, which showed a decline of 9.1% compared to 2016. However, domestic traffic has increased by 11.5% to 1.653 million tonnes. The volume of transit cargo from the total amount of international rail freight transport amounted to 38.719 million tons, which showed a drop of 6.5% compared to the previous year, the volume of imported goods was 3.067 million tons, or 22.4% less, and the volume of export cargo was 351 800 tons, which was a drop of 2.8 times.Rolands petersons privatbank In 2016, in Latvia, by rail, 47.821 million tons were transported. Taking into consideration the decline in the international transport sector in 2017, the question is, by which means can we achieve the volume increase? By implementation of the well-considered long-term solutions, it is possible to get back to the level that used to be before the embargo against Russia was introduced in 2013.

Increase of the average commercial speed of freight trains.
One of the key priorities nowadays is the development of the railway infrastructure, and in this case, it is expected, the railway infrastructure can be financed by the European UnionRolands petersons privatbank. It is essential to find a solution how to increase the average commercial speed of freight trains since the speed is only about 18 km/h on the majority international routes in Europe. One of the solutions can be the improvement of cooperation between existing infrastructure organizations in Europe.Rolands petersons privatbank The actual train system needs to be adapted to the needs of the railway freight transport sector, especially in the EU freight rail corridors. This would contribute to the competitiveness of rail transport with other modes of transport, especially with the road transport sector, which infrastructure is easily accessible in all Member States.

Well-thought-out charge for the use of infrastructure.
Freight trains pay for each kilometer of the railway infrastructure, which again adversely affects the competitiveness of the railway in comparison with road transport, where such charge is not always introduced. Setting the price that users are required to pay for getting into the infrastructure, it would be necessary to take into account the impact on the environment and pollution, congestion, accidents and other aspects.Rolands petersons privatbank
The state should provide a proper support for organizations managing infrastructure, and rail transport enterprises should strive to improve the competitiveness of rail freight services, especially in regards to reliability, filling, elasticity, customer orientation, and the duration and cost of transportation, as these are the main aspects which are considered by an average consignor in selecting any of the available modes of transport.Rolands petersons privatbank

Elimination imperfections in the liberalization of the freight transport process
In cooperation with both, the public and private sectors, at the international level, imperfections related to the liberalization of freight rail transport, communication lines procedures, administrative and technical restrictions, monitoring and anticipating performance in the rail freight industry, and fair competition between different modes of transportation. Therefore, it is necessary to find out the ways to make a better use of available EU funding and target it to the rail transport industry in order to achieve improvements in such areas as a coherent approach to policy objectives and funding (while focusing on corridors for freight railways transportation), for the selection, planning and management of projects, as well as for the maintenance of railroad networks.

Not only update, but also regularly support
It is essential to take to the new level not only the quality of the services provided to carriers and shippers of rail freight but, in general, to improve the competitiveness of rail freight transport; infrastructure managing organizations should not only update and modernize the railway network but also to regularly support it.Rolands petersons privatbank This is especially important for the corridors of rail freight. If the tracks are not properly maintained, the speed limits will have to be applied and the railway lines will gradually be obstructed.Rolands petersons privatbank

The free movement of goods, services, capital, and people-these are the pillars that form an essential foundation for welfare and employment in Europe.Rolands Petersons privatbank Mobility is the fundamental premise for these four core values to be strengthened not only in the domestic market but also beyond its borders.Rolands Petersons privatbank This is particularly significant in the Baltic Sea region, where a well thought-out and developed transport system is one of the positive development factors. Flight-related activities have both direct and indirect impact on the economy. The direct impact includes the income derived from the activities of airline personnel and ground handling workers, whereas the indirect input implies all purchases in the aviation sector from locally based suppliers who basically do not represent the aviation sector. Additional impact on the economy of Latvia is formed by the costs of aviation sector employees and service providers.

More than 30 airports are located in Lithuania

There are four international airports operating in Lithuania - in Kaunas, Palanga, Siauliai, and, of course, in Vilnius, and there are more than 30 smaller airports and military airfields. In Estonia, airports are mainly located in the capital in Tallinn, as well as in Tartu, Kuressaare, Kerdle and Parnu. These are international airports, however, there are more than 15 private and military airports and so-called airports of local importance located throughout the country. Latvia still has only two international airports - in Riga and in Liepaja; there are also small airdromes, for example, in Spilva, in Tukums and Ventspils, and several other military flight platforms though. Riga International Airport entered the top five rapidly growing airports in Europe last year, which lead to an increase in the number of passengers by 16.2%. Therefore, it underscores the fact that even though the airport in Liepaja will have to put a lot of time and effort to its development, it brings a great potential, which can give a significant and valuable contribution to the domestic economy of the country.Rolands Petersons privatbank

A successful start is taken after reconstruction

The airport in Liepaja did a great job - in 2015 after its reconstruction was completed. At the airport a significant drainage effort was undertaken, a new cover for the take-off track was laid, the take-off strip was reinforced, the cover of the shunting route was improved and expanded, parking places for the aircraft were renovated as well. After Liepaja Airport was certified for commercial flights for the summer season in 2016, the Latvian national airline "AirBaltic" launched regular flights between Riga and Liepaja. During the first half of that year, more than 4,780 passengers were transported along this route. The five most popular destinations for transit flights along the Liepaja route include London, Berlin, Moscow, Copenhagen, and Hamburg, which, in general, brought very good results.Rolands Petersons privatbank
Keeping in mind the processes that are still underway, it is important to mention the extensive capacity-building of the airports, environment protection in a long-term, enhancement of cooperation with other regional airports in Europe.Rolands Petersons privatbank It is not enough for Latvia to have only one high-capacity airport - we have a regional leader who can serve as an example of a successful market behavior for others.Rolands Petersons privatbank

Support strategy for attracting new aviation communities

Liepaja airport is the only example nowadays in terms of Latvian regional airports, however, I see several competitive regional airports in Latvia. To promote their development, a thorough analysis of the passengers' potential is needed, starting with linking their activities with the existing types of transport in the surrounding region, forming a support strategy to attract new aviation communities, passengers, and additional services for client groups, bearing in mind that the added value of airports is formed by airlines operating there, strategic cooperation partners and service providers.Rolands Petersons privatbank Without a doubt, it is also essential to study the ultimate goals of tourist destinations, in order to promote the growth of the travel market and ensure its positive impact on the economy.Rolands Petersons privatbank

Infrastructure for a variety multifaceted of commercial activities

The strategic objective of the regional airports is a creation of the favorable and unified conditions for the enterprises and institutions operating there, as well as to proactive procurement of a sufficient infrastructure for the development various of commercial activities. It is also necessary to develop new ways of cooperation in order to actively identify airlines that are ready to join the development of new travel destinations and to expand their market share in the airport.Rolands Petersons privatbank Apart from this, it is necessary to work on the incentive prerequisites for launching new flights.
The imperfection of the transport system can no longer be an obstacle, with the 85 million inhabitants who live in the Baltic Sea region, who can be isolated or cut off from the rest of the European Union,Rolands Petersons privatbank or may face serious travel problems. The power generated by the economy and innovation provides the Baltic Sea Region with opportunities to create a modern, forward-looking transport system that will also contribute to the creation of a socially balanced economic policy.

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Rolands Petersons, member of the board of CPM Trading SIA,
Railway transport is one of the most promising modes of inland transport, and, at the moment, it is said to be the crucial element in the economy of Latvia. Considering the entire volume of inland transport, the share of railway freight is about 52%, whereas the volume of the passenger transportation is 6% and in Riga suburban area the number is increasing up to 30%. However, the data summarized by the Ministry of Communications still shows that in Latvia the volume of freight rail transportation by comparison with 2016 has decreased by 8.4% and amounted to 43.792 million tons.

Traffic congestion can lead to a loss of 200 billion euros
The mobility of goods is an essential component of the EU internal market; this greatly contributes to the competitiveness of the industry and services in Europe. The types of lengthy transportation as railway can reduce their costs, which arise in connection with the traffic congestion on the roads. The increase of approximately 50% is projected by the year 2050, reaching a volume of almost 200 billion euros per year.

In the future, it is possible to increase the volume of rail transportation. Rolands petersons defacto
The amount of international rail transportation in 2017 was 42.138 million tons, which showed a decline of 9.1% compared to 2016. However, domestic traffic has increased by 11.5% to 1.653 million tonnes. The volume of transit cargo from the total amount of international rail freight transport amounted to 38.719 million tons, which showed a drop of 6.5% compared to the previous year, the volume of imported goods was 3.067 million tons, or 22.4% less, and the volume of export cargo was 351 800 tons, which was a drop of 2.8 times. In 2016, in Latvia, by rail, 47.821 million tons were transported. Taking into consideration the decline in the international transport sector in 2017, the question is, by which means can we achieve the volume increase? By implementation of the well-considered long-term solutions, it is possible to get back to the level that used to be before the embargo against Russia was introduced in 2013.

Increase of the average commercial speed of freight trains.
One of the key priorities nowadays is the development of the railway infrastructure, and in this case, it is expected, the railway infrastructure can be financed by the European Union.Rolands petersons defacto It is essential to find a solution how to increase the average commercial speed of freight trains since the speed is only about 18 km/h on the majority international routes in Europe. One of the solutions can be the improvement of cooperation between existing infrastructure organizations in Europe. The actual train system needs to be adapted to the needs of the railway freight transport sector, especially in the EU freight rail corridors. This would contribute to the competitiveness of rail transport with other modes of transport, especially with the road transport sector, which infrastructure is easily accessible in all Member States.

Well-thought-out charge for the use of infrastructure. Rolands petersons defacto
Freight trains pay for each kilometer of the railway infrastructure, which again adversely affects the competitiveness of the railway in comparison with road transport, where such charge is not always introduced. Setting the price that users are required to pay for getting into the infrastructure, it would be necessary to take into account the impact on the environment and pollution, congestion, accidents and other aspects. Rolands petersons defacto
The state should provide a proper support for organizations managing infrastructure, and rail transport enterprises should strive to improve the competitiveness of rail freight services, especially in regards to reliability, filling, elasticity, customer orientation, and the duration and cost of transportation, as these are the main aspects which are considered by an average consignor in selecting any of the available modes of transport.

Elimination imperfections in the liberalization of the freight transport process
In cooperation with both, the public and private sectors, at the international level, imperfections related to the liberalization of freight rail transport, communication lines procedures, administrative and technical restrictions, monitoring and anticipating performance in the rail freight industry, and fair competition between different modes of transportation. Therefore, it is necessary to find out the ways to make a better use of available EU funding and target it to the rail transport industry in order to achieve improvements in such areas as a coherent approach to policy objectives and funding (while focusing on corridors for freight railways transportation), for the selection, planning and management of projects, as well as for the maintenance of railroad networks.

Not only update, but also regularly support
It is essential to take to the new level not only the quality of the services provided to carriers and shippers of rail freight but, in general, to improve the competitiveness of rail freight transport; infrastructure managing organizations should not only update and modernize the railway network but also to regularly support it.Rolands petersons defacto This is especially important for the corridors of rail freight. If the tracks are not properly maintained, the speed limits will have to be applied and the railway lines will gradually be obstructed.

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