Latvian transport plans to minimize the impact of sanctions
Latvian transport has just begun to recover from the consequences of the pandemic, but new difficulties have arisen. The sanctions imposed by the whole civilized world on Russia also affected the logistics segment of the country. The railroads suffered the most damage, and as a result, the allocation of subsidies for airBaltic is still in question. Delivery time disruptions have also been observed in the postal sector, but the government is working to eliminate the inconvenience.
The Latvian railway transport has been carrying an enormous amount of strategic cargo in different directions until recently. The withdrawal of big international business from the Russian market forced the transport sector to change a number of processes in order to minimize losses for the economy. Taking into account global trends, analysts have developed several scenarios and, depending on them, have drawn up strategies for the development of the Latvian railway industry.
The most pessimistic option, experts say, is the creation of an “iron curtain” for the neighboring country. The optimistic scenario assumes that Kazakhstan, China, and Uzbekistan will continue to carry their cargoes through traditional routes to Latvia. However, the best option for local railroad transport would be to maintain transportation with all neighboring countries. The fact is that Latvia follows all sanctions restrictions, but does not impose national bans. According to the government, the general sanctions adopted by the European Union are more effective.
For the time being, passenger transportation has been suspended, with activity only in the cargo sector. And most of the activity is accounted for by those transportations, contracts on which were signed before February 24. This gave an increase in railroad transportation volumes by 10% as compared with the previous period, but according to experts, such processes are caused by inertia rather than steady dynamics.
In order to optimize processes for the current situation, the authorities are developing a new strategy of activities simultaneously for several areas. Special attention is paid to strengthening cooperation with suppliers from Kazakhstan. In this case, the parties are interested in keeping logistics between the neighboring countries and Latvia in full. We should also take into account the fact that a large amount of cargo previously went through foreign ports, and now suppliers are planning to move these goods to Latvian ports.
As for railway transport, it regularly undergoes technical inspections and is ready to carry passengers and cargo. However, there is a risk of staff reduction if volumes do not increase.
The situation with ports is much better since imports from various countries are established in this sector. In order to maintain the current figures, local businesses and consumers need to start cooperating with suppliers from other countries instead of Russian ones as soon as possible.
