The Ministry of Economic Affairs and Communications is working on plans to mitigate the impact of declining trade flows between Russia and Belarus, and ports in Estonia.
While shipping of Russian origin had not made up a significant part of trade totals in Tallinn prior to the sanctions issued in the wake of Russia’s invasion of Ukraine, which started a month ago, and vessels sailing under the Russian Federation flag could re-register under the flag of another nation, a common practice in maritime trade, for Estonia’s three largest ports, Sillamae, in Ida-Viru County, Muuga, just east of Tallinn, and Paldiski, in Harju County, the change would be more noticeable.
The three ports are also major employers in their regions and have been fairly dependent on the flow of goods between Russia and Belarus up until now.
Kaupo Laanerand, undersecretary of maritime affairs at the ministry, said that transit between Russia and Belarus accounted for almost half of the volumes in Estonian port overall, and while cargo volumes had not yet dropped significantly, the change was due to arrive, particularly in Sillamae.
Laanerand said: “Taking a look at the size of the city and how much labor the port and the operators located in its territory employ, in the case of Sillamae this comes to hundreds of people. This means that they will be in the most difficult situation, as they are also major employers in the region.”
The ministry is also in constant contact with port operators and companies, to find solutions to alleviate the looming unemployment, he added.
New markets and business directions may be considered, but all this is still under discussion, Laanerand went on.
Margus Vihman, commercial manager of the Port of Tallinn (Tallinna Sadam), said that his company’s work had not been affected by the previous sanctions.
The predicted effects will remain small, though Russian goods will account for a large share of trade flows.
Vihman said: “If we look at the total volume of goods, which was a little over 22 million last year, 30% of it is of Russian origin. However, if we talk in financial terms, that is six million euros for us, so given our turnover is over EUR 110 million, it is not a significant component.”
“We need to work harder to offset trade flows south and north and encourage Estonia’s imports and exports,” said Vihman.
Imposing a port ban on ships flying the Russian flag would not mean a very big setback for the Port of Tallinn, he added.
“We received 60 vessels sailing under the Russian flag last year,” Vihman said.
“The ban means that the Russian shipping register will not receive money, but the ships could be registered in another country, so the money will go to the cash register of another country; the vessels themselves will not be missed,” he continued. (ERR/Business World Magazine)