Heavy and nonstandard cargo
By Olga Pavuk
The BC has conducted research which shows that carriers from Latvia transport heavy and nonstandard cargo to the CIS and the Baltic states with their own vehicles but to Western Europe they haul cargo to ferries, with goods further loaded into the vehicles of European partners. The main internal competitors are St. Petersburg and Tallinn. In the near future orders by ports, oil companies, construction companies, power suppliers and food suppliers can be expected
The transporting of heavy (over 100 tons) and nonstandard (over 10 m) cargo in Latvia is rather sporadic. Nonstandard cargo is usually transported by road or rail as cargo both from the West and from the East is always transported to ports by sea. In addition, registration of such cargo for transport by rail is more complex, first of all with regards to time.
Transport is one of the main economic sectors in Latvia, providing 10% of the GDP. Profits of transport and transit firms exceed 250 million lats per year. However, despite the growth of cargo traffic the profits of the largest carriers, particularly the railway, have decreased in the past two years, which is linked to increased competition in the field of tariffs. According to forecasts, cargo transit from the West to the East will double in the next ten years. The future of cargo transit through Latvia depends to a large extent on a the favorable development of relations with Russia.
Transport by sea. No restrictions concerning transport of heavy and nonstandard cargo apply to freighters. Special rules (in accordance with the International Convention on Protection of Human Life on Sea -SOLAS-74) apply only to hazardous cargo.
Transport on rivers is practically nonexistent in Latvia. There are only several cruise boats. According to the director of the department of development of transport at the Latvian Ministry of Transport, Aleksandrs Konosevics, cargo transport on rivers exists only for short distances within port territories. Barges once used to ply from Jelgava to Riga. Business on short distances is unprofitable, but long distance river ways in Latvia do not exist since the River Daugava was dammed up during Soviet years. A construction project of a canal between the Daugava and the Dnepr has been under consideration for more than three years. However, it will take time before the project may be carried out.
Transport by air. Latvian airline companies do not transport nonstandard cargo with more than 30-50 tons of weight although theoretically and practically it is possible. In the world transport of goods by air amounts to 10% of all transport, the percentage is approximately the same in Latvia. In case of necessity, special aircraft can be rented. The main factor in the transport of goods by air is speed of delivery, besides this, the price may also differ from transport of goods by road by up to a thousand times. For example we may mention a recent airlift of 3-ton helicopter engines. The Internet indicates 9 Latvian firms providing transport of goods by air. But actually there are ,many more.
Transport by rail in Latvia is subject to regulations on transport of goods and passengers by rail. Transport of goods by rail is based on applications by cargo senders registered by the Latvijas Dzelzcels national railway. A sender presents an application for transport of goods no later than 20 days before the planned period of time, which is then specified 15 days before the start of each planned month. Within 5 days after receiving the application the railway is to inform the cargo sender about the acceptance of the application or valid reasons for its rejection. Cargo senders with a permanent amount of cargo may conclude long term organizational contracts with Latvijas Dzelzcels, which does not, however, free them from monthly applications.
Heavy cargo (over 0.5 t per item) and nonstandard cargo in special rolling stocks and accompanied by attendants are loaded and unloaded by the cargo sender and the cargo receiver respectively. A drawback for the transport of heavy and nonstandard cargo by rail is the complex and lengthy procedure of document registration connected with the packing of goods.
Special rules on the railway apply only to hazardous cargo.
Examples of transport of heavy loads by rail - drilling equipment to Russia and Kazakhstan, caterpillars - loaders, bulldozers, bridge sections (from a factory in Jelgava to Lithuania), conveyers, helicopters, construction equipment, turbines for hydropower stations (129 t), equipment for chemical plants (50-60 t) and others. Nonstandard cargo hauled by rail includes turbine lids, special steel constructions and others.
Transport of heavy cargo (over 100 t) and nonstandard cargo (over 10 m) did not exist in Latvia during Soviet times. And today such cargo is hauled usually by single order. To get such a contract is good luck for any carrier. Usually nonstandard cargo is transported by air or rail as cargo both from the West and from the East are delivered to ports. Up to 80% of all such cargo travel in transit.
Curiously enough, both the Latvian Road Directorate and the Association of International Carriers Latvijas Auto deny that there are firms specializing in heavy and nonstandard cargo.
In reality, the transport of heavy and nonstandard cargo can be provided by any carrier in Latvia. However, only some of them own the expensive specialized vehicles. Therefore most forwarding firms usually rent such vehicles from European firms or use other equipment available in Latvia.
Many enterprises have their own transport firms, for example, Latvenergo, Latvijas Finieris plywood, The Latvian Shipping Company, Cido Food Group, Daugavpils Galas Kombinats meat factory, Liepajas Metalurgs steelworks, Turiba food company, Mono distilery, Ogre knitwear, Olainfarm pharmaceuticals, Rebir, Radiotehnika, Raita, UBAK and others. In addition, they do not need a license (if they transport only their own goods). But these enterprises just like others rent vehicles necessary for transport of special (heavy and nonstandard) cargo.
As to nonstandard and particularly heavy cargo, only several firms offer such services. Special equipment is owned by construction firms transporting heavy and nonstandard equipment from one site to another. For example, the second largest construction-erection firm BMGS have special trailers and can transport any cargo in Latvia. It does not have a license for transport abroad, single permits are obtained for cargo transport to St. Petersburg.
Latvenergo is one of the enterprises, which needs nonstandard equipment more than any other business in Latvia. The director of the Latvenergo branch Augstsprieguma tikls high voltage grid, Imants Zviedris, told the BC that the enterprise uses its own vehicles for transporting heavy and nonstandard cargo - heavy trailers ChMZAP-8397 and R-600 and a towing vehicle Tatra-815. Approximately 6-7 cargo loads of this kind are transported yearly. For example, in September 2001 a transformer was transported from Riga port to the TEC-2 thermal power plant and a 64 t heavy transformer was transported from the substation Lauma to Liepaja.
All ports and shipyards in Latvia have their own trailers (the so-called technological vehicles). These vehicles are to be used only for transport from wharves to customs areas but sometimes despite the prohibition they are also used for short distance transport outside port territories.
Contrary to what is expected, the Armed Forces of Latvia do not own any special equipment for transport of heavy and nonstandard cargo. According to the press secretary of the Armed Forces of Latvia, Agnija Strauss, the army has nothing to transport. The country's three tanks are transported with equipment rented in Latvia. However, the press secretary could not name the name of the company used.
Services of forwarding firms
As mentioned above, the transport of heavy and nonstandard cargo is offered by all forwarding firms in Latvia. The Internet indicates 34 firms that offer the transport of heavy and nonstandard cargo. Usually such services are offered by forwarding firms.
However, interviews with forwarding firms and carriers shows that only three forwarding firms specialize in transport of nonstandard cargo - Transporta Ekspedicija, Latsped, Lattransserviss and one road transport firm Anna J. All of them are situated in Liepaja. This is explained by the fact that a ferry line sailing Rostock-Liepaja was opened in Liepaja in 1994 which allow transport of heavy and nonstandard cargo. Liepaja port itself has adjusted to this. The scheme of operations for all forwarding firms is almost the same - cargo is transported from Europe to the CIS and the Baltic states and back; registration - from door to door; permanent partners in Europe provide transport of cargo to ferries in the chain system; cargo is transported to CIS or the Baltic states with owned or rented vehicles. Firms in Latvia mostly use foreign made equipment (Brohuis, Goldhofer, Van Hool and others) for transport of heavy and nonstandard cargo, preferring it to the locally made Mono-Transserviss. The firm Anna J in Liepaja is one of the few road transport firms owning 40 trailers including 10 special trailers for transport of heavy and nonstandard cargo.
Some firms which do not specialize in transport of heavy and nonstandard cargo follow the same scheme used by forwarding firms in Liepaja. Thus the firm Alkom-Trans in Riga provides transport of nonstandard (height over 3.20 m) cargo from Europe to the CIS and the Baltic states. Cargo is transported to ferries by an Austrian partner firm.
The main competitors to Latvia in the transit of heavy and nonstandard cargo are the ports in St. Petersburg and Tallinn - the distance from the Russian border to Tallinn is shorter than that to the ports in Latvia. In comparison to neighboring countries the most unpleasant aspect for Latvian carriers is the expensive permits for transport of heavy and nonstandard cargo, which in addition are valid only for three days. Moreover, in Estonia the procedure involved obtaining a special permit is considerably less complex and cheaper.
At the same time, according to forwarding firms in Latvia, the railway is not a competitor for transport of such cargo by road. And despite the fact that transport by rail is cheaper - the heavier the cargo and longer the distance, the cheaper the transport. The main argument in favor of transport by road is time. Transport of cargo by road takes a couple days whereas transport by rail - no less than a week.
The problem also concerns something else - in Russia a foreign carrier cannot obtain a permit for transporting cargo over 44 t, as in such case inspection is required. To rent Russian vehicles is unprofitable therefore part of the cargo is transported to St. Petersburg through Finland.
All cargo from Europe is transported by Western carriers to ports and further loaded into local trailers. Only Finnish firms transport cargo with their own vehicles. Finland has orders of transport of nonstandard equipment to Latvia and Lithuania.
In the near future Latvia may expect orders of transport for heavy and nonstandard equipment from AZS[shto eta?] which is expanding its network, as well as from the oil company Latvijas Nafta. The reconstruction of the port in Liepaja will require stone-crushers. Equipment is also acquired by enterprises of the food industry, first of all dairies in the process of development and modernization. The Ogre knitting mill plans to build a new 2-3 thousand square meter large knitwear factory. In case the construction project of a new pulp mill in south-east Latvia is accepted, nonstandard construction equipment will be also needed here. Taking into consideration the growth of the construction industry, the demand of construction equipment and equipment for the reconstruction of roads may increase. The construction of hydropower stations will require turbines, generators. Shipyards will need heavy casts, ports and the carriage-building industry - nonstandard equipment.
In addition to Russia, Kazakhstan may also turn to be a profitable market for Latvia with regard to the transport of heavy and nonstandard cargo since its investment possibilities allow it to order from Europe factory equipment for different economic sectors, mainly in oil and gas industry.