Crisis after crisis
After two exceptional pandemic years, the Port of Helsinki is now facing a new kind of crisis after Russia launched a large-scale war in Ukraine.
The coronavirus crisis had a dramatic – and overnight – impact on passenger volumes at the Port of Helsinki. Traffic between Helsinki and Stockholm remained at a standstill for a long time. Yet even during the pandemic, it was the task of ports and maritime transport in general to keep Finland connected to the rest of the world, as this was crucial for security of supply.
“In a way, it’s improved our readiness to respond to the consequences of the Ukraine war, many of which are still unknown,” says Ville Haapasaari, CEO of the Port of Helsinki.
Vehicle-passenger ferry traffic between Helsinki and Tallinn has played an even more important role. Although ships have mainly been operational after the initial stoppages, passenger volumes have remained extremely low during the pandemic.
The war in Ukraine has now put the pandemic on the backburner in people’s minds, even though the virus continues to spread more than ever. Fading concerns about the pandemic are being reflected in passenger numbers at the port.
“After two years, we’re finally at a point where recovery is genuinely on the horizon. There’s been an upswing in passenger traffic over the past couple of months,” says Haapasaari.
He says that one reason for the improved outlook is that the virus is becoming more flu-like, as vaccines prevent most of its worst symptoms. Secondly, restarting tourism has required the opening up of society and the removal of restrictions in general.
“That’s why people have the confidence to travel. 2022, and above all the important summer season, may well become quite a good year for local tourism,” says Haapasaari.
Nine million passengers possible
Stockholm traffic is already operating out of the Port of Helsinki at full capacity, and Tallinn-bound passenger numbers are also increasing. During the pandemic, the port’s passenger numbers fell from 12 million to under four million per year. Haapasaari expects to reach 8–9 million passengers this year. However, the new crisis is impacting cruising. The current and emerging security situation in the Baltic Sea will determine how international tourism recovers. No large-scale influx is expected this year at any rate.
“Asia is still very much closed due to the pandemic, and tourism from there will also be delayed by the Ukraine war,” says Haapasaari.
The war is also affecting cargo traffic.
“Container traffic has faced challenges throughout the pandemic and the Ukraine war has exacerbated them. The loss of Russian imports will make it more difficult to get containers to Finland and will cause further delays in supply chains,” says Haapasaari.
He also considers it possible that some of these impacts will be offset with an increase in road transport, which has been strong over the past year.
Major investments on the horizon for everyone
The new crisis is also accelerating the green transition in shipping, which mostly still lies ahead. Haapasaari says that the next few years will be challenging for the entire shipping industry.
“Reducing emissions and responding to climate change were increasingly on the table during the pandemic, and now the war is further accelerating the green transition. Which means sizeable investments for all shipping operators over the coming years,” says Haapasaari.
Some of the action required for the green transition still lacks concrete solutions. For example, alternatives to replace fossil fuels in shipping are still in the experimental stage.
The Port of Helsinki is currently in the planning and licensing phase of its own development programme. The CEO says that the port’s basic principles have not changed, even though the world has changed significantly.
“This programme will last for an entire decade. If there are any radical changes in our operating environment, we can react to them along the way.
For example, we cannot yet predict construction cost levels in the latter half of the 2020s.” In the same breath, Haapasaari adds that ports plan for decades ahead, that is, across business cycles.
Strategy work begins
The port considers it the right time for a strategy update, and the CEO says that work will begin before the summer.
“As there has been so much turbulence in our operating environment in recent years, our strategy work must also focus on how to respond to these various developments,” says Haapasaari.
He says that the predefined strategic priority for the port is to implement its development programme over the course of the decade.
“Environmental themes and our carbon-neutral action plan will play a central role.”