Ports even more important in an uncertain environment
The past 48 months have sorely tested port resilience. While the headlines have been full of travel restrictions and the undeniable difficulties faced by passenger transport, ports have taken numerous measures to ensure that they remain operational. Without making a big deal about it.
In spring 2020, the political machinery of Brussels – often criticised for its slowness – showed the speed at which it can make decisions: “green lanes” were defined within the European Union to safeguard the smooth flow of freight within the internal market. However, some error of judgement occurred, as initially no Finnish ports were declared for green freight lanes, with the exception of a single land border crossing. This was rectified when the Finnish Port Association pointed out that Finland’s foreign trade is dependent on port border crossings.
We are still in the grasp of the pandemic, and companies with worker-intensive port operations are struggling to control higher-than-average sickness absences.
For more than three years, ports and port operators have been systematically working together on continuity management and joint preparedness. And in quite exceptional circumstances.
The eventualities they were preparing for changed overnight on 24 February 2022, when an unprovoked and openly hostile attack on Ukraine altered the security environment in the Baltic Sea region. Port preparedness took on a new, yet also very traditional, perspective.
At the outbreak of war, humanitarian lanes were set up within the EU to bring civilians and victims of the war to safety. And once again, the decision-making processes of both the EU and its Member States have been swift and determined. We can now see the introduction of two new types of “lanes” for exceptional circumstances – for the movement of both freight and people. A new conceptualisation of the transport system in the EU?
The EU began preparing a package of port sanctions almost from the very outbreak of the war, and the final decisions were made in the run up to Easter. Member States now prohibit any ships flying under Russian colours from entering EU ports. This appears to be a clear-cut decision without any particularly significant repercussions for Finland.
In addition to how Member States are preparing for the acute situation, it is quite interesting to watch how common defence and security policy is developing in the EU. Ports represent critical infrastructure throughout Europe and, along with other critical infrastructure, will inevitably fuel the debate on infrastructure sustainability, technical quality standards, dual-use infrastructure, joint funding for development and, no doubt, also the ownership of infrastructure outside the EU. About half of the EU’s Member States still do not have any pre- or post-transaction processes to check authorisations for the transfer of ownership of critical infrastructure to non–EU operators.
Finnish ports have long-term owners, but the financial viability of these companies still plays a key role in port resilience. The economic and personal sanctions imposed over the Ukraine war – and the resulting counter-sanctions – mean that Russian transit traffic through Finnish and Baltic ports has shrunk to almost nothing. Although transit traffic has only accounted for about 7 per cent of annual traffic in Finland, Russia-linked cargo has been essential for some individual ports.
While they are waiting for passenger traffic to recover, these ports are now facing the prospect of some leaner years in terms of freight. Although we will see the postponement of investments at Finnish ports, their continuity management will definitely not be compromised.