Transport and Logistics in...
Transcript of Transport and Logistics in...
Transport and Logisticsin Lithuania:
Alchemistry of crossroads
Market Overview The international competitiveness of Lithuania in the transport and logistics sector is to a large extent determined by its geographical position. With approximately 80% of freight which is transported through international transport corridors passing through Lithuania, the country has become the most important transport centre in the European Union, linking the EU with the East, according to the market research company Datamonitor. The North-South highway, the railway route connecting Scandinavia with Central Europe, and the East-West route that connects vast Eastern markets with the rest of Europe, all figure among the 10 principal freight routes in Europe. The expansive network of central motorways and European railroads, along with the ice-free port of Klaipėda and 4 international airports comprise the key infrastructure of the Lithuanian transport network. Lithuania also has a wide and well-developed high-quality international and national road system. The total length of roads in Lithuania is approximately 79,500 kilometres.
Europe’s Prime Location and Infrastructure • Favourable geographical location - crossroads of North, East and West• EU’s prime transport centre: 2 Trans-European transport corridors crossing the country• Northernmost ice-free seaport on the eastern shore of the Baltic Sea is among the regional leaders• Very competitive transport and logistics costs• Expertise and experience in cooperation with Western and Eastern cultures• Well-developed and maintained rail and road transport network• 4 international airports• 4 multimodal public logistic centres, interconnecting sea, rail and road transport routes
Lithuania is a transit state creating a measurable added value, the gateway of logistics to the freight
flows from the Baltic region to Asia and European destinations.
Strategic Location Geographic Proximity
FINLAND
SWEDEN
NORWAY
UNITEDKINGDOM
NETHERLANDS
FRANCE
ITALY
TURKEY
ODESSA
NorthAtlantic ocean
North Sea
Mediterranean Sea
BalticSea
BlackSea
SPAIN
KIEV
URUMQIBEIJING
ALMA-ATA
MOSCOW
5 DAYS
3 DAYS
2 DAYS
2 DAYS
2 DAYS
4 DAYS
7 DAYS
4 DAYS
3-4 DAYS
15-20 DAYS
7-10 DAYS2-3 DAYS
2-3 DAYS
1-2 DAYS
3 DAYS2 DAYS LITHUANIA
DENMARK1 DAY
LATVIA
2 DAYSBELGIUM
1 DAY
POLAND
1 DAY
GERMANY
MINSK
Black Sea
NorthSea
NorthAtlantic ocean
RUSSIA
BELARUS
UKRAINE
POLANDGERMANYBELGIUM
FRANCE
DENMARK
FINLANDSWEDEN
NORWAY
LATVIA
ESTONIA
MediterraneanSea
CZECH REP.
ROMANIA
UNITEDKINGDOM
IRELAND
ITALY
BULGARIA
GREECE TURKEY
AUSTRIAHUNGARY
LUXEMBOURG
NETHERLANDS
BalticSea
SPAIN
PORTUGAL
LITHUANIA
110 millionBaltic Sea
Regionpopulation
340 millionWestern European
population
250 millionCIS population
Two routes of the international Trans-European transport corridors cross the territory of Lithuania:• I North-South direction corridor (highway “Via Baltica”)
connecting Tallinn, Riga, Panevėžys, Kaunas, Warsaw and its branch IA (Tallin-Riga-Šiauliai-Tauragė-Kaliningrad)
• IX East-West direction corridor - branch IX B (Kiev-Minsk-Vilnius-Kaunas-Klaipėda) and branch IX D (Kaunas-Kaliningrad)
Lithuanian Transport Policy priorities:• Development of North-South transport axis:
Rail Baltica railwayVia Baltica international motorway
• Modernization of East-West transport axis:Public logistics centresCombined transportation
• Klaipėda deep water avant-port
I North-South direction corridor and its branch IA
IX East-West direction corridor - branch IXB and branch IXD
Combined transport shuttle train "Viking"
Rail Baltica
Via Baltica
KALININGRAD
TALLINN
HELSINKI
NETHERLANDS
WARSAW
RIGA
Baltic Sea
GDANSK
KIEV
ILJICHEVSK
VILNIUSMINSK
KLAIPĖDA
I
I
I
IA
IXB
ŠIAULIAI
TAURAGĖKAUNAS
IXD
IXB
Northern Europe Service HUB 2015 The Lithuanian Government has set a strategic goal to be achieved by the country by the year 2015 - to become the Northern Europe Service Hub. By 2015 the share of exports of services should make approximately 1/2 of Lithuania’s total exports. Similarly, it is expected that 1/2 of the total FDI in Lithuania will settle down in the services sector by 2012.
Excellent Infrastructure and Communications Network
80% of the European freight istransported through international transport
corridors passing through Lithuania.
Modal Transport Lithuanian railways carry approximately 50 million tons of cargo and 7 million passengers per year. Direct rail routes link Lithuania with Russia, Belarus, Latvia, Poland, Ukraine, Germany and the rest of Europe, the main transit route between Russia and its Kaliningrad district passes Lithuania. The combined traffic train Viking, which connects the Black and the Baltic Seas (the train leaves from Ilyichevsk port, goes through Kiev, Minsk and Vilnius and reaches Klaipėda in 55 hours (1734 km)), has been operated with success over the past years. In 2010, this container train carried a record number of 41,804 containers (TEU). The delivery time is extremely short, although the train has to cross the state borders of two European Union non-member states on its way. The procedures of crossing the borders take less than 30 minutes. In 2009, the European Intermodal Association announced this project the winner of the 9th annual European - Intermodal Award for best practices.
Lithuanian Railways are at the crossroads of International Freight Transportation Corridor
Compared to neighbouring Eastern Baltic seaport, the port of Klaipėda has the widest shipping lines network with other seaports
FINLAND
SWEDENNORWAY
UNITEDKINGDOM
GERMANY
FRANCE
ITALY
TURKEY
ODESSA
NorthAtlantic ocean
North Sea
MediterraneanSea
BalticSea
Black Sea
SPAIN
KIEV
DENMARK
LATVIA
ESTONIA
BELGIUM
POLANDBELARUS
UKRAINE
KLAIPĖDA
ILLICHIVSK
VILNIUSMINSK
LITHUANIA
Container train “Viking„
East-West direction corridor
North-South direction corridor
The combined transport shuttle train ” Viking” carries freight that reaches Klaipėda from the
Scandinavian and other European countries and transports it further to Belarus and Ukraine in an extremely short delivery time with
border-crossing and custom procedures taking only 30 minutes.
NorthSea
NORWAY
BalticSea
LITHUANIA
TALLINN
RIGA
KLAIPĖDA
VILNIUS
MINSK
KIEV
ST.PETERSBURG
HELSINKI
RAUMA
KOTKA
KALININGRAD
GDANSKSZCZECINSASSNITZ
GDYNIAKIEL
HAMBURG
AMSTERDAM
ROTTERDAM
BREMERHAVEN
ANTWERP
LE HAVRE
BERLIN
WARSAW
KARLSHAMN
CANADAUSA
SOUTH-EAST ASIASOUTH AMERICA
AFRICA
SÖDERTÄLJE
GÄVLE
COPENHAGENFREDERICIA
HULL
FELIXSTOWE
TILBURYRo-Ro lines Container lines General cargo lines
Hinterland transportation of all three types of cargo
TEESPORT
BALTIYSK
Klaipėda seaport is container handling leader in the region
and the northernmostice-free seaport
on the eastern shoreof the Baltic Sea.
Lithuania plays an important intermediary role in transportation of goods from Asian markets to European countries. The modern and technologically well-equipped Klaipėda Seaport is a deep-water seaport providing facilities for long-distance carriage of cargo from Eastern to Western Europe and other continents. The seaport is the northernmost ice–free port on the Eastern coast of the Baltic Sea, with the capacity of 40-45 million tons a year. Klaipėda Seaport has maintained leadership among the Eastern Baltic ports for the last seven years. In 2010, Klaipėda Seaport container handling reached 295.000 TEU or 19 % more than in 2009. According to Business Monitor International report, the ice-free port turnover shall continue to grow at around 6 % per annum surpassing 380.000 TEU by the end of the forecast period of 2011-2015. Dealing with cargo going to and from Russia and Kazakhstan at one end, the port also handles shipments to and from Germany, the Netherlands, the US, South America, Asia, and other destinations.
Lithuania’s 4 international airports have all been included in the Trans-European Transport Network (TEN-T). Inland waters in Lithuania add up to a total length of 902 km, of which 425 km are used to carry freight and passengers. Inland waterway route along the Nemunas River from Kaunas to Klaipėda is a part of the TEN-T network.
Logistics Centres The Government of Lithuania aims to establish public logistics centres of new generation. Modern public logistics centres in Vilnius, Kaunas, Klaipėda and Šiauliai regions shall be established within next five years. Logistics centres, integrated in the international transport corridors, will be located close to the major railway lines and motorways, the railway stations and Klaipėda seaport. They will be well integrated into the common network of European logistics centres and ensure the interoperability of different transport modes in trans-European transport corridors.
The greatest supply of modern warehousing facilities in 2010 remained in Vilnius (334.400 m2), with Kaunas following in the 2nd place (184.300 m2), and Klaipėda in the 3rd place (123.600 m2).
The overall supply of modern warehousing facilities in Lithuania in 2010 accounted for approximately 703,000 m2.
In 2010 the rents of both new and old warehousing premises in Vilnius, Kaunas and Klaipeda regions have seen an average decrease of approximately 10% (with 2009 fall of rents of approximately 35-40%). New warehousing premises are now offered for rent in Vilnius at 2.3–4.3 EUR/sqm, and of old premises of 1.2–2 EUR/sqm.Kaunas and Klaipėda show rents of new warehousing premises at 2-3.8 EUR/sqm, and the rents old premises at 0.9-2 EUR/sqm.In 2011 Q1, warehousing rental costs remained stable and varied from 1.2 to 4.1 EUR in Vilnius, from 0.9 to 3.5 EUR in Kaunas and from 0.9 to 3.8 EUR in Klaipėda.
State’s Strategic Transport and Logistics Projects for Public Private Partnership (PPP)
Project Title Project Value Short Project Description
Rail Baltica & Kaunas Public Logistics Centre
EUR 275 millionConstruction of the railway line of the European standard from the Polish and Lithuanian border to Kaunas. Public Logistics Centre
Via Baltica road section EUR 145 million Reconstruction of Via Baltica road section Mauručiai-Puskelniai (34.5 km)
Vilnius Public Logistics Centre EUR 35 millionDevelopment of centre’s public logistics infrastructure and intermodal terminal
Klaipėda Public Logistics Centre EUR 30 millionDevelopment of centre’s public logistics infrastructure and intermodal terminal
Outer deep-water seaport EUR 1 billion Construction of outer deep-water seaport
Vilnius-Utena road section EUR 35 million Reconstruction of road section (total 60 km)
Source: Invest Lithuania
Largest Logistics Centres Area, m2 City
Senukai Logistics Park 70,000 Kaunas
Laistai International Trade Center 32,000 Klaipėda
Tromina 30,000 Vilnius
Kaunas Terminal 30,000 Kaunas
Business Park E67 28,000 Panevėžys
Dobrovolė Logistics Centre 27,500 Vilnius
AD REM Logistics Centre 27,000 Vilnius
Via Baltica Logistic 27,000 Kaunas
Kirtimai Logistics Centre 26,500 Vilnius
Klaipėda Business Park 24,000 Klaipėda
Žarijų BPT Logistics Centre 21,900 Vilnius
GLC Logistics Centre 21,600 Vilnius
Vingės terminalas 21,500 Vilnius
Vilijos Business Park 21,000 Vilnius
Lavisa Customs Warehouse 21,000 Kaunas
Vingės logistika 20,000 Klaipėda
Source: Invest Lithuania, Colliers International
ToP 5 Logistics operators GLA (m²)
Girteka UAB 100,000
Ogmios Group 80,000
Vingės logistikos grupė 54,000
VPA Logistics UAB 47,000
Ad Rem UAB 42,000
Source: Invest Lithuania, company data
Quality Index Cost Index
The aim of the benchmarks is to identify the most attractive location for a particular investment project.
This study highlights Lithuania’s absolute advantage against other European locations in terms of the lowest labour costs, general business environment and living environment.
Location Labour Cost
Czech Republic 3,144,354
Denmark 8,211,332
Finland 7,200,064
Germany 9,185,569
Lithuania 1,900,580
Poland 2,335,363
Sweden 8,292,884
UK 4,952,070
Source: fDi Intelligence,from the Financial Times Ltd (2011)
LITHUANIA Czech Rep. Denmark Finland Germany Poland Sweden UK
140
120
100
80
60
40
20
0
Case study: Logistics centre benchmark by fDi Intelligence from the Financial Times Ltd (2011)
fDi Benchmark – Location Attractiveness Index
The benchmark study examines the following key investment criteria for establishing and operating a Logistics centre in Lithuania, Poland, Germany, Finland, Denmark,
Sweden, Czech Republic, and the UK: (1) costs competitiveness, including labour costs and other operating costs, and (2) quality competitiveness,
including general business environment, labour availability and quality, presence of an industrial cluster, infrastructure and
accessibility, and living environment.
Lithuania today offers one of the most
attractive value-for-money solutions in Europe, when it
comes to establishing a logistics centre.
fdi Intelligence, from the Financcial Times Ltd
FDI Attractiveness Index
Germany Poland Estonia Finland Germany Latvia Sweden LITHUANIA
25
20
15
10
5
0
Logistics Costs by Region as % of Turnover,Manufacturing Companies (n=450)
Source: LogOn Baltic: State of Logistics in the Baltic Sea Region Report
Container Throughput in the Baltic Sea ports, thous. TEU
KLaIPėDa Riga Tallinn Ventspils
400
350
300
250
200
150
100
50
0
214
232
321
373
248
295
169177
212207183
254
128
181
131152 152
181
117
0.3814
014
Source: seaports’ data
2005
2006
2007
2008
2009
2010
Major Trading Partners Exports by Country of Origin, %, 2010
RussiaGermanyLatviaPolandNetherlandsBelarusEstonia
United KingdomUkraineSwedenFranceDenmarkOther
23.215.6
9.8
9.6
7.7
5.55.25.0
4.93.6
3.6
3.3
3.0
All other logistics costs
Logistics administration costs
Inventory carrying costs
Warehausing costs
Transportation costs
Imports by Country of Origin, %, 2010
RussiaGermanyPolandLatviaNetherlandsItalySweden
BelgiumEstoniaFranceChinaFinlandOther
17.5
32.6
10.9
8.86.34.4
3.33.3
3.22.92.62.41.8
Source: Statistics Lithuania
Lithuania has muchto offer the foreign investor
seeking to set up in the Baltic regionas a springboard to the East
as well to the wider European market.
UK Trade & Investment, Cambridgeshire
The Baltics offer lower coststhan Western Europe but with
the regulatory certainty of the EU. Financial Times
Salary RatesLabour costs in Lithuania are more than twice lower than those in other EU countries and the US. The minimum monthly wage in Lithuania is currently 232 EUR, and the minimum hourly wage is 1.4 EUR. The average gross monthly earnings have decreased due to the economic recession. after reaching a peak of 672 EUR in 2008 Q3, they reached ~600 EUR in 2011.
Average yearly gross salaries of Transport and Logistics personnel, EUR
Role Lithuania Czech Republic Denmark Finland Germany Poland Sweden UK
Business Unit Manager 44,070.99 63,848.39 86,902.65 83,954.04 112,992.45 45,990.31 93,265.99 69,472.35
Sales Executive 17,021.02 25,698.03 56,587.17 50,659.04 67,183.64 16,846.07 55,619.54 37,432.44
Head of Logistics 78,922.32 114,339.86 120,363.64 121,821.80 156,148.00 83,241.47 140,903.83 120,550.03
Junior Warehouse Operative 6,182.22 9,722.35 35,371.15 26,896.60 38,832.67 7,472.62 38,114.62 19,513.49
Logistics Clerk 10,096.43 15,878.53 42,777.07 38,948.50 49,044.11 10,474.89 42,578.20 24,298.16
Logistics Officer 12,732.06 19,222.58 46,935.07 40,621.93 55,048.29 12,205.80 45,026.52 28,613.13
Logistics Supervisor 15,893.66 23,995.97 52,839.21 47,303.72 62,733.84 15,730.29 51,935.67 34,953.17
Senior Warehouse Operator 7,621.83 11,986.81 43,374.85 36,285.15 45,159.77 9,088.99 40,851.04 22,028.09
Warehouse and Distribution Operative 7,536.02 11,851.86 42,886.51 35,876.64 44,651.34 8,986.66 40,391.12 21,780.09
Warehouse Manager 23,779.47 35,902.04 61,428.92 54,933.34 76,294.32 24,110.37 63,300.46 45,225.00
Warehouse Supervisor 11,730.22 17,710.02 43,241.90 37,425.53 50,716.72 11,245.37 41,483.53 26,361.65
Facilities/Office Services Specialist 18,156.49 27,412.69 56,077.22 48,610.67 67,706.08 17,800.60 53,647.38 36,783.03
Driver LGV Class C&E 12.348,00 18.642,00 50.004,00 43.368,00 56.481,00 11.281,00 47.438,00 28.888,00
Truck Driver (heavy and tractor-trailer) 10.381,00 16.327,00 43.985,00 40.049,00 50.430,00 10.770,00 43.781,00 24.984,00
Source: Based on Watson Wyatt and National Statistics 2011: fDi Intelligence from the Financial Times 2011
Tax Incentives and Financial Support Tax incentives applied to businesses establishing in Lithuania cover:
• Tax incentives for investments into new technologies • Tax ”holidays” in 2 free economic zones• 0% taxation on dividends when an investor controls at least 10% of
voting shares in the enterprise for the period of at least 12 months• Land and real estate tax relieves offered by individual municipalities
Average monthly gross wages, EUR, 2010
3500
3000
2500
2000
1500
1000
500
0
Roman
ia UK
Hunga
ry
LITHUANIA
Latvi
a
Bulga
ria
Czec
h. Re
p.
Slove
nia
Croa
tia
Slova
kia
Finlan
d
326437
600 631 714 782 843 9321030
1475
756
Eston
ia
2173
3032
Polan
d
Source: WageIndicator Foundation, Statistics Lithuania
Corporate profit tax incentives for investments into new technologiesCompanies carrying out investments into new technologies can reduce their taxable profit by up to 50%. Investment expenses exceeding this sum can be postponed to later, consecutive tax periods (up to five years).
Tax incentives in Lithuania’s 2 free economic zones (Klaipėda and Kaunas)
• 0% corporate tax during the first 6 years and only 50% of corporate tax over the next 10 years
• 0% tax on dividends• 0% real estate tax
Information and Service Point INVEST LITHUANIA is a team of more than 30 professionals actively working to facilitate foreign
investors in Lithuania, as well as to spread the word all around the globe about immense business opportunities on the biggest market among the Baltic countries. INVEST LITHUANIA is ready to make your dreams turn into a real
success story of your business in Lithuania, the Northern Europe Service Hub 2015.
The agency has helped such companies as BARCLAYS BANK (UK), WESTERN UNION (USA), IDEAL INVENT Technologies (India), SYSTEMAIR (Sweden), MOOG (USA), SEB (Sweden), CIE
AUTOMOTIVE (Spain), IBM (USA), FINNFOAM (Finland), INDORAMA (Thailand), DEMATIC (Germany), RGE (UK), ALBRIGHT INTERNATIONAL (UK), CHRISTIE TYLER (UK),
MARZOTTO (Italy), METSO PAPER (Sweden), INVACARE HOGH (Denmark), GLENDALE CABINS (UK) and many others to start doing business in and with Lithuania. INVEST LITHUANIA.
Working answers.
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Major Foreign Investors in Transport and Logistics
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