Markku Mäkipere: Finland is an island – luckily

As one of Europe's northernmost countries, Finland's location is often perceived as disadvantageous, as all our main markets are overseas, which means that logistics costs are expensive. Today, approximately 96% of Finland's export and import volume is transported by sea. Only a very small part of our foreign trade volumes is transported via a fixed land connection to Sweden or by air freight. Our location is often compared to an island, because in terms of exports and imports, our logistic is very similar to those of island countries.

An overseas or insular location is generally not considered a strength, although in a sense there are significantly more accessible “neighbouring” countries than land without a coastline. I want to shake up traditional perspectives and bring forward ideas where our location beyond the Baltic Sea could be seen as a competitive advantage and enabler.

Finland has a long coastline. Its impact is significant, among other things, on the location of industries on the coast. The most important regions for Finnish exports are the coastal areas. These areas have the best opportunities to utilise shipping for business purposes. Ship connections and ports not only enable exports, but also the import of raw materials, fuels and components needed by industries. 

Although a logistical location closer to the main markets and by seas that remain unfrozen all year round would be more cost-effective in many ways, we also have our strengths. We are one of the richest countries in the EU area in terms of raw materials, and the large and sparsely populated country also enables several alternative, fossil-free energy production opportunities, which makes electricity in Finland the second cheapest in Europe and makes it easier to establish industrial projects than in densely populated countries.

Without the sea connection, Finland's situation would be considerably worse and more backward than it is now. We would be landlocked like Austria, Switzerland or the Czech Republic, but further away from the market. Besides we have a smaller population, greater distances and more challenging natural conditions. The competitiveness of our industry would hardly be at its current level and our price level would be significantly more expensive than at present. Landlocked countries are always dependent on ports and other infrastructure on the territory of third countries and their capacities. It certainly does not improve the country's competitiveness and the investments in the country. 

Thanks to well-functioning maritime logistics and a comprehensive port network, we are better able to meet climate targets and cost-competitiveness. Maritime transport is the most cost-effective and environmentally friendly long-distance mode of transport per tonne transported. The total volume of Finnish maritime traffic corresponds to the capacity of approximately six million transport units. If all these were transported by road or rail through a third country, there would undoubtedly be emissions and costs at a completely different level than they are at present. Dependence on shipping and our numerous ports have created very high-quality expertise in marine industry and cargo handling technology in Finland.  

The challenge for maritime transport is slowness, but it can also be seen as an advantage. Finland's security of supply with regard to critical raw materials and fuels is at a good level, as the relative slowness of ship traffic and larger batch sizes force us to maintain higher stock levels. In an uncertain situation, nearby and sufficient stocks are only a positive thing. At present, the importance of the sea and the coast for border security cannot be underestimated either. Maritime surveillance is more effective than a land border of similar length.  From a defensive point of view, the long coastline can be seen as a deterrence, as the coast allows more response time than the land border.

The role of logistics, shipping and port operations must be understood correctly in Finland. Finnish ports do not act as transit hubs like the large ports in Central Europe, but they serve Finnish industry and society in particular. Their activities must be based solely and exclusively on the domestic needs. The role of Finnish ports is not understood correctly in decision-making, as they are almost all owned by municipalities. A single municipality or city is not the right unit to decide and make optimal overall decisions that make the best use of maritime opportunities.

Although the openness and free movement of the Baltic Sea in the event of a crisis is currently one of the main concerns, maritime transport must nevertheless be regarded as the safest mode of transport. However, we must prepare for the worst and make contingency plans for it if the sea connection does not always work. Finland's fixed land connections must be developed in order to reduce dependence on a single mode of transport. 

Finland is like an island and thus dependent on shipping. The opportunities it creates must be realized and weaknesses transformed into strengths and competitive advantages that must be enhanced and supported.