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Cheap oil preventing Transiidikeskus from launching north-south shipments

The Estonian company AS Transiidikeskus, which intended to launch north-south shipments of freight by rail already last summer, has shelved the plan because rail transport is unable to compete with maritime transport as a result of low oil prices, reports LETA/BNS.

"Our north-south transit hasn't got into motion because of low oil prices. Since the anticipated rise of approximately 20% in the price of shipment by sea didn't materialize as a result of the low price of oil, we can't compete with shipment by sea," Transiidikeskus CEO Erik Laidvee told BNS.

The price of shipments was cited by Laidvee as the reason for Transiidikeskus adjourning the launch of north-south shipments also in July 2015. "We're working, but haven't been able to get the project off the ground as price remains the problem. We aren't able at this point to get it down to be competitive with maritime transport," Laidvee said at the time.

In July Transiidikeskus and Port of Tallinn said the project had become stuck behind the inability of Estonian Railways to negotiate on the price.

Laidvee said on Tuesday their relations have improved and they have very good cooperation with the railway company now.

Transiidikeskus has been working on the project as an alternative to sea transport for two and half years now. Its initial plan was for north-south shipments to amount to more than 300,000 tons in 2015 and to one million tons in 2016, made up mainly of Finnish exports and imports such as the output of the wood and paper industry, machinery and chemical products, and building materials.

(Source: http://www.baltic-course.com/eng/transport/?doc=115896)


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