Good logistics, better competitiveness

Forest Industry Logistics Manager Outi Nietola hopes that there would be more proactive dialogue between business, civil servants and political decision-makers in Finland.

A chilling example of the lack of such talk is the planned sulphur directive, in which the warnings from industry have not been taken into account in a timely manner.

In international competition, Finnish industry always lags behind compared to production plants located close to the market due to logistics costs.

According to a study by the Ministry of Transport, the share of logistics costs in paper, cardboard and sawn timber produced in Finland is on average 18 percent of turnover.

In Central European industry, the figure is generally well below 10 percent.

However, the industry cannot charge any more for the final product than competitors who have lower logistics costs.

As the Logistics Manager of the Finnish Forest Industry, Outi Nietola aims to ensure that the difference in logistics costs with, for example, Central Europe is as small as possible.

Finland cannot do anything about geography, but logistics costs can also be influenced, for example, by taxation on transport and by maintaining the infrastructure necessary for freight transport.

Nietola defines effective logistics as the sum of its parts. Road, rail and ship transport are essential components and development targets for the forest industry.

Road transport

"The road network is heavily used for transporting raw materials and products. The forest industry wants to draw attention to the condition of the roads, especially the daily trafficability of the lower road network is essential."

Rail transport

“50 percent of forest industry product transport is carried out by rail. Forest industry transport accounts for 60 percent of all rail freight traffic. As forest industry transport volumes have increased in recent years, problems with rail transport have included a lack of rolling stock, poor condition of the rail network and insufficient capacity.”

Ship transport

"More than ninety percent of forest industry products are exported, and more than 90 percent of exports are transported by ship. The forest industry's annual sea transports are 14–15 million tons. The entry into force of the Sulphur Directive in the proposed form would be a change that would significantly weaken the competitiveness of the Finnish forest industry. We will try to influence by all means to prevent this weakening."

"The importance of shipping is demonstrated by the fact that when the strike closed the ports, it resulted in a loss of 30 million euros in export revenue per day for the forest industry. At the same time, the situation also shows the vulnerability of the logistics chain to disruption."

“Half of the forest industry's sea transport is loaded from the port of Kotka-Hamina or Rauma, and over 90 percent of the transport takes place through the ten largest ports. A public discussion on the extent of the port network and the number of ports that should be kept open in winter is welcome.”