Lithuanian Carriers Without Trucks, Latvian and Polish With Profits 0 9

This illustrative story deserves to be included in textbooks on public administration — as an anti-example, a model of how not to do things. Let’s recap the essence: last autumn, the Lithuanian government suddenly wanted to spit in Belarus’s face and abruptly closed the border. But in the end, it affected its own carriers, whose trucks were at that time roaming outside Lithuania, with some being in Belarus. They were then pulled out from there for a long and tedious time, but not all could be retrieved.

The result today is as follows: 300 Lithuanian trucks and semi-trailers remain in the Republic of Belarus. The logistics and transport sector of Lithuania has already lost more than 50 million euros due to this story. Of this, the material damage to the owners of the stranded vehicles is estimated at about 30 million euros.

But the main damage is not in this. Although later Lithuania very reluctantly reopened the border, the situation there remains tense, and threats from the government to close it again are constant. Is such an atmosphere favorable for the transit business? Of course not. Therefore, Polish and Latvian carriers did not miss their chance — they intercepted transit cargo from the Lithuanians.

As the head of the International Alliance of Transport and Logistics (TTLA) Povilas Drizhas bitterly noted, Lithuania is digging its own grave in an industry where eastbound transport accounted for about 100 million euros of the annual turnover of all transports.

"Today, Lithuania risks — and we are already seeing this — erasing itself from the logistics map and the so-called northern transit corridor. Now the entire flow and all revenues — customs duties, payments at terminals, and so on — go to Latvia and Poland. These countries are profiting because the flows from Central Asia and China to the EU are very large, while we are simply losing our share," Drizhas said on the ELTA kampas program.

The Lithuanian government sees things very narrowly: for it, Belarus is an enemy state from which smuggling balloons are launched. But for Lithuanian carriers, as well as for their colleagues from other European countries, Belarus is a transit state through which it is convenient to transport goods from Central Asia and China — the current key trading partners of the EU.

Therefore, according to Drizhas, it is very important to return the trucks stranded in Belarus or, if impossible, to compensate their owners for the losses incurred and reimburse the material damage. But even more important is for the state to clearly define what it will do with transit through Belarus. Because its carriers are in complete confusion.

On the one hand, the European Union is moving towards closer cooperation and normalization of relations with China, which means that the number of goods will increase. For carriers in the Baltics, the most profitable route is to transport goods to and from through Belarus. Going around would take much longer and be more expensive.

On the other hand, Lithuania itself is unable to determine its course: sometimes it is friendly with China, sometimes it is not, sometimes it opens borders with Belarus, sometimes it threatens to close them. And what should Lithuanian companies do in such uncertain conditions?

"Sooner or later, we will have to talk about this — what our political perspective is and what we will do. Will carriers receive a political signal that they can continue to work here, but at their own risk, or is it completely impossible to work, and if we do continue — then what? There are many questions, but today there are no answers to them," Drizhas states disheartenedly. "Companies will have to decide whether to abandon work with Central Asia when both our institutions and the EU are paying great attention to this region — encouraging trade, investments, and allocating huge funds for the development of transport infrastructure to speed up communication between the EU and Central Asia. At the same time, Lithuania says it refuses to work with this region just because it cannot pass through Belarus."

The same is said by Vitaly Gigevich, the owner of the logistics company Kelruva and a member of the Lithuanian Carriers Association. He currently has 12 trailers and 5 trucks stuck in Belarus, but what is even more frightening is something else. "Our direction is completely paralyzed. Thirty percent of cargo goes in transit through Belarus. If these 30% are not there, the remaining 70% will not be either. For example, 70% is gradually disappearing for us. The transit side of Lithuania is losing its status because there are fewer and fewer goods."

Gigevich believes that Lithuania is acting to the detriment of its carriers: "Why is Lithuania currently showing strength, kicking us out of the game and leaving the Latvians and Poles in it? Why didn’t all three countries unite and boycott? Why were we excluded from the game when we did not violate any rules? We did not circumvent sanctions; we strictly checked every vehicle, every code. We were simply kicked out of this game. Our earnings and our contracts went to the Poles. The Poles have doubled or even tripled the price for transportation."

Well, we in Latvia can only rejoice at the foolish decisions of the Lithuanian government, which have turned into market expansion and new orders for Latvian carriers. But the trouble is — we are also not immune to reckless steps from our government. Talks at the top about blowing up the rails towards the eastern border, completely closing the border, severing all trade ties with the Russian Federation — these discussions are also taking place in Latvia.

And if it comes to that in reality, then only Polish carriers will be celebrating.