10 Jun Leading port sees only minimal changes to throughput during COVID-19
Nerijus Udrėnas, Chairman, Klaipėda State Seaport Authority, reveals investment plans that will retain the Port of Klaipėda’s position as the best in the Baltics
You are chairman of the state enterprise that is responsible for the Port of Klaipėda, Lithuania’s main transport hub and its gateway to the world. From your perspective, how would you assess the country’s current economic position and its outlook in light of COVID-19?
We are a small country and, therefore, flexible in our economic structures and behaviors. In terms of gross domestic product contraction, Lithuania has declined slightly by 0.3 percent, according to the latest statistics. The results of the Port of Klaipėda have only slightly declined since the emergency of the pandemic, meaning that we are quite strong in terms of our fundamentals and in terms of how we flexibly adjusted our economy to the challenge. The numbers show that our clients value the flexibility provided by the port—we still provide 45-46 million tons throughput a year. That is good news for Lithuania’s economy because our investment complements the overall stimulation package of the government. Overall, our operations are well balanced for the economy.
As a key node in Lithuania’s transport infrastructure network, the Port of Klaipėda is one of the busiest port in the Baltics, receiving over 7,000 vessels a year and offering a strategic access point for the region’s importers and exporters. As a nation, Lithuania has embraced digitizalition, creating new economic opportunities and boosting efficiencies of existing industries. Can you describe your authority’s investment in and implementation of new technologies?
We are proud of our IT systems and have about 30 different programs that help the Klaipėda State Seaport Authority and which are integrated with customs, ships and operators. This has been especially helpful during the COVID-19 situation. Automation helps all of our cargo, so this was a competitive advantage in terms of the services that we can provide to our customers and vessel captains.
We have launched a new program for pilots to help ships to enter the seaport. As at Singapore Airport, where it is complicated to enable pilots to land, it used to be difficult at the entrance to Port of Klaipėda, but with our new program pilots are able to remotely enter their ships into the port. In addition, we have a school for operators in the port, where we have a simulator that trains them in piloting of ships. This also helps to allow for smooth operations.
Our operators compete and cooperate among each other in the introduction of technology to their operations as well. For example, technology for booking tracks in advance, selecting the time when they will deliver cargo so we can help trucking companies plan their trips better to deliver the cargo. This kind of technology introduces new tools and helps keep clients satisfied. Overall, we are proud of the excellent level of cooperation between our clients and the port authority—it is a strong and mutually beneficial public-private partnership.
As a gateway to Lithuania, Klaipėda found itself on the frontline of the country’s successful fight against coronavirus. What key measures has the authority put in place during the last few months to maintain full service at the port and build its productivity?
Our technologies were upgraded prior to the crisis. For example, automated transport flows based on railways, which limit the interactions between human clients and operators. Throughout the pandemic, there were still connections going to Germany—vessels, tracks and passengers—and there were some cases of coronavirus found in the port, but no cases at all have been recorded in the corporation. We are well prepared to continue operating smoothly if new cases do emerge.
The global shipping sector is entering a new era with the International Maritime Organization 2020 sulfur cap, now coupled with the challenges of falling trade volumes following the coronavirus crisis. What other global trends do you see disrupting the global maritime sector in the near future?
We are experienced in the global maritime sector and we are close to central Europe. We are aware of the new environmental regulations and support the European Union’s ideas about sustainability and ecology. As we grow our infrastructure—for example, we are deepening the port so that it is 17 meters deep across the channel—we want to do it in a sustainable way.
We also have bunker facilities for the stocking of liquefied natural gas (LNG) fuel, both for ship-to-ship and ship-to-coast. And we have a shipyard to build ships that use LNG fuel. We are technologically close for the market to operate in a safe and sustainable way that respects the LNG fuel restrictions. These combined services are very attractive for our clients.
Lithuania’s Port of Klaipėda retained its leading position among all Baltic seaports in terms of handled cargo volumes in the first quarter of this year and came in fourth in the eastern part of the Baltic Sea. By 2023, more than €350 million will be invested in the expansion of the Port of Klaipėda. How will this expansion plan ensure the port’s economic competitiveness within the region?
We are a state-owned port authority. The planned new investments are in the range that you mention but, according to our calculations, they will attract more investment from the private sector. The port’s land and infrastructure are state owned, but the superstructures are operated by private investors.
This year, we have launched a five-year strategic plan for the port. The government has approved our general and territorial long-term development plan for the port, which aims to increase the area dedicated to cargo. The plan gives us more decision-making power in terms of what and where we would like to construct and develop the technology to increase the cargo area. Cooperation keeps us on a competitive path. The Klaipėda State Seaport Authority is also working in partnership with private operators on a plan to strategically secure a long-term investment.
What will the Port of Klaipėda’s role be in the government’s recently launched economic stimulation plan, “The DNA of the Future Economy”? What plans do you have to contribute to the development of the high value, innovative industries described in the plan?
We work in partnership with the Klaipėda Free Economic Zone and Invest in Lithuania agency toward the creation of more high value jobs and services in the port, in line with the natural direction of the European economy.
For example, one of our operators has developed robots to move rail wagons so the unloading process is less risky. They bring in commodities and ship them to businesses in the same wagon, so we save on logistics. These operators are very competitive and strive to meet the needs of their clients. With new technologies, they create new solutions—what can be added, how to unpack and pack the goods into the containers, how to repair them and so on.
The clients of the port are interested and attracted to these services. This is why the government is planning to approve the territorial expansion of the port.
I was a presidential advisor to Dalia Grybauskaitė, the country’s president until 2019, for Lithuania’s LNG terminal project. In just four years we managed to go from an initial idea to having a real project implemented. We have proved that it is possible to carry out large-scale projects successfully and are very proud of the team that led this program.