The future of maritime trade in Estonia. Development scenarios up to 2040

The key factor for the trade volumes passing through Estonian ports in future will be where the goods come from and where they are going to. The goods that arrive in our ports are both our own exports and imports, and trade flows in the transport corridors that pass through Estonia.

• The trade flows fed by Estonia’s exports and imports will continue to grow as the economy does so.

• The North-South trade flows in the transport corridors that pass through our ports will grow in future as the Rail Baltica route is built. This will help bring Finnish transit goods to  our ports, and will also allow production and processing facilities to emerge near the new railway and create further added value.

• It is not likely that the East-West transit of energy goods will return to where it was in the 2000s. In the longer perspective, trade may benefit from a structural change in the economy of our Eastern neighbour, which will depend on the economic policy choices made there.

The factors that could most affect the volumes of trade passing through our ports:

• an increase in foreign investment and industrial production in Estonia as part of the trend for nearshoring, in which the investments of Western companies are returned from Asia to their home region;

• structural change in Russia’s economy that would increase the share of industrial production in the economy and the resulting flows of trade through the ports on the eastern coast of the Baltic Sea.

We have developed four scenarios out to 2040 to represent the possible trajectories along which the trade flows served by Estonia’s ports could develop over the next twenty years.

Continuing Development

Estonia’s foreign trade grows gradually together with the economy.  Rail Baltica brings in new trade volumes.

The Pragmatic Eastern Neighbour

Structural change in the Russian economy increases industrial production and trade with the West within industries. The resulting trade flows open up opportunities for the ports of the Baltic states.

A New Wave of Foreign Investment

Deglobalisation, means that part of the production of Western companies shifts from Asia to the European region, which opens opportunities for production in the hinterland of Estonian ports.

The Logistical Dream

There is a new wave of foreign investment and a structural change in Russia’s economy. Both EastWest and North-South trade flows increase, each enhancing the other.

Estonian opportunities

Estonia has no control over external developments. The best way for Estonia to benefit from the opportunities in the future scenarios is to make sure it is a competitive place for production for both foreign and Estonian investors.

The coming decades will see several interesting developments in shipping, including:

• ships using new and less polluting fuels;

• self-navigating ships being used more widely.

– The trend towards automation and digitalisation in maritime affairs is becoming increasingly important and will create opportunities for Estonia to use its strengths in ICT

Authors: Sten Anspal, Tõnis Hunt, Janno Järve from Estonian Centre for Applied Research CentAR