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Logistics – accessibility brings Lapland close to the rest of the world

Lapland is Finland’s largest and most sparsely populated region, and it is situated in a globally interesting location. Due to the long distances within the region, traffic flows keep increasing on roads, railway tracks and the sea and at airports.

Facts

  • Turnover in the transport and storage field €538 million (2017)
  • Turnover increased by 6% from the previous year
  • Five airports and 1.33 million passengers per year
  • Additional investments in airports: €55 million
  • VR’s railway capacity to Lapland: one million seats and 450,000 berths
  • Ajos deepwater harbour and Röyttä harbour, the largest liquefied natural gas (LNG) terminal in the Nordic countries
  • Aurora smart road, test platform for smart traffic and autonomous driving
  • Development projects: deepening of the Ajos harbour route, Bothnian Arc railway track, Arctic Ocean Railway, Northeast Passage ship link and East North data communication cable

Only an average of two people live within a single square kilometre in Lapland. This means that the logistics chains in the region must be in order, as the largest region in the country is also the sparsest in terms of population density. Rovaniemi, Kemi, Tornio and Kemijärvi, the largest hubs in the region, are important junction points in Lapland’s logistics network. The Kemi-Tornio area holds a strong concentration of heavy industry, whereas Rovaniemi is known as a hub for goods and passenger transport. Kemijärvi, in turn, is home to the largest raw wood terminal in Finland.

In a region with long distances, functional logistics are important to ensure the functionality of trade and industry. In 2017, exports in the region of Lapland stood at a value of about €4.2 billion, which is 7% of the goods exports of the entire country. In 2016, the corresponding figures were about €3.6 billion and 6.8%. Almost 90% of Lapland’s exports consist of industrial products: the most important fields of business in the region are the forest, metal and mining industries and tourism.

In 2017, more than 80% of exports in the region consisted of the export products of domestic private companies. Roughly one-third of Lapland’s SMEs engage in export or import activities. Lapland has some 560 exporting companies and about 1,200 importing companies. As such, import into Lapland was valued at about €1.8 billion in 2017 and was almost fully attributable to industrial products (95%).

This has resulted in a positive development in the transport sector’s turnover in recent years. According to Statistics Finland, Lapland’s transport and storage sector’s turnover stood at €538 million in 2017, which represented an increase of almost 6% from the previous year. Within the region, the sector provided about 3,700 person years of employment in some 950 locations.

Air traffic

Functional air links are among the cornerstones of tourism in Lapland, as the majority of international tourists travel to the region by air. In 2018, a record number of 1.33 million passengers passed through Lapland’s airports, and Finavia has prepared for further growth by investing a total of €55 million in the airports of Rovaniemi, Ivalo and Kittilä. Finavia has estimated that the traffic volume will increase at an annual rate of 3–5% and that Lapland’s airports will serve at least two million passengers in 2030. If the rate of growth remains in line with recent years, the two million marker will be reached even earlier than this.

Railway traffic

The state railway company VR’s capacity for Lapland is 450,000 berths and more than a million seats. The volume has been estimated to grow by more than 5% a year as international travel in particular has increased significantly in Lapland in recent years. Continued growth will inevitably result in increased demand with regard to passenger transport.

Finland has placed on emphasis on the development of the railway network and the removal of bottlenecks (e.g. double railway line due north). A functional railway link in the Bothnian Arc area would benefit trade and industry in Finland and Sweden, and providing electricity for the Kemi-Haaparanta link would be an essential step towards achieving this goal.

The oft-discussed Arctic Ocean Railway is particularly interesting in terms of the region’s global accessibility. The planned line would run from Rovaniemi to Sodankylä and, further, to Kirkenes in Norway. If constructed, the railway link through Lapland would make the region an important part of global logistics, enabling railway transport from Europe to the Arctic Ocean and the Northeast passage via Lapland.

The line could be used to transport mining and forestry products from Lapland, tourists, oil, gas and even Norwegian fish. Alongside boosting the accessibility of northern Finland, the Arctic Ocean Railway has been estimated to benefit business in Lapland, but the plan has also been criticised as a wasteful investment that may potentially threaten the indigenous Sámi culture and reindeer husbandry.

Ports

Thanks to its two sea ports, the Sea Lapland area serves as a gateway for marine traffic to the neighbouring countries. It also provides access to other parts of the world through the Gulf of Bothnia and to the northern Atlantic across Norway and Sweden.

In 2018, the largest liquefied natural gas (LNG) terminal in the Nordic countries was opened in Tornio. Hailed as a clean fuel for marine traffic, the consumption of LNG is increasing, and its distribution network is also suitable for distributing liquefied biogas (LBG), which is regarded as a solution that supports the circular economy.

Future projects that have a critical importance on logistics in Lapland include the bioproduct mill being planned by Metsä Group in Kemi. Estimated to be an investment exceeding one billion euros in value, the mill will require further investments on the local road network, railway traffic and the Ajos deepwater harbour in Kemi after completion.

The Port of Kemi plays an important role as the port of export for the entire Lapland and a transport route for raw materials. Deepening the harbour from the current 10 metres to 12 metres would enable the transport capacity to be doubled. According to the Finnish Transport Infrastructure Agency, the cost estimate is about €26.6 million. Ajos is included in the Government’s transport path projects, and the decision will be made once the plans have been completed. The planning efforts are under way, and the possible construction could be initiated in 2021.

One of the projects important to Lapland in terms of global accessibility is the north-east data communication cable. If constructed, the cable would provide opportunities for drawing new digital infrastructure investments into the area.

Road traffic and Arctic testing activities

A functional and well-maintained road network is important for economic growth, and currently the roads in Lapland are in fairly good condition. Some individual road improvement and bridge renovation projects are being conducted through regional investments, along with restructuring the traffic arrangements of border crossings. Large-scale development projects regarding the road network are determined separately in the state budget. Such projects are not currently underway in Lapland.

National roads 4, 21 and 5 are essential targets for future improvements, as the possible industrial investments being planned for Lapland would increase heavy traffic on these roads.

International traffic flows to and from Lapland by land through a total of 14 border crossings. A significant amount of heavy traffic runs through Norwegian border stations along national road 21 to all parts of Finland. Tornio-Haaparanta on the Swedish border is one of the busiest border crossings in the whole of Scandinavia.