Industry brief: Logistics in Lapland

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 €557 million (2019)
  • Turnover in the sector has increased for several years
  • Five airports (Rovaniemi, Kittilä, Ivalo, Kemi-Tornio, Enontekiö)
  • 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
  • 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 2019, exports in the region of Lapland stood at a value of about €3,8 billion, which is 6% of the goods exports of the entire country. 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. Import into Lapland was valued at almost two billion euros in 2019. Roughly one-third of Lapland’s SMEs engage in export or import activities.

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 €557 million in 2019, and the sector provided about 3,600 person years of employment in some 920 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 2019, a record number of 1.4 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.

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).  The planned electrification of the rail line from Laurila to Tornio and further to Haparanda will enable the development of passenger traffic between Finland and Sweden by rail.

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 built by Metsä Group in Kemi. The project requires investments in road network, railway traffic and the Ajos deepwater harbour in Kemi. 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 will enable the transport capacity to be doubled.

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

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.

Different operators in Lapland also conducts world-class research and testing activities for the development of road transport, vehicles and transport infrastructure.