We See an Opportunity to Attract Cargoes through Ukraine – an Interview with the General Director of the Klaipeda Seaport

The general director of the Klaipeda State Seaport Authority, Arvydas Vaitkus, discusses the recipe for successfully attracting transit cargoes and development of cooperation with Ukraine.
Mykola Zasiadko 24 December 2015 16:18

Ukraine is only now moving toward privatization of stevedoring companies. In Lithuania, this issue was resolved in the early 2000s, when the state privatized stevedoring companies but retained control of the infrastructure of the Klaipeda seaport, the only port in the country. The Klaipeda State Seaport Authority is responsible for development and management of the port. The other companies operating in the port are privately owned. "We are partners of port operators, which perform cargo operations, while we – the Klaipeda State Seaport Authority – prepare the infrastructure timely and qualitatively," the Klaipeda State Seaport Authority’s General Director Arvydas Vaitkus said.

Rapid growth began after the privatization of the stevedoring companies in Klaipeda. The Lithuanian port has managed to overtake competitors such as Riga and Tallinn. By 2008, the port had reached a record cargo turnover of 30 million tons. For comparison, this figure was 15 million tons in 1999. The port plans to set a new record this year by handling 38 million tons of cargo. Arvydas Vaitkus is confident that the port will succeed in reaching this target because it already exceeded 35 million tons of cargo in the first 11 months of the year.

Arvydas Vaitkus was born and raised in a sailor’s family in Klaipeda. Therefore, the port has never been alien to him. He first began working in the port during his summer holidays when he was 15 years old. He encountered port issues that are more serious while working in the private sector. The next stage of his career was in a ministry and later in the position of director of logistics at the largest private enterprise in Lithuania, the Achemos Grupė. He has worked at the Klaipeda State Seaport Authority since 2013.

In recent years, Kazakhstan has been actively promoting the Trans-Caspian corridor (China-Kazakhstan-Azerbaijan-Georgia). Turkey has become part of it. Ukraine has also declared its intention to participate. Are you interested in this project?

Yes, we believe that this project is very interesting. We are working closely with our partners from Kazakhstan. I think that we will be able to prove the potential of the project jointly with the management of Kazakh transport companies.

Do you plan to step up cooperation with Ukraine?

All countries that desire high-quality, safe, and inexpensive transportation of cargo through the Baltic Sea and through the port of Klaipeda are important to us. Without a doubt, cooperation with Ukraine is also very important to us. Furthermore, we see an opportunity to attract cargo to the Klaipeda port through Ukraine. We already have a perfectly working link – the Viking train – that operates from Klaipeda via Minsk to Odesa and Illichivsk. Lietuvos geležinkeliai (Lithuanian Railways) has prepared a project for expanding the geography of this project to countries neighboring Ukraine, thus facilitating transportation of cargoes not only through Lithuania, but also through Ukraine. I hope that Ukraine will also play a very important role in this area.

Belarus is one of the main providers of cargoes to the port. What is its share of the port’s total cargo turnover? How are you attracting Belarusian cargo owners despite the fact that Riga and Kaliningrad are located near them?

There were very few Belarusian cargoes in the port of Klaipeda 12 years ago, but the Lithuanian-Belarusian working group that has been created since then with the participation of representatives of the government and business circles has done its job properly. The Republic of Belarus is a key strategic partner in the transportation of transit cargoes.

We have no particular secrets because it is logical that logistics at the shortest distance is the most attractive. The Klaipeda port has invested large sums in infrastructure and superstructure to ensure that the movement of Belarusian cargoes through our port is unobstructed. Transportation by land is the most expensive mode of transportation in supply chains. Therefore, the port of Klaipeda, which is located at the shortest distance compared with other ports, benefits thanks to lower transport costs.

In 2013, the Belaruskali company bought 30% of the shares in the dry bulk cargo terminal. Do you plan to privatize other terminals in the coming years?

The Klaipeda State Seaport Authority does not possess such information, and it is a matter of agreements between private business entities. Privatization could have been a topic of discussion 10 years ago because all the businesses operating in the Klaipeda port are private. Today, transactions are concluded between private enterprises.

How do you interact with operators?

Our country, which gained independence 25 years ago, chose a port management model that has fully justified itself today. The best proof of this is the increase of cargo turnover in the past 12 years, which is the largest margin of increase among the ports in the Baltic Sea. Fourteen years ago, we approved strategic investment plans, having discussed them with enterprises operating in ports and port operators, and we are consistently implementing these plans. We are partners of port operators, which are the ones that perform cargo operations while we – the Klaipeda State Seaport Authority – prepare infrastructure timely and accurately.

In October, the port of Klaipeda signed an agreement on development of cooperation with the China Merchants Group corporation, which is a Chinese port operator. What outcome do you expect from the cooperation with your Chinese partners?

Speaking about the prospects of the port, the China Merchants Group corporation is our strategic partner. We have no doubt that we can offer the best conditions for cargo traffic through the port of Klaipeda – cargoes from Belarus, Russia, and Kazakhstan – while also attracting cargoes from the northern part of Ukraine.

You pay much attention to transit of cargoes from Belarus, Kazakhstan, and China. What is the current ratio of Lithuanian cargo to transit cargo?

Klaipeda has long been a transit port and one of the most attractive ports for cargo flows between the East and the West on the Baltic Sea. We have been the fastest growing port for the past 12 years. Undoubtedly, we will try to remain so in the future. Given the fact that transit cargoes currently account for about 40 percent of the port’s total cargo turnover, we have naturally set ourselves the goal of increasing this percentage.

What results do you expect to achieve this year? What do you plan for 2016?

We have no doubt that we will set a record for cargo handling at the Klaipeda port – 38 million tons – this year. In 2016, we will definitely strive to achieve better results. It will be possible to talk about our endeavors later. Right now, our plans have been presented to the Republic of Lithuania’s Ministry of Transport and Communications.

You participated in the Viking train project while working at the Lithuanian Ministry of Transport and Communications. Has this train justified itself? How do you see its future?

I am very pleased that I had the occasion to be at the origins of the Viking project and represent Lithuania. I am pleased that this project – with the participation of Lithuania, Belarus, and Ukraine – is known not only in Europe but also throughout the world. Possibly, this project has largely justified itself in the area of container transportation, and the initial work on container transportation was not so successful.

Speaking of the future of this project, it is important to expand its geography by including countries located in the southern part of Europe and cargoes from the Baltic Sea region, particularly from Scandinavian countries. Since the port of Klaipeda has well-established lines for ro-ro transportation, there is an opportunity to use them. It is also necessary to wish Ukraine accumulation of cargoes not only from inside the country, but also from neighboring countries.

You have two degrees – engineering and law. How do they fit into your work?

Both my engineering and law degrees are a big plus in my work at the port. That kind of knowledge saves me when I am making engineering decisions or applying legal principles, signing agreements, international agreements, or participating in creation of a legal framework.

Tags: seaport, cargo