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leafhill.fi Cold climate but a hotbed of innovation Some of the most-forward-thinking companies in freight and logistics can be found in Scandinavia and Finland


Knowledge transfer for Finnish logistics expert


Finland-based fourth party logistics company, Leafill Solutions, is using its supply chain knowledge to help China improve the efficiency of its businesses, explains chief executive Janne Lehtimäki. The company has been approached by the country’s government, which is conscious of the fact that it is no longer the low-wage country of Asia and that it needs to make its supply chain more efficient if it is to compete with the likes of India or even Taiwan. The logistics market in Finland


itself remains stable, although it is not growing much, if at all, at the moment, says Lehtimäki. A few of the major global players have entered the market, although oſten with small operations. Some of the established players have also increased their footprint, for example DHL with its new terminal close to Tampere, a sign that the major


players are now beginning to consider markets outside the two largest cities of Helsinki and Turku, Lehtimäki suggests. As in other parts of the world,


the FedEx-TNT merger continues, although the process is perhaps a little less advanced in Finland than some other countries, Lehtimäki suggests. UPS has also increased its presence in Finland and has boosted its cooperation with a number of local players. Finland Post meanwhile


remains a rather troubled organisation with industrial action by postmen and women, unhappy with new contracts that could reduce their already very low wages – by Finnish standards – still further. Over the years, the Finnish post office has bought up private companies and attempted to turn them into logistics operations, including the Itella concept established about a decade ago, but which


Economy: Unexciting growth prospects – but stable too


The Nordic region’s economies have a certain amount in common. All are stable countries with high standards of living. As such, they are unlikely to experience runaway economic growth – but nor are they likely to plumb the depths of recession either.


Sweden – slow, green growth


Sweden is the epitome of the stable, slow-growing western economy. Greenhouse gas emissions are probably of more concern to many Swedes than economic growth, and the rise in GDP has been muted over the


past few years. The country is well known for


its even distribution of income; the country has over the past few years attempted to make up the shortage of skilled labour through increased immigration. Is Sweden, and the Nordic


region generally, a foretaste of the future in other countries, including the UK, in years to come? Certainly, Sweden’s preoccupation with green matters could be a sign of where things will go elsewhere. Lately, points out analyst


Focus Economics, Sweden’s economy did grow at a slightly faster pace in the third quarter of


now only exists overseas in the Baltics and Russia. More recently, the Finnish post


office also


bought out Finnish Railways’ groupage and less-than- wagonload arm, and has also attempted to get into the cool chain business, again by buying out a number of private firms. None of these ventures have been particularly successful, says Lehtimäki, leading to the recent resignation of the Post’s chief executive. Another major purchase was contract logistics operator Transval Group in late 2018 which it has merged with its existing Flexo service, which has “turned the market upside down”.


Finnish Post does though have


one interesting concept, a public ‘dressing room’ where online buyers can try out garments and return the ones that they don’t wish to keep – potentially a more streamlined operation than


2019, following on from steady growth in the second quarter. Industrial production has been increasing recently although unemployment has picked up and business and consumer confidence is also low by recent standards. It’s a case of two steps forward,


one step back. Focus Economics expects Sweden’s economic growth to cool next year as fragile business confidence continues to weigh down on investment and, moreover, export growth is expected to slow. Sweden, like everywhere else, will be affected by rising international trade tensions. News site Thelocal. se says that the Swedish krona has lately touched record lows against both the US dollar and Euro and, while it has caused pain


consumers returning packages individually. The Finnish Railways are a


major exponent of rail services to and from China though here again there have been issues, Lehtimäki continues. Two years ago, Finnish


operator


Kouvola Cargo Handling launched a concept for direct trains between Kouvola and Vainikkala in Finland via Kaluga to-Xi’an in China operating every two weeks and a transit time of about 14 days. However, aſter an attempt to step up the service to weekly, the service became increasingly unreliable, according to


Lehtimäki and


eventually led to the trains being switched to a routing via Poland. Since then, established Helsinki forwarder Nurminen Logistics has created its own service between the Finnish capital and Hefei in China and this does appear to have settled down to a stable fortnightly pattern, offering a transit time of 18 days, he says. The service has been boosted


since Russia started to allow transit of agricultural products, food and raw materials by rail


to consumers, it has shored up the country’s exports, or at least those that are price-sensitive. As the report points out, Sweden is an export-orientated economy, and the low krona can make Swedish companies more competitive, but it also drives up costs for those firms that rely on imports. It cites a survey by Swedbank,


which found that around half of purchasing managers for Sweden’s 400 biggest companies said a fall in the krona had a negative impact on profits, with only a fiſth saying it was positive. Small and medium sized businesses were generally the most seriously affected. A weak currency also affects imports, including


consumer


online purchases and food prices; with its northern climate, Sweden


in July but it’s very questionable whether the Finnish market is big enough for two regular competing services, he suggests. But while the logistics


industry faces challenges, long- term prospects for the Finnish economy as a whole look quite encouraging, says Lehtimäki. Google is investing in a €600 million data centre in Hamina, taking advantage of


Finland’s


climate – which reduces the need for cooling – and relatively low construction and land prices. According to Reuters, Google


already has a data centre in Hamina, an €800 million conversion of an old paper mill sold by paper firm Stora Enso to the tech giant in 2009 – neat symbolism of how the country’s economy is changing from low- to high-tech. The Finnish logistics


industry has also developed some interesting innovations. Conexbird has produced a container condition monitoring system that uses vibrations from a spread-mounted device to check the integrity of seafreight boxes. It is already in use in Finland, Sweden and Turkey and


is heavily dependent on imports. Denmark – outlook soſtens


Denmark bears many similarities to Sweden, the OECD points out. It has traditionally delivered high living standards to its citizens and leſt few behind with high and equally-distributed incomes translating into strong feelings of wellbeing according to a range of measures. Commitment to addressing environmental challenges has made Denmark a frontrunner in green growth, it adds. Economic growth has however


been soſtening in Denmark too, says analyst Bloomberg. Again, the global slowdown and trading environment is to blame for the comparative weakness in


the INTTRA shipping portal has also expressed an interest. Lehtimäki also points out that


The International Federation of Purchasing


and Supply


Management has recently moved its headquarters from the UK to Finland, in anticipation of Brexit. Brexit is naturally a concern


for many Finnish companies for whom the UK is an important market, although the country’s firms are well used to dealing with third countries and any problems in the UK will probably pale into significance compared with those thrown up by the Russian customs service. A few Finnish


politicians


have themselves expressed frustration with the European Union, and there is a certain amount of anti-EU feeling in the country, but there is nothing on the scale or as organised as the UK’s ‘Leave’ campaign. Some businesses hanker for the flexibility of the days when the country had its own currency before joining the Euro, but again there does not seem to be any real appetite for wholesale change.


this export-orientated country. Growth in 2020 is put at around 1.7% compared with 2% in 2019. The culprit is weaker growth in


main export markets, particularly Germany. Focus Economics agrees that


the Danish economy probably lost some momentum in the third quarter of the year, following a solid second quarter. Sentiment by business and consumers was notably lower than in the previous quarter. However, annual growth in business lending and industrial production was strong while merchandise exports continued to expand robustly year-on-year. Nevertheless, momentum is


expected to weaken next year, as the uncertain global environment weighs


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