Latvian railways “Latvijas Dzelzceļš” (LDz) Board Member Andris Lubāns announced that last year’s cargo volumes, which were 41.5 million tonnes, were the lowest in 17 years, according to a Latvian Radio broadcast on January 21.
Lubāns describes the situation at the company as “negative uncertainty” concerning cargo volumes. This year they aren’t aiming for a specific amount, but are instead trying to adjust the business model for the increasingly lower volumes, including restructuring considerations.
In 2018 LDz public infrastructure transferred 49.26 million tonnes of cargo and 43.8 million tonnes in 2017, which was 8.4 percent less than the 47.8 million tonnes transferred in 2016. This clearly isn’t just a one or two-year trend, and has resulted in the company making plans to let go 1500 of the six thousand employees. Wages are 66% of the company’s expenses.
“Swedbank” Senior Latvian Economist Līva Zorgenfreija said that the cargo amount is impacted by Russia’s decision to divert cargo to its own ports. She said that this move was predictable, and that those who are shocked by the move had their heads buried in the sand.
As previously reported about the job losses, LDz Chair Māris Kleinbergs said it was a “painful” but necessary step to implement the layoffs and that they would be introduced gradually and in cooperation with the State Employment Agency in an effort to ensure the workers dispensed with can find alternative employment.
The measure would help “ensure a more modern and customer-friendly business model,” he said, as the company “is actively working on attracting new partners and diversifying its target markets.”
Also reported, last year 32.762 million tonnes of cargo were transferred at the Freeport of Riga, which is 10.1% less than in 2018, according to information from the port on January 9.
Bulk cargo made up the majority of the cargo at 20.84 million tonnes, which is a 12% decrease from the previous year. 8.093 tons of general cargo was transferred in 2019, as well as 3.83 million tonnes of liquid bulk cargo. Coal made up 31.6% of the transferred cargo, followed by container cargo, timber products, petroleum products and chemical products.
Although cargo transfer has been steadily decreasing, passenger transfer has been on the rise. Rīga International Airport consolidated its position as by far the busiest airport in the Baltic states during 2019, with figures reported January 8 claiming another year of double-digit growth in passenger numbers.
Riga Airport closed 2019 with an increase of 10.5% in passenger numbers, handling more than 7.8 million passengers, an increase of 741,800 compared to last year 2018. The total is more than four times that of Latvia’s population of 1.9 million.
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