Ports of Eastern Baltic and Russian transit policy: competition and cooperation

Abstract

The ports of the Baltic states have been handling Russian cargoes for many years. Thus, there is no apparent need for Russia to reroute all freight flows to domestic ports. It was not long ago that Eastern Baltic ports were regarded as ordinary competitors, however, the current geopolitical situation has drastically reshaped the framework for transport cooperation in the region. Competition and cooperation strategies are often equally viable for the ports in the Eastern Baltic Sea. Yet volatility in global markets, the unstable positions of leading exporters and importers, and changes in the economic and political environment call for new strategies and forms of interaction. This study aims to understand to what extent port authorities in the Eastern Baltic can combine competition and cooperation policies when formulating their vision and handling transit cargoes. The article draws on official statistics and Russian and international publications on the theory and practice of transport routing and the functioning of hub infrastructure. The study applies the methods of case study and statistical and comparative analysis to outline the current situation in the Eastern Baltic ports and their potential to attract more freight flows from Russia. The article tests the hypothesis that Eastern Baltic port authorities should pursue a co-opetition strategy. The study concludes that, in the immediate future, this strategy can be employed only in cases of extraordinary circumstances, for example, at peak loads.