Warehousing Location Decision in Northern Europe: Transportation Mode Perspective

Manufacturing employment has continuously declined in developed economies for more than decade time, but service sector in turn has significantly grown. Services also include warehousing, which connects customers and globally concentrated manufacturing units together. In this manuscript we examine location criteria for warehouses in Northern European companies (Finland and Sweden) as well as location of their warehouse network in larger Europe. Our research shows based on multiyear survey that primarily warehouses are established to have: (1) low distribution costs, (2) road transportation connection, and (3) assembly/manufacturing units are near-by. Currently in different contexts is being emphasized intermodal transports, railway connectivity, future potential of location as well as low labour cost are considered to have secondary up to quinary importance. In country level differences we show based on completed surveys that Finnish companies are more active in Central and Eastern European Countries (CEEC), while Swedish companies have been extremely cautious with this regard

Warehousing in Europe – Northern actor perspective

Importance of warehousing has increased during the recent decade and among cost issues, these outlets have become value adding centers; responding to market changes with maximized corporate profitability. Our research concerns Finnish and Swedish companies, and their warehousing decisions in larger Europe. According to our longitudinal survey results, warehousing location in Finnish companies is more weighted towards East, while Swedish companies focus on West. Warehousing size itself will continue to increase, but smaller units have future too. However, most significant changes appear in the location criteria; most of the new establishments will consider road transportation connection, low distribution costs, infrastructure enabling intermodal transportation and availability of third party solutions. Among these assembly and manufacturing plant location plays important role. Overall from survey results it is seen that emerging economies of Europe are explaining quite many development paths, especially among Finnish respondents

Chinese High-speed Railway: Efficiency Comparison and the Future

High-speed railway (HSR) network building was initiated in China in the early 2000s, and full-scale construction began several years later as a larger use phase started in 2008. Thereafter, the expansion speed has been impressive. Network investment could be considered as a success, if evaluating the amount of high-speed railway usage already during the expansion phase. The diffusion models built in this research show that expansion in the network and growth of the passengers will continue at least until the following decade. The performance is evaluated in terms of DEA efficiency model. It is shown that efficiency started from very low levels, but it has been increasing together with the expansion of HSR network. Currently, the efficiency is near the level of the leading European High-speed (HS) countries (Germany and France). However, it is projected with linear model and by Bass diffusion models that the efficiency will reach Japanese and South Korean standards in the next decade. A somewhat larger network length with smaller relative growth of passengers, but with a higher growth of passenger-km seems to be able to reach even the frontier efficiency.</p

Sulphur Directive – A New Long-Term Cost Driver for Nordic Export Industry

EU Directive of MARPOL Annex VI and its economic impact on the Nordic paper industry is theme of this research work. Empirical data for analysis purposes was gained from a large Nordic paper mill that exports bulk products mainly to Europe (70 % of its volume). The study shows that in the end the industry&rsquo;s location still has an economical effect, and that the location has a distinct impact on competition through rising transportation costs. Environmental regulation continues and fosters long-term upwards trajectory of transportation cost, which has been experienced by the paper mill earlier during years 2001-2009.&nbsp;</p

New Environmental Demands and the Future of the Helsinki−Tallinn Freight Route

The environmental friendliness of short sea shipping has been justified in Europe by the ensuing lower congestion at hinterlands and unneeded large-scale infrastructure investments on roads and railways. However, the attractiveness of short sea shipping is about to change. This is because of increasing environmental regulations (International Maritime Organization (IMO) sulfur regulation in the Baltic Sea and planned CO2 emissions trading) and increased world market oil prices. In this research, we analyze this potential change using data envelopment analysis on the existing transportation chain alternatives in the Helsinki (Finland)−Tallinn (Estonia) short sea route (chains using either roro, ropax or container ships). The analysis also includes the planned railway tunnel between the two cities. On the basis of our findings, the current truck and semi-trailer-based transportation is challenged by containers, irrespective of how they are carried (ship type). In the long term, for reasons of emissions and oil independency, the possibility of tunnel construction would make it vital to have container ship operations available along this route. The forthcoming change is not radical, but rather evolutionary and long term oriented

A comparative study of market potential for logistics outsourcing in Estonia and Finland

Purpose This research analyzes the development of logistics outsourcing market in two countries, Estonia and Finland, with different paths as members of the single European market. The purpose of this paper is to examine whether the two markets have become more similar or whether their logistics costs and logistics markets have developed differently over time. Design/methodology/approach The development of the logistics market is addressed through two survey-based variables. Logistics costs are used to measure the size of the logistics market, whereas logistics outsourcing is analyzed to measure the development phase as well as the market potential for logistics service provision. Findings Estonian logistics outsourcing market was found to be underdeveloped and small compared to the Finnish market. At the same time, the logistics costs of Finnish companies are high and rising, whereas the costs of Estonian firms are declining. Research limitations/implications The results imply that the level of outsourcing might explain the visibility of logistics costs, which should be taken into account when making estimates on logistics costs both at the firm as well as on country level. Social implications Logistics sector is an important source of national competitiveness and employment. This research identifies subareas for the two countries on how to develop competitiveness through the logistics market. Originality/value This research provides a unique method to estimate the size of logistics outsourcing market in these two countries. It also represents as one of the rare works to provide multiyear comparison between countries in logistics costs.</p

North European Export Industry and the Shadows of Sulphur Directive

"jats:p"EU Directive of MARPOL Annex VI and its economic impact on the Nordic paper industry is theme of this research work. Empirical data for analysis purposes was gained from a large Nordic paper mill that exports bulk products mainly to Europe (70 % of its volume). The study shows that in the end the industry’s location still has an economical effect, and that the location has a distinct impact on competition through rising transportation costs. Environmental regulation continues and fosters long-term upwards trajectory of transportation cost, which has been experienced by the paper mill earlier during years 2001-2009. Sulphur regulation change to cleaner grades of maritime diesel did not turn as heavy cost increase in the 2015, however, possibility to gain cost benefits in rapidly deteriorating oil markets were not reached either. Therefore, in depressed industrial product markets, like paper industry, implications were such that margins of export industry remained low. Document type: Articl

ESTONIAN LOGISTICS MARKET 2018 SURVEY: ANALYSIS AND FINDINGS

Background: Estonian logistics market survey has been completed three times (during years 2007, 2012 and 2018), and this research reports development from the most recent survey concerning operating conditions and logistics costs as well as performance. Survey concerns manufacturing, trading and logistics service companies.Methods: Research data was gathered through an online survey executed during summer and early autumn of 2018. The survey received a total of 122 responses from manufacturing, trade and logistics service provision. Results of the study are compared to earlier years, and with the same approach completed Finnish logistics market survey.Results: Survey responses showed that Estonian logistics market has been experiencing overheating and the costs of logistics activities are clearly increasing. Logistics service providers have experienced negative effects resulting thereof more than manufacturers or trading companies. Inventories and delivery times have increased, which has resulted in longer cash conversion cycles. Other than inventory and lead time related supply chain metrics have developed positively, indicating that the overall performance in Estonian logistics has remained high.Conclusions: Increase of logistics costs and inventories remain as main future challenge for Estonian logistics. In other regards, development has been good, and quality of e.g. logistics services and customs have increased and is at high level.</div