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cargo connection To Russia in an hour Last April, Finnair Cargo opened a regular cargo link between Helsinki and St Petersburg. This economic region with more than seven million people offers international companies extensive ­ and growing ­ markets. BY OUTI AIRAKSINEN PHOTO BY DIMA LOVETSKY THE AUTO INDUSTRY, home appliances, foodstuffs, the pharmaceutical and forest products industries, subcontracting... St Petersburg, with its population of five million people, has developed within a short period of time into a significant market area for many international firms. An increasingly affluent population and a growing middle class mean increasing buying power and a sharp rise in demand for quality western goods. Finland's popularity as a transit country for merchandise flowing into eastern markets can be explained by its location and its highly developed logistical systems. "Finland's advantage is that we can offer a comprehensive package of reliable, secure western logistics services for deliveries to Russia, a package that is a seamless part of the international information network," says logistics expert Erkki Hämäläinen, research director at the Helsinki School of Economics. At the beginning of this year, Finnair Cargo was still offering its customers a lorry connection to St Petersburg. When delays at the border began to create queues of trucks, some 30 to 40 kilometres long waiting to cross into Russia, it was decided that an air connection to St Petersburg was essential. Now Finnair Cargo offers air cargo capacity four times a week to Russia's western metropolis. In addition to the major forwarding companies, the connection is being used by companies sending goods to Russia ranging from hi-tech to pharmaceuticals and spare parts. "Along with our Finnish customers, we have plenty of transit traffic as we deliver goods from East Asia, the US and the EU to Russia. Unfortunately the demand for air cargo westbound from St Petersburg remains negligible," says Finnair Cargo sales director Ilpo Kuisma. However the has been solid demand for the new route from Finnish companies. RUSSIA DEVELOPING ITS LOGISTICS » Cargo traffic to Russia is growing. neck for trading in goods in Russia, but that may be changing. Many private Russian and international bodies, as well as the Russian state, are investing considerable sums in improving logistics in the St Petersburg region. In addition to cargo connections, large modern logistics centres are also being built in the area. In future, these will form interface points for air, rail, road and shipping traffic. "The western countries will notice that the bottlenecks in Russian logistics will start to ease," Hämäläinen predicts. Meanwhile it is likely that other competitive transport routes from the EU into Russia will open up alongside the Finnish routes. However it is also probable that the flow of goods will continue to grow, too. Because, despite the risks, the Russian markets offer international companies such promising outlooks that no-one wants to be left out. "There are really a lot of international corporations moving into St Petersburg, and they need rapid air transport. If Finnair Cargo didn't offer this connection, someone else certainly would," says Hämäläinen. Although so far the share of air cargo going to Russia remains relatively small, there are signs that its popularity will grow in the near future. "Even though it costs a bit more than road transport, this is a faster, more flexible mode of transport. Sometimes it takes days for trucks to cross the border," Kuisma points out. The air link is part of a comprehensive package from which forwarding and other firms can choose the transportation solution that suits them best. Until now, logistics has formed a bottleTo St Petersburg four times a week hFinnair Cargo offers air cargo capacity between Helsinki and St Petersburg on Mondays, Tuesdays and Fridays. hDepartures from St Petersburg are 7 p.m. and from Helsinki at 10 p.m. hTravel time is one hour. hThe aircraft's capacity on about 15,000 kilos. 3 | 2007 CARGO NEWS 3

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