Railgate Finland: Gaining Momentum

Located between two metropolises – Helsinki and St. Petersburg – Kouvola has a strong tradition of utilizing its great rail and road connections to all directions. Ranked the best Logistics Centre in the Nordics by German DGG, Kouvola features excellent multimodal capabilities – and is now busy building extraordinary rail connections to the East.

Case in point: The direct container train connection to Asia – running from Kouvola to Chinese city of Xi’an – has now been running cargo to China (and back) for a year. With the rise of e-logistics, driven by IoT and cutting-edge blockchain solutions, only sky is the limit for the enterprise known as Railgate Finland.

The modern-day Silk Road has brought much-needed cost efficiency to rail transport between Europe and China, as the Northern route – running from Finland to Russia to Kazakhstan to China – is less congested than the Central European rail corridors.

The Northern route is also 2,000 kilometres shorter than its southern counterparts. As the gauge width is the same in Finland and in Russia, there is only one reloading session needed along the way (on the Kazakhstan-China border).   

Push for the Big Time

Kouvola Cargo Handling Oy is one of the companies that have had a hand in the making of this success story. The loading crew assembles the container train at the same time as the freight officers make sure that the documentation is in order, explains Marketing Director Anu Kujansuu from Kouvola Cargo Handling.

“Thanks to the China connection, there is a very positive sentiment in the local logistics scene,” she says, adding that the new logistics area of Kujala-Kullasvaara is a real “homerun” for the industry.

“The City of Kouvola has a long-term plan to develop the area and it has done a great job building rail infrastructure. In addition, it’s easy enough to acquire plots.” 

Keep Growing

In fact, Kouvola Cargo Handling is presently ramping up its own operations: by Christmas 2018, there will be an expansion of 6,000 square metres in the warehousing capacity.

 “After that, we will have 21,000 square metres of storing space,” Kujansuu says. The company is also looking to recruit around ten new employees and credits the local labour pool for its depth.

“We’ve been able to get good employees for both the warehouse and the office,” says Kujansuu. 

Going Intermodal

Simply key in the local plans is the Kouvola RRT (Rail Road Terminal) project which is aiming to realise Finland’s first large-scale intermodal terminal in the Tehola-Kullasvaara area. Having been designated by the EU Commission as the only TEN-T core network terminal in Finland, Kouvola launched the Rail Road Terminal Project in 2015. 

For the planning phase (2016-2018), the project received EU funding and is now applying for funding for the actual implementation of the terminal. The implementation cost of the terminal is around 40 million euros, says Petteri Portaankorva, Development Director for the City of Kouvola. 

“The technical planning of the area will be concluded by the end of 2018,” he says.

Smooth Operator

Under the RRT concept, container trains (with a length of 1,100 metres) ride straight up to the terminal area without any extra maneuvers conducted in the railyard. “The old cargo is loaded off, new cargo is loaded on and the train is good to go,” Portaankorva sums up.

According to Portaankorva, the new rail corridor provides new opportunities for business players who view air cargo as too expensive and sea transport as too slow. Also, the conditions of the transport do weigh in: in the train, humidity is not such an issue as it is with seaborne cargo.     

“Furthermore, it takes two weeks for the train to travel the same distance it takes two months for a ship,” he says, pointing out the obvious competitive advantage. Today’s trend is, after all, that products must hit the market ASAP.

Mustering the North 

For a number of years now, Kouvola Innovation has been working on numerous fronts to advance the cause of the new China connection. Recently, Kinno has established partnership agreements in e.g. Sweden and Norway, as the entire North stands to benefit from the Eastern connection.

Simo Päivinen, Logistics Development Director for Kinno, comments that, thanks to the Kouvola-Xi’an link-up, there is now “a real competitive edge” to logistics in Scandinavia. For example, distribution centres, production plants and various businesses are expected to reap the benefits of the new route.       

“The role for Kinno is clear: we want to help companies establish a presence in the Kouvola Region and help open up an excellent connection between North Europe and Asia,” Päivinen says.

 

Text by Sami Anteroinen

Photo of Jari Heikkilä: Almat Karimov, Director of KTZ Express,  and Jussi Toikka, CEO of Kouvola Cargo Handling Oy watching the first joint train of several sawn timber operators leaving foggy Kouvola on 17th of October, 2018.