Transport integration in the EU

Transportation and Logistics Networks in the Baltic States: Keys for Successful Economic Development and Integration into the E.U. On May 1st, 2004, the Baltic States of Estonia, Latvia and Lithuania become official members of the European Union. This will greatly expand the opportunities for these countries to increase the volumes of trade with other EU countries as the physical, technical and fiscal barriers to free trade are eliminated or greatly reduced. Some estimates predict very high growth rates for volumes of goods that will be transported in the Baltic States. It is also well established that high quality transportation systems are critical for successful economic development. A critical question arises – are the transportation and logistics networks and infrastructure of the Baltic States ready for this challenge? The purpose of this paper, therefore, is to analyze the state of transportation and logistics networks and infrastructure in Estonia, Latvia and Lithuania. The analysis will begin by looking at the major traffic flows. More specifically, it will identify the major trading partners of the Baltic States. In addition, it will describe the primary types of commodities or goods that are carried. Efforts will be made to see if there are any significant changes in these markets and in types of goods traded due to becoming EU members. A very closely related issue is the amount of transit traffic that will cross the Baltic States and the opportunities for transport carriers from Estonia, Latvia and Lithuania to participate in this transit traffic. The next section of the paper evaluates the providers of transportation services within these countries y mode, i.e. what are the capabilities of the rail, motor, water, pipeline and air carriers? Are there viable multimodal services? What is the financial status of the transport companies and what is the balance between private and public ownership? Will these transportation companies be able to compete with established international carriers and forwarders from Western Europe? Finally, do these carriers meet the environmental and safety standards of the EU? Closely related to the prior section is the current and proposed status of the road, rail, water, pipeline and airport infrastructures. How will these systems be upgraded and modified in order to mesh with the Trans-European Network (TEN) and Pan-European Network (PAN) of the EU? In particular, the paper will look at TEN Corridor I – the Baltic Highway from Helsinki to Warsaw via Tallinn, Riga and Kaunas. Most importantly, the sources and possibilities for funding these massive infrastructure improvements are discussed. Finally, the paper will look at the logistics and distribution services that exist in the Baltic States. Questions related to the extent and competitiveness of these services will be discussed as well as the types of changes that will be required in order to operate in the new EU environment.