To boost competitiveness, the port and Estonian Railways will need to operate as a cluster or holding corporation says Valdo Kalm yesterday elected as Port of Tallinn CEO.
A key link in Estonia’s logistics, the port is losing competitiveness amid others on Baltic sea – a trend that can be reversed thanks to the generations change in Russian transit business helping again emphasise the advantages of the Port of Tallinn. Also, the port will be successful at taking over the ferryboat connection between mainland and islands, assured Mr Kalm who takes office on March 1st.
- What are your thoughts stepping into management of Port of Tallinn as last year transit volumes sank over 40 percent and assuming ferryboat traffic to islands brings heightened public scrutiny?
Naturally I have no overly detailed information right now regarding the port and my sources lie in the Internet. However, I will point out what needs to be a focus near-term and first in line.
Indeed, carriage of goods was in decline last year and we will now have to find ways to improve the situation. Definitely, we should think about improved cooperation in Estonian transport and logistics. Especially regarding cooperation between the port and the railway. Makes no difference whether the cooperation will be as a cluster or via a holding corporation, but the values chain with other enterprise sin the same domain needs to create our competitive edge.
What we must focus on is the values chain with clients and operators. We need to provide more options for added value to production here in Estonia. We will review the processes at the port, how much bureaucracy is present. We will create conditions for operators to want to come here and do business. The key words would be modernising the port and digitalising the logistics, to create new technological options.
- How do you think to alter the situation where trains travel towards Latvia and Lithuania, but not toward Estonia?
We will need to show that the Port of Tallinn is the best in technology and services. Part of the problem lies in the Ust-Luga port in Russia where political priorities come into play. If Russia has decided to invest in that port and to support the investment, such stuff is hard to alter.
- How deeply has the corruption scandal of former port management weakened the port? What is the inner condition of the enterprise?
I do not see the reputation of Port of Tallinn too critical – it can be repaired. In that issue, my overview is partial; I will have more clarity after having met with the people. I will begin meeting key people rather soon, though I only enter into office on March 1st. Surely, the meetings will provide quite a good picture of the motivation in the people.
By the picture seen from the outside I want to praise the port, and this is also among the reasons I wanted to come work here. It is a developing, dynamic enterprise in good condition. I think an excellent base has been created from which to advance and on which to build the future potential. An enterprise’s reputation will rise with the daily business involvement. In the Estonian society, what will be decisive will be the organisation of the ferryboat traffic, and the functioning as a tourism gate, a logistics engine.
For reputation, these issues play a larger role than the daily business activity. With small right steps in these fields the reputation of the port will be restored.
- Did the corruption problem that surfaced with the former management went with the men, or has it seeped into the corporate culture?
I have yet to meet the key figures and staff, but I’m meeting (some) on Thursday. Therefore, it is hard for me to answer the question. Surely, the special report underway will provide complete answers. Though the report is not here yet, I feel the problem is not that deep. I need a little time to get a handle on this.
- How well do you feel with relations to Russia? To whom and how do you intend to go in order to improve the situation with transit which make for nearly 70 percent of the carriage of goods at the port?
The transit topic isn’t about the East only. As a positive for 2015, the share of solid bulk goods and ro-ro went up. Meaning that we have interesting options regarding goods groups.
Regarding business in the Eastern direction, I have interesting experiences already from working at Eesti Telekom. A few years ago, we were visited by a very high level governmental delegation from Russia. They got acquainted with our e-environment, and were hosted by us for several days. These were very wise, very intelligent young people. I have heard that in their transit business also there is a generation change happening. One needs to be sensitive to the feelings of the other party, but I think that Russia also is being modernised.
- Which niche in the Eastern trade might prove more successful than now?
Muuga Harbour is very modern already. We need to offer that and get the price/quality ratio in place. A better price may outweigh both close relations in politics and the political argument.
- How do you assess the ability of Port of Tallinn to take over ferryboat traffic with Hiiumaa and Saaremaa?
I believe capability has been created with the subsidiary of the port. The company is already being manned. At the moment, we need to keep a careful eye on the completing of the ships. By themselves, new ships create a better quality service. Of we offer that at reasonable price, all conditions are in place to meet the expectations of the passengers.
- Up to now, the yearly flow of passengers through the port has increased, nearing the ten million level. How can such development continue to the current backdrop of economic anxiety?
This is first and foremost a question to the operators, but on the other and a lot depends on what we build the port area to be like. The work is already underway and I believe the environment will be somewhat more innovative. For the port, developing the nearby plots is quite a big business, but also important for the state and the city.
I heartily hope that there is room for growth regarding passengers thanks to the St Petersburg line and cruise vessels. While difficulties currently loom from St Petersburg, we need to look further ahead, two-three years from now.
We need to sit down with the operators and think about the smart-port way to make entering the ships and exiting them even more effective. We need to cut operator costs and for the end client the chek-in could be done with a single electronic beep.
- At Estonian Telephone board since 1997.
- From 2000, CEO of Elion.
- From 2003, CEO of EMT.
- 2007–2015, CEO of Eesti Telekom.