The Baltic area has been enormously important to Hamburg from an economic point of view for centuries. At the same time, Hamburg’s port makes the city hugely important to the dynamic Baltic region. Dynamism, growth and integration – even in the medieval Hanseatic period, the Baltic region was a lively centre of economic and cultural exchange.
Today, the Baltic region is home to between 50 and 150 million people (depending on the exact definition) in nine countries, eight of which are in the European Union. They are the Scandinavian and Nordic states of Denmark, Sweden and Finland, the north-east of Germany, Poland, Lithuania, Latvia, Estonia and the north-west Russian regions of Kaliningrad and St. Petersburg. The area surrounding the Baltic Sea has seen a great deal of economic development over the last 20 years, with further acceleration following the accession of Estonia, Latvia, Lithuania and Poland to the EU in 2004. The states on the west of the Baltic – Finland, Sweden and Denmark – are advanced industrial nations, which are hugely important economic partners for northern Germany. Their eastern neighbours – Estonia, Latvia, Lithuania and Poland – provide a liberal and low-cost environment for business activities. Estonia, Latvia, Lithuania and Poland are characterised by their well-educated labour forces, their attractive research and university environments and their great openness to IT applications. The European Innovation Scoreboard, which measures the innovative performance of individual states, puts four states in the Baltic region (Sweden, Denmark, Finland and Germany) among its top ten. Estonia has also improved its capacity for research and development significantly in recent years and is listed in 13th place. However, there are still huge differences between the economic performance per capita of the states in the Baltic region. Compared to the average for all 28 EU member states for 2015, the values range from 41 per cent of the average (Poland) to 170 per cent (Denmark and Sweden). This is despite the enormous progress Poland has made economically over the last ten years, more than doubling its gross domestic product (GDP), between 2004 and 2014, to 413 billion euros. Today, the eight EU states with direct access to the Baltic Sea, home to 29 per cent of the EU population, make up 30.4 per cent of the total GDP of all EU member states. Only the Russian region of Kaliningrad on the Baltic coast and the St. Petersburg area are not part of the EU, although they do offer a useful gateway to the large, albeit currently difficult, Russian market.
Hamburg benefits from trade in the Baltic. Foreign trade with the Baltic region has become increasingly important for Hamburg. Around 1,420 companies in Hamburg currently (July 2016) maintain business relationships with the eight Baltic states of Denmark, Estonia, Finland, Latvia, Lithuania, Poland, Sweden and Russia, with many of them active in more than one country. The number of companies with a business link to Poland, for example, has more than doubled over the last 20 years, to 782 at the last count. Russia is the number one trading partner in the Baltic region for Hamburg, followed by Poland, Denmark and Sweden in that order.
Imports and exports by Hamburg-based companies with the Baltic region tripled between 1994 and 2010. In the six years between 2010 and 2015, the significance of this region for Hamburg’s foreign trade increased enormously once again. Hamburg’s foreign trade turnover with the eight Baltic states of Denmark, Estonia, Finland, Latvia, Lithuania, Poland, Sweden and Russia was 7.7 billion euros in 2010 – much higher than the corresponding combined foreign trade turnover with the USA and Japan. The figure grew to around 11.6 billion euros in 2015 – greater than Hamburg’s foreign trade turnover with China in the same year. From a high of 12.1 billion euros in 2014, however, foreign trade with the Baltic states fell by around four per cent last year, especially due to the weakening economic relations with Russia.
Hamburg traditionally imports more than it exports to the countries in the Baltic region, but the movement of goods in both directions has increased significantly in recent years. From 2.6 billion euros in 2010, Hamburg’s exports to these countries rose to 3.9 billion euros in 2015 – a jump of 50 per cent. Imports also rose in line with this, by 51 per cent, from 5.15 billion euros in 2010 to 7.8 billion euros in 2015. This makes the Baltic region even more important for Hamburg’s foreign trade, with around ten per cent of all foreign trade with Hamburg accounted for by the states bordering the Baltic in 2015.
Port of Hamburg as a hub for Baltic transport. Employing around 151,000 people and generating a gross value of 20 billion euros, the Port of Hamburg is by far Germany’s largest and most important seaport. It is often called the most westerly North-range Baltic port thanks to its position on the western end of the Kiel Canal. Around 120 scheduled services link the Port of Hamburg with the majority of the world’s more than 1,000 seaports. As an international port, Hamburg also plays a vital role as a hub for distributing feeder loads between the Baltic states and overseas, especially Asia. Hamburg is the most important transshipment hub for these transports in northern Europe, and its strong record of Baltic transports puts its proportion of transshipment loads around six percentage points higher than that of ports like Antwerp and Rotterdam. As well as distribution transports, many intra-European loads are loaded at the Port of Hamburg for the Baltic region (short sea shipping). There are numerous feeder and short sea connections from Hamburg to Scandinavia, Poland, Finland, Russia, Estonia, Latvia and Lithuania every week. Around 19 per cent of the container turnover at the Port of Hamburg goes to the Baltic region, making up more than 1.7 million TEU (the measurement unit for twenty-foot standard containers) in 2015. There are four Baltic states – Russia, Finland, Sweden and Poland – among the Port of Hamburg’s top ten partner countries for container turnover.
It could be said that the Port of Hamburg is also Poland’s largest international port, as around 30 per cent of Polish container transports are routed via Hamburg along feeder, rail and road connections. In 2014, the largest portion of the containers – around 395,000 TEU – was transported by feeder ship on regular scheduled services via Hamburg to or from the container terminals in Gdansk, Gdynia and Szczecin. When it comes to land transport, around 20 container train connections run between Hamburg and Poland every week, carrying some 90,000 TEU per year. On the roads, around 110,000 TEU are dispatched by truck.
The difficult economic situation in Russia in recent times has had a noticeable impact on Hamburg’s turnover. The Port of Hamburg’s container turnover with Russia fell by 35 per cent between 2014 and 2015, having already dropped by eight per cent the previous year. Container turnover with Poland also slumped by 37 per cent compared to 2014, despite having increased by a significant 23 per cent between 2013 and 2014. In total, container turnover between the Port of Hamburg and the Baltic region fell from just under 1.2 million TEU in the first half of 2014 to 0.94 million TEU in the first half of 2015.
Outlook. Expansion of cooperation and infrastructure. Close cooperation in the Baltic region is at the very top of Hamburg’s economic policy agenda. Our Chamber of Commerce promotes collaboration between Hamburg-based companies and partners in the Baltic states with a wide range of measures, including business events with these countries. Around 500 people took part in economic forums with Latvia, Finland, Estonia, Poland and Russia conducted by the Chamber of Commerce in 2015 alone. Particular attention is also paid to collaboration with Denmark, Hamburg’s tenth largest foreign trade partner. Cooperation with Copenhagen plays a key role in this. The Hamburg Copenhagen Business Forum (HCBF) is held alternately in Hamburg and Copenhagen, the idea being to contribute to an even closer relationship between the economic regions of Hamburg and Copenhagen. For the second “Hamburg Copenhagen Business Forum” in November 2015, a 50-member business delegation from Hamburg travelled to the Danish capital to consider the topics of smart cities, energy, life science, logistics & IT, real estate and tourism. Another key focus is on Hamburg’s cooperation with the north-west of Russia, especially Hamburg’s twin city of St. Petersburg and the Kaliningrad area. The Hamburg Chamber of Commerce has had its own representative office in St. Petersburg since 1993 and in Kaliningrad since 1994, providing advice and support in initiating business in both directions and supporting educational projects with Russia.
In order to support cooperation with the Baltic region even more, the Hamburg Chamber of Commerce is also campaigning for Hamburg to boost its profile in Baltic politics and for the German Federal Government and the European Commission to pay more political attention to the Baltic region. Infrastructure projects with high priority in this context include the planned tunnel under the Fehmarn Belt as an efficient solution to growing transport in the Baltic region, channel adjustment on the Elbe and the renovation of the Kiel-Canal. The Baltic motorway A20, which is to continue as Via Baltica in Poland and the Baltic states in future, is also vital. Economic relationships in the Baltic region will not only be bolstered by the expansion and modernisation of the transport infrastructure, however, but also by the exchange of ideas and information between the companies involved – something that the Chamber of Commerce will continue to promote.
Fritz Horst Melsheimer
Born in 1950 in Traben-Trarbach on the Moselle river, the author studied Business Administration in Bochum, Würzburg and Hamburg. From 2002 to 2014, he was CEO of the HanseMerkur insurance group, and is now Chair of its Supervisory Board. Fritz Horst Melsheimer is President of Hamburg Chamber of Commerce.