Comment: Impact of Government decisions on marine traffic

In the late evening of 12 March 2020, the Estonian Government proclaimed a state of emergency until 1 May and has established special measures to prevent the spread of coronavirus. Specific measures directly affecting Tallinna Sadam include: ban on cruise ship calls until 1 May, suspension of Tallinn-Stockholm cruise line sales, reintroduction of border control and ban on the entry for foreign nationals from 17 March, ban on visiting Estonian islands for two weeks from 14 March. The restrictions apply only to passenger traffic and do not apply to freight.

Passenger operator Tallink has announced the temporary closure of the Tallinn-Stockholm line as of 15 March, with freight being diverted to Paldiski-Kapellskär. Due to this decision, at this point one Swedish line vessel call per day will be canceled.

It is vital that the passenger traffic between Estonia and Finland on both Tallinn-Helsinki and Muuga-Vuosaari routes continues, to ensure that Estonians can return home via Finland and people living in neighboring countries can return via the Estonian transit corridor; and freight is ensured also. Due to the decline in passenger numbers, it is likely that schedules of the ships will be cut by the passenger operators. As freight traffic is maintained and ship calls continue, interruptions in passenger transport only concern passenger charges, which represent a smaller proportion of the revenue in the Passenger Harbours business segment.

The ban on cruise ship calls until 1 May directly concerns the cancellation of four scheduled ship calls. As of today, the cruise companies have not informed us of the cancellation of any more visits, but given global developments, they are likely to arrive.

Regarding the Cargo Harbours segment, the special measures can most likely affect ro-ro cargo, as all passenger ships are ro-pax type vessels, i.e. they carry both passengers and ro-ro cargo and are thus directly affected by possible downtime and reduced schedules of passenger lines. In containers we see a longer-term negative impact due to the slowdown in trade.

The domestic ferry lines of Saaremaa and Hiiumaa operated by TS Laevad, a subsidiary of Tallinna Sadam, will continue to operate on a sparse schedule in order to ensure the island residents’ return home and continuity of cargo traffic. The management estimates that the changes resulting from the restrictions will not have a significant impact on Tallinna Sadam, as the fixed fee, which is irrespective of the number of voyages, stipulated in the ferry agreement covers all fixed costs of the vessels and their operations (including salaries of the crew) and ensures planned profitability.

The impact of the coronavirus pandemic on Tallinna Sadam will be significant due to disruptions in passenger traffic and the general economic downturn following the disruption of the virus, but this cannot be objectively assessed at this time. Tallinna Sadam will take the necessary measures and cooperate fully with the authorities to achieve a common global goal of preventing the spread of the virus and protecting human lives and health. Together with the operators, we analyze the impact of current developments and prepare for different scenarios of the crisis. We offer our passenger operators the opportunity to use the quayside without charge for the ships of the passenger lines departing from the Old City Harbor while they are away from the line due to the crisis.

Valdo Kalm

Chairman of the Management Board

 

Additional information:

Marju Zirel

Head of Investor Relations

AS Tallinna Sadam

m.zirel@ts.ee

 

 

 

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