In February 2022, Russia invaded Ukraine, resulting in extensive international impact. In the Finnish forest industry, the consequences of the invasion include difficulty procuring raw materials and logistical challenges.

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At the beginning of April, the EU adopted sanctions on the Russian forest industry. The fifth round of sanctions included acquisition, import and transport bans of wood and wooden projects to the EU from or through Russia. The ban also covered services, such as the manufacture of products and financial services. However, the sanctions included a three-month transition period for old contracts, allowing some imports until the beginning of July. The import statistics of the Finnish Customs Service show that the import of materials such as wood chips, firewood, raw wood and sawn timber had ended by August, meaning that the sanctions had taken effect.

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Those following the discourse surrounding the forest industry have probably seen this phrase before: “Turning our gaze on domestic thinning activities and imports from the neighbouring regions.” Imports from the neighbouring regions mostly refer to the Baltics, Sweden and, to some extent, Germany. Sweden has its own processing industry that also depends on import. In the Baltics, the competition for raw wood materials has increased over the past year which, in turn, is reflected in the prices of the raw materials.

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From January to October, the member companies of the Finnish Forest Industries Federation acquired 27.4 million cubic metres of wood from private forests. After the summer, timber sales picked up speed and the autumn sales have been busier compared to the same period in the previous years. At the same time, many forest industry companies have strengthened their procurement organisations, resulting in genuine demand targeted at Finnish forests.

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Logistics is one of the major challenges in the procurement of Finnish raw materials. The maintenance backlog of the road network has increased and, for the forest industry, this is particularly challenging in the road network with a lower maintenance priority and on private roads. In rail traffic, a shortage of railway wagons during peak transport seasons has been a problem for a long time. This was alleviated by an amendment, valid until further notice, which allows the use of wagons registered abroad in domestic traffic. We extend our warm thanks for this to the parties involved. However, the railways cannot support an endless amount of traffic. It is important to continue ensuring the sufficiency of the tracks and the ability to handle the maintenance backlog and the capacity bottlenecks.  Moreover, a sufficient number of timber terminals and loading stations is needed. Despite the challenges, we need to remember that VR Transpoint, for example, transported a record-breaking amount of raw wood, more than 1.2 million cubic metres, by rail in Finland in August.

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Those following the discourse surrounding the forest industry may also have heard this: “The forest industry dusted off an old mode of transport.”  According to Suomen uittoyhdistys (the Finnish log driving association), log driving is the most affordable way of transporting wood in the Vuoksi water system, for example. With the current prices, the difference is about 20% compared to other modes of transport.

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The log driving season ended recently. During the season, nearly 600,000 m3 of wood was driven by waterways, about a third more than one year ago. The amount of wood moved by water translates to more than 10,500 truckloads removed from our road network. In the near future, the amount of log driving is expected to increase, and Metsähallitus adopted log driving after a seven-year break. Stora Enso also plans to restart its log driving activities.

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A third statement often heard in talks about the forest industry is: “Finland is an island, or at least a backwater.” In 2021, the value of forest industry exports totalled EUR 13.2 billion, accounting for approximately 19% of the total value of Finland’s exports of goods.  19.8 million tonnes of forest industry products were exported, of which more than 90% were transported by sea. The importance of maritime transport is likely to increase as the VR railway transport across Russia ended at the turn of the year. The situation on the Baltic Sea will require attention; will the Baltic Sea be a sea of peace or something completely different?

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