Moreover, Skinest is currently said to be over a hundred days late with the delivery of its goods. The company has reportedly already incurred 30,000 euros in delay penalties. LTG Cargo claims that Skinest is also often late to rectify qualitative defects and shortages.

Extreme measures

As a result, LTG Cargo says it had to deal with more than 30 cases of technical problems where it had to delay or suspend scheduled deliveries while cargo was en route. It forced the company to carry out unplanned repairs in over 20 cases.

“We can no longer trust a supplier who constantly fails to properly fulfill its obligations, so we decided to take extreme measures – to terminate the contract and add Skinest Baltija to the list of unreliable suppliers”, says the head of LTG Cargo.

Skinest laments LTG Cargo way of operating

Skinest explains that the supply issues arose due to the covid pandemic and supply chain issues. “We must acknowledge that there have been certain breaches of the contract, namely delays due to the covid pandemic and disruptions in supply chains caused by the war in Ukraine, resulting in shortages of certain positions in the market”, says CEO Valdas Rasimas.

At the same time, Rasimas says that the company communicated these issues with LTG Cargo and requested a change of the supply terms. Rasimas says that “Skinest Baltija has repeatedly requested the possibility of changing the supply terms due to the situation that has arisen, but unfortunately, we received a negative response from LTG Cargo representatives.”

Moreover, Rasimas accuses LTG Cargo of mishandling technical issues. “Some defective reports were filled and submitted without the participation of Skinest Baltija representatives, although we actively requested the presence of our representatives,” the Skinest CEO says. “These reports were based solely on visual inspection without measuring specific parameters of the components, such as surface roughness or the ability of certain parts to withstand pressure. We disagree with such subjective, technically unfounded, and potentially erroneous defect assessments.”

Relationship hits rock bottom after ups and downs

According to Rasimas, there were ups and downs in the company’s relationship with LTG Cargo. “Some representatives attempted to preserve the contract, while others, due to their incompetence in assessing and evaluating components, discredited us as a supplier”, he says. However, he adds, “there were some periods of understanding, we even signed a settlement agreement last year as a proof of goodwill.”

Skinest does not agree with the situation as sketched by LTG Cargo. The relationship between the two companies has hit rock bottom. “Yes, we are preparing to take legal action”, says the CEO. “We will defend our rights according to the provisions of the law.”

Also read:

• Finnish cargo critical to making Rail Baltica relevant for logistics
• LTG Cargo launches first cross-Baltic service
• Lack of Baltic commercial operators hinders intermodality, says Samskip

The company already uses a rail service offered by LTG Cargo between Duisburg and Lithuanian Kaunas, which the company calls a ‘good alternative to road transport’. However, Samskip laments the fact that there is no operator that provides a financially interesting inland rail connection from Klaipeda as an alternative to other modalities.

Lack of commercial operators

At the moment, an intermodal rail connection from Klaipeda port is not always financially interesting, says Samskip. The company points to the lack of commercial operators as the culprit. “There is an insufficient number of commercially-minded operators in the region,” the Dutch logistics company says. Consequently, rail connectivity to Baltic ports is lacking, which provides an obstacle to intermodality.

Commercially minded operators are needed because the currently present state-owned operators do not provide interesting alternatives to different modalities. State-owned operators are widely considered to operate inefficiently. For example, state-owned companies Fret SNCF and DB Cargo have both been subject to EU reprisals over excessive state support following bad financial performance.

Rail Baltica

Rail Baltica may provide an impetus to improvement in the Baltics, according to Samskip. The EU-sponsored rail project aims to connect the three Baltic states with the rest of Europe on the standard European gauge TEN-T network. Currently, the existing Baltic railway infrastructure is oriented towards Russia, and the Baltic networks are badly interconnected because they were built during Russia’s rule in the area.

Rail Baltica would provide improved inter-Baltic connectivity and a high-speed line to the rest of Europe. ‘It could attract commercial operators,’ says Samskip. ‘That would be a very positive development for rail. Rail Baltica is planned to go through Kaunas, and a commercially viable route could then be extended towards the port of Klaipeda.’

Also read:

• LTG Cargo launches first cross-Baltic service
• Rail Baltica Estonia signs new contracts, optimistic about progress
• Estonian Railways’ losses expected to worsen in the coming years

Telus announced the possibility of a unilateral ban in a press conference. According to Interfax-Ukraine, there is no room for discussion over the interest of Polish farmers, “If it is necessary to introduce unilateral bans, we will introduce them, because we are concerned about the interests of farmers, and there is no discussion on this topic,” said Telus.

However, the transit of the grain would still be preserved. This could leave some window for grain exported via the Baltic corridor even if the ban comes into force. As Telus stated, “We are in dialogue with Ukraine, as well as with Lithuania and Latvia, in order to use their ports”.

Baltic corridor possibility

The discussion concerning the possibilities of exporting Ukrainian agricultural products keeps unfolding. Latvia insists that the Baltic route can work and that Latvian railway infrastructure and ports could accommodate between half and one million tons of grain volumes annually. Moreover, grain transport via Latvia could commence as soon as September.

Also read:

• Only the EU can ensure the success of Ukrainian grain exports
• ‘The Baltic route can be a good solution for Ukrainian grain exports’
• Ukrainian Railways launch new westbound services, while EU scrambles to fund grain exports