Having long positioned itself as a bridge between the EU and Russia, the Estonian shipping sector is scaling back its operations, stepping back from direct competition with neighbouring Lithuanian and Polish shipping sectors. It is gradually shifting its focus towards its domestic market, with much of its international activity centred on its Finnish and Swedish neighbours.

Rampant inflation, which reached a record high of 25 % in 2022, is putting a strain on companies’ finances. Labour costs are soaring. To address this, the government has introduced an increase in non-contributory travel allowances to offset the rise in costs. More broadly, the Estonian economy is increasingly turning towards the Scandinavian and Anglo-Saxon markets. By abolishing corporation tax on undistributed profits, it is moving towards a tax liberalism that is open to the world.

Traditional sectors, such as transport and industry, are giving way to the IT sector, turning Estonia into Europe’s new Silicon Valley. As for its road haulage sector, it lost a third of its overall business between its peak in 2016 and 2022. The cost per kilometre for international intra-EU road freight transport increased by 26 per cent between 2019 and 2022, reaching €1.22/km, which is equivalent to the cost per kilometre in Spain.

The CNR invites you to take a look at this new study, which provides full details on the Estonian TRM.