Road and Island Ferry Traffic Governance and Markets in the Central Baltic Region

Abstract

<p>The approximate size of the entire road and island ferry markets in Sweden, Finland, Estonia and the Åland Islands is worth about EUR 320 million, of which almost EUR 300 million is publicly funded either from state, regional or municipal budgets. Well over 60 million passengers are transported every year, when also commercial sightseeing and other similar services are included, in addition to about 17 million vehicles transported mainly on road ferries.</p><p>Approximately 2,250 people are engaged in the operations either as crew or landside personnel of the service providers, over half of which are in Sweden. The figure does not include persons working with these services in competent authorities or with public procurement. These numbers are indicative only since some of the operators provide data by man-years, while others indicate the number of persons employed without specifying the amount of full-time and part-time staff.</p><p>What is common for all four regions is that significant amounts of public funds are needed to maintain these vital road and island ferry services, as they cannot be operated solely on a self-costing and commercial basis. The usage of public funds is naturally subject to political decision-making at national, regional or local (municipal) level.</p><p>In many cases, these services are offered for free, as is the case of road ferries in Sweden, mainland Finland and cable ferries in Åland as part of the public road network. In mainland Finland, also island ferries are free of charge for passengers, but not necessarily for transport of cargo. Where the services are subject to ticket or freight prices, they are subsidised in all regions, typically up to 90% or more. Given this, the governance structure and political </p><p>guidance behind the operations are crucial elements in developing these services towards better service quality, safety and environmental standards.</p><p>Together with the public funds available for these services, also the requirements and incentives in competitive tendering processes are central in reaching even very ambitious environmental goals, where the services are subject to public procurement.</p><p>In cases where the services are produced by authorities, such as with Swedish Road Ferries or cable ferry operation in Åland, similar incentives need to be built into their operations by direct political guidance and goal setting. An example of these is Swedish Road Ferries’ Vision 45, which is agency's strategic plan designed to ensure the right future capacity while also meeting the climate policy goals set by the national government.<br></p><p>In competitive bidding for these services, the eligible tenderers need to fulfil certain minimum standards of the technical level of the vessel and the qualification of the crew, for example. This applies to all regions. </p>