Logistics in Latvia

[BalticLegal]

Logistics in Latvia, due to the country's geographical advantages as a gateway between the Scandinavia, Central Europe and Eastern Europe, has always been a priority area. Ensuring good logistics and transport infrastructure is vital for Latvia, as the country's roads are abundant with commercial vehicles from the neighbouring countries. This is also the reason why delivering goods to Latvia as a part of market entry processes is an easy task.

Since 2004, when Latvia became a member-state of the European Union, the country's borders with other member-states are open and do not require mandatory customs checks to transport goods. On average, 30 - 35 million tonnes of cargo crosses the country each year, including roads, railroads, aircraft and waterways.

Roads
There are more than a thousand roads in the road network of Latvia, including State Main, State Regional and State Local roads. The total road length in Latvia is 13181.616 km. Out of them, 10 570.151 km are hard surface roads - all the main and the biggest roads belong to this category. 2611.465 km of roads are gravel roads - these are mostly local and some regional roads.

The State Main roads are the biggest roads connecting major cities, e.g. the Riga - Ventspils road. There are 15 State Main Roads in Latvia, and all of them connect the major trade hubs of the country. The major cities joined by the State Main road network are Riga (port/airport), Daugavpils (railroad hub), Ventspils (port/airport) and Liepāja (port). The roads also connect bigger cities of regional importance - Rezekne, Jelgava, Jēkabpils and others. 9 of the State Main roads lead to the borders with other countries: Russia (1 road), Lithuania (4 roads), Estonia (3 roads) and Belarus (1 road).

There are a number of State Main roads with ring roads, designed to go around bigger cities, so as to allow transit vehicles to move faster, without the need to navigate through cities. These roads are:

Daugavpils ring road, connecting Kalkūni and Tilti
Rēzekne ring road
Riga ring road, connecting Baltezers and Saulkalne
Riga ring road, connecting Salaspils and Babīte
The State Regional roads are big roads that usually connect bigger cities and/or cities of regional importance, but can also connect cities to important nearby facilities, such as the P133 road that connects Riga and Riga Airport. Many of them also lead to the borders with neighbouring countries, but the roads themselves are more narrow than the State Main roads, which is why big commercial vehicles do not typically use them.

The State Local roads are all the other roads that are not included in the other two categories. These are the smallest, often gravel, roads, which connect smaller cities and villages with bigger ones, smaller cities with other smaller cities or provide an alternative route to State Main and Regional roads.

Railroads
Latvian railroads are under the supervision of the ‘Latvian Railroads; (in Latvian: Latvijas dzelzceļš) - the state-owned company, whose aim is to manage and control railway logistics in Latvia. The company has 6 daughter companies:

AS ‘LatRailNet'
SIA ‘LDZ Apsardze' (security)
LDz infrastruktūra (infrastructure)
LDz Cargo (transportation)
LDz Ritošā sastāva serviss (maintenance)
Latvian railroads are the main commercial transportation infrastructure, especially for inland traffic. Out of all the transportation types, railroads carry the biggest amount of cargo - approximately 50 million tons of it every year. Railways connect Latvia with neighbouring countries and also provides way to the rest of Europe, as well as to the Eastern Asia, as far as Japan and China. Latvian railroads also connect all the major cities and trading hubs, such as Riga, Ventspils, Liepāja and Daugavpils.

Maritime ports
Latvia has three major ports, and all of them are ice-free (available for operations throughout the year) - Riga, Liepāja and Ventspils ports. There are also three minor ports, in Salacgriva, Lielupe, Engure, Mērsrags, Roja, Kolka and Pāvilosta.

Latvian ports are specially designed to attract businesses. All the major ports are Special Economic Zones, meaning they provide tax reliefs on the most widespread taxes, such as VAT or the excise tax on alcohol, tobacco, gas and oil, as well as other advantages and tax incentives.

Latvian freeports are mostly used by exports, manufacturing and logistics companies, who enjoy a corporate tax rate of 3% and proximity to the biggest administrative centres of Latvia. The average annual industrial space rent prices in the ports are:

Riga - 20 500 EUR
Ventspils - 15 500 EUR
Liepāja - 15 500 EUR
About 74% of the cargo that goes through the Latvian ports is related to the trade between Latvia and other EU member-states. 26% of the cargo are goods traded between Latvia and non-European country. The ports give Latvia the advantage of easily accessing countries that are close, but separated from Latvia by sea, thus making land communications problematic and overly expensive. These are mainly Scandinavian countries, such as Sweden, Denmark and Finland.

Airports
Riga Airport is the biggest and most important airport in Latvia. There is a number of smaller airports throughout the country, but they are usually used for private flights, not commercial ones.

There are approximately 20 passenger airlines operating at the Riga Airport, providing flights to more than 80 destinations all over the world. The number of passengers increases every year, and in 2015 their number reached more than 5.2 millions. The top 5 destinations are London (UK), Moscow (Russia), Frankfurt (Germany), Oslo (Norway) and Helsinki.