By
Alex Smith |
The ferry sector has faced a multitude of complex challenges in recent years, from the pandemic to global pressures on revenue and ever-changing security risks.
“The slow volume recovery continues but shipping companies still need to manage risks through alternative revenue streams such as chartering,” says Paavo Nõgene, CEO of Tallink Grupp. “Meanwhile, the global geopolitical and security situation impacts both cargo and passenger transport, fuel prices are still high, and the logistics chains for ship fuels have changed significantly, resulting in higher fuel transport costs. Also, mounting climate legislation and related costs are putting financial pressure on shippers.”
When it comes to the implications of these factors for the revenue from passengers travelling on the brand’s ships, Nõgene says: “Tallink’s overall aim isn’t to achieve ever higher passenger numbers, but rather to improve profitability. It is important to remember that often the numbers are not comparable. For example, in our case the number of passengers has reduced, but this is partly due to fewer ships operating on regular routes and some ships being chartered out. So, the passenger numbers are not the most reliable comparison figures to look at, but rather profitability figures and comparisons.”
The company is working hard on growing its profitability with its newest fleet member, shuttle vessel MyStar, which boasts an upgraded customer experience with new passenger areas and facilities.
“The aim is to enhance comfort, offer more personalised services and options, and ensure customers see the journey onboard our ships as even more enjoyable than reaching the destination,” says Nõgene. “This is accompanied by an even greater focus on offering an environmentally friendly way of travelling. We will continue to enhance and develop our services, making them even more smooth and seamless, more digital, sustainable and personalised.”
Tallink’s newest ferry MyStar operates on LNG fuel, which has helped the operator to reduce greenhouse gas emissions
Since 2009 Tallink Grupp has reduced its absolute carbon dioxide emissions by more than 50 per cent, an achievement on which Nõgene says the company is keen to improve.
“Of course, we still have a long way to go to achieve the ambitious targets of carbon neutrality set by the International Maritime Organization, but work continues with significant milestones already achieved in this area.”
The company is working towards environmental targets on several fronts. “We have made significant efforts in reducing carbon dioxide emissions and other greenhouse gas emissions, and not only in recent years, when it has become more topical,” says Nõgene. “In the last seven years, Tallink Grupp has invested more than €550 million ($598.8 million) into green shipping initiatives.”
A significant slice of that investment has gone towards enabling the brand’s ships to connect to shore power facilities in port. “The key achievements in 2023 in this area include now having shore power available and in use by all company ships in regular traffic during longer port stays in Tallinn, Helsinki, Turku and Stockholm ports,” says Nõgene. “We continue to look for solutions to reduce emissions, so most of our investments will be directed towards this from a technical point of view.”
Another development is the addition of a second LNG vessel to the company’s busiest route between Tallinn, Estonia, and Helsinki, Finland, thus effectively creating a ‘green bridge’ between the two Nordic capitals.
In addition to these measures, Tallink has introduced automooring systems in Helsinki port (this type of system is already in use in Tallinn Port), and carried out pilot reblading of Baltic Queen’s propellers. The company has also joined ABB’s Energy Efficiency Movement and conducted technical upgrades on Baltic Queen and other ships in its fleet.
“We are also implementing many other smaller technological solutions and advances aimed at increasing energy efficiencies, reducing fuel consumption and reducing greenhouse gas emissions,” says Nõgene.
This article was first published in the Spring/Summer 2024 issue of Cruise & Ferry Review. All information was correct at the time of printing, but may since have changed. Subscribe for FREE to get the next issue delivered directly to your inbox.