This month ESPO is talking with Marko Mykkänen, Managing Director of the Port of Oulu. In what follows, Marko Mykkänen tells ESPO more about the characteristics and challenges of managing a port in Northern Finland, but also how he got into the port sector as well as his vision for the port for the next decade. He also shares his views on the potential of digitalisation in ports, the impact of COVID-19 on the port, and the port’s environmental priorities.
Can you briefly tell us about the Port of Oulu? What are its main characteristics and challenges?
The Port of Oulu is the biggest general port in the North and among the top 10 biggest ports in Finland with annual volumes around 3-3.5 million tons. The biggest cargo volumes are coming from forest industry products and different fuel oils. The Port of Oulu is also the 5th biggest container port in Finland. From Oulu, there are several regular shipping lines to different parts of Europe, as well as good connections to Sweden.
In recent years, and in terms of square meters, the Port of Oulu has been the fastest growing port in Finland, and it will continue to be so in the years to come. Over the last five years, the area of the Oritkari harbor increased by more than 50 hectares. In addition to this, more railways, quays, fields and storage capacity will be built in the new West Quay area. So far, all new areas have immediately come into use upon completion, and this will be the case in the future as well. There is a great need for more capacity due to the growing number of new clients and the types of goods handled. The target considered most important by the Port’s clients, the new 12.5-metre-deep channel, will also come into use during the year 2021. The new deep channel enables more cost-effective transport via the Port of Oulu, and it will increase the flow of goods via the Port by dozens of percentage points. But the Port of Oulu is not the only one investing, there are also several big investment projects ongoing among the Port of Oulu’s customer sites.
The growth of the port also creates challenges regarding the hinterland connections. During the last couple of years, we have especially focused on railway connections to our port. And fortunately, all our key railways projects outside the port area have now been funded by the government and the construction work is about the start at the end of 2021. We will have direct hinterland connections to all directions within the Nordic area.
How did you get into maritime transport? How did your career path lead to this position?
I studied industrial engineering and management/logistics at university and since then I have been working in the logistics field, both on the industry side as well as on the service provider side. I’ve been lucky to be able to see and participate many different projects, from small, local actions to the development of huge global demand supply chains. And after many years, I still work with the many great friends that I have met during the journey. Working for the port means working with all different branches of industries and all different modes of transport.
What is your vision for the Port of Oulu for the next decade?
The future of the Port looks extremely bright. The traffic will increase and become even more versatile. The preconditions for growth are excellent. Also, several years ago, we already took a head start in Finland in developing digital solutions and new business models for the port. That development will for sure continue and will become as important as building the physical infrastructure for the port. In Finland, all the biggest ports are limited companies and we have the capability to act on the new business areas also outside of the traditional port area and to invest in operations that we feel will support our core business.
Sustainable development is also growingly increasing its importance. In the next decade it will be an essential part of every service provider’s agenda. In our port, we have already tied digitalisation and sustainable development together, paving the way to a cleaner future.
The COVID-19 crisis is having a profound impact on the European economy and society. What has been the impact of this crisis on the Port of Oulu?
We are part of the global supply chains and we have therefore also seen the impact in Oulu. For example, uncertainty has delayed some customer investment decisions, the container market has undergone many different challenges and, for example, the need for fuel oils have decreased.
In terms of port operations, we have not experienced any difficulties. We have been able to operate normally despite the pandemic. But of course, several measures of precaution have been taken.
European ports are increasingly investing in digital solutions to improve the efficiency of the logistics chain and port operations. The Port of Oulu is currently developing a Digital Twin. Can you briefly explain the main features of this Digital Twin? Do you think digitalisation can contribute to making port operations and the logistics chain more sustainable?
Our Digital Twin will be a port in your hand, for all our partners. It will take you through the most important issues you are looking for. For different users it will of course mean different features but in short, it will enable to execute the normal real-time operations or to search for vital information, wherever you are situated. Digital Twin will also contribute to historic data analyses or future operations planning.
In general, digitalisation will be one of the major forces of change that will affect the whole port industry in the future. But it is not a threat. It is an opportunity to develop things, services, business models, awareness and above all, sustainability. With digitalisation we can create a much more precise picture of everyday operations than before and we are also able to react much faster and in a more powerful way to upcoming changes. Digital and sustainable development must also be tied together in order to fully exploit the possibilities of digital development. And therefore, yes, digitalisation will contribute to making port operations and the logistics chains more sustainable.
The new Connecting Europe Facility II (CEF II) will extend the Scandinavian-Mediterranean corridor of the Trans-European Transport Network (TEN-T) to the Port of Oulu. The Port of Oulu is currently already a comprehensive port of the TEN-T network. The TEN-T policy will be shortly reviewed. Are there any issues which need to be tackled?
There has been a long interest for this extension project both in Northern Finland and in Northern Sweden. Especially, this is great news for the several infrastructure projects that are either already in the ramp-up phase or still at the drawing table. Extension also reflects the growing importance of the Arctic policy.
As already stated by the Finnish government officials, Finland is missing TEN-T core network ports and airports in Northern Finland. Our true intention and desire is to add both Port of Oulu and Oulu airport to the core TEN-T network during the next TEN-T review. This is important not only to Nordic areas but also to our partners in Central Europe with whom we are building resilient and efficient logistics chains.
We are waiting for a new legislative proposal on the need for ports to develop clean fuel infrastructure in the ports. The new proposal will review the obligations to foresee onshore power (OPS) in the port. Do you already have OPS in the port or are you planning to install it? In your opinion, what are the conditions for OPS to be a success in a port? How do you see the use of OPS evolving in the future?
Yes, we have OPS installed in our port and, actually, we are right now in discussion with shipping companies to extend the service. OPS is a big part of the solution for lowering the emissions in the port area, but it is not the only one. It should be implemented when the implementation makes sense, especially from a cost-effectiveness point of view.
As stated earlier, all the biggest ports in Finland are limited companies and cost-effectiveness is a precondition for every investment. Technology is also evolving very fast and new innovations will be happening in this sector in the coming years, the ones with the most potential being, for instance, LNG, methanol, biofuels, ammonia and hydrogen. So I’m sure that there will be different alternatives for OPS in the future. In general, port authorities are strongly supporting the target of greener shipping and are willing to exploit the opportunities of new technology.
Are there specific challenges related to being a “Nordic” port? Are there any specific infrastructural requirements that a “Nordic” port needs?
Nordic conditions are something that we are very familiar with. During the winter, our everyday operations run as smoothly as during the summertime. What makes wintertime special is the ice and the ice breaking of the sea. Normally our ice period at the Bay of Bothnia lasts around 100-200 days per year. And the ice thickness varies from 30 cm to 70 cm or even more. Cold winters are easy to handle but climate warming is making ice breaking harder and harder each year. Strong winds are pushing the weak ice to form large ice banks. These ice packs can be even 20-30 meters thick, which makes ice breaking in those areas very difficult. The Finnish government is handling the ice breaking in general, but as a port we also have one tug that has ice breaking capabilities. However, it operates only inside the port area where the ice breaking is quite easy. Otherwise, no special infrastructure is needed in order to operate in the Nordic area.
The Port of Oulu is part of the ESPO EcoPorts Network. Can you briefly tell us about the Port of Oulu’s environmental priorities? How do you think a port managing body can contribute to the decarbonisation of transport and the logistics chain?
In recent years, environmental responsibility issues have become more and more important. And those are the issues that we want to pay constant attention to. By taking advantage of digitalisation, environmental targets can be achieved much more precisely and from a wider perspective. It means that ports can also be huge contributors to the decarbonisation development in the whole transport industry. It all starts from the co-operation and common goal sharing with the shippers and logistics parties. Port of Oulu has very ambitious targets in terms of decarbonisation path. As a port authority we want to achieve carbon neutrality very soon; after that, our target is to be carbon negative. I’m very glad to notice that many of the cargo shippers and logistics partners share our vision and are on board of our common journey towards the better future.