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Ensuring effective logistics and transport chains

Government measures have improved the operating environment for logistics in the target areas but have also created new risks. The National Audit Office of Finland recommends that government resources be prioritised for activities of national importance.

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Scope of the audit

  • The audit was targeted at government measures aimed at ensuring the operational reliability of the Finnish logistics system.
  • These measures were examined from the perspective of promoting and utilising the strengths and reducing risks.
  • The audit also examined the impact of government measures on various actors in the logistics system in Finland.

Key findings

  • Government measures have improved the operating environment for logistics in Finland in line with the targets.
  • The impacts of the measures have been distributed differently geographically and across target groups.
  • Economically justified decisions and prioritisation of resource use are needed to maintain operational reliability.
  • Digital system development projects require coordination and benefits monitoring.
  • Management of the transition to new energy sources requires extensive cooperation between the authorities and other actors as well as common operating models that support the transition.

Briefly

Well-functioning logistics is the foundation for Finland’s competitiveness and security of supply. The logistics costs of companies are significant, approximately 12.5% relative to GDP. Although Finland’s logistics system is effective when compared with other countries, Finland’s remote location, the long transport chains and the crises of recent years have increased the costs and weakened accessibility. The NAOF examined 19 measures taken by the central government to improve the operating conditions for logistics. The measures have promoted digitalisation, the transition to new energy sources, preparedness for crises and smooth transport, but they have also increased vulnerability and created new risks. The audit highlighted the need to prioritise resources for activities of national importance, to develop the economic assessment of preparedness, to coordinate digital systems and to manage the transition to new energy sources through cooperation. The regulation must also be clear, and nationally important sites must be considered in the development of ports.

Government measures have improved the operating conditions for logistics and transport but increased risks – ensuring operational reliability requires the prioritisation of resources, clear regulation and cooperation.

In the logistics surveys, the University of Turku has examined the logistics companies' perceptions of their operating conditions. On the assessment scale, 1 means very poor and 5 very good performance. The companies' perceptions varied clearly between 2010 and 2023. The companies' rating of their general operating conditions from the perspective of their business operations decreased from 3.7 in 2010 to 3.5 in 2014. After this, their rating increased, reaching 3.8 in 2020, but started to fall again and was 3.6 in 2023.
Perceived operating conditions for logistics in Finland in 2006–2023. (Source: University of Turku. Logistics surveys 2006–2023.)
The conditions for the efficiency of the logistics operating environment in Finland consist of internal strengths and weaknesses as well as external opportunities and threats.
Conditions for the efficiency of Finland’s logistics operating environment. (Source: Ministry of Transport and Communications, 2024. Tilannekuva Suomen logistisesta toimintaympäristöstä [Status of the operating environment for logistics in Finland].)

Around

12.5%

Logistics costs of industry and trade in relation to GDP in 2022

Around

13.8%

Share of logistics costs in companies' turnover in 2023

Recommendations of the National Audit Office

The Ministry of Transport and Communications, the Ministry of Finance, the Ministry of Economic Affairs and Employment and the Prime Minister's Office should together ensure that there are sufficient resources for activities of national importance, such as international influencing, the development of information systems and the implementation of the Alternative Fuels Infrastructure Regulation (AFIR).

The Ministry of Transport and Communications, the Ministry of Finance and the Prime Minister's Office should develop the economic assessment of preparedness measures in order to build a strong knowledge base for decision-making. This supports the appropriate allocation of resources between, for example, the construction of transport infrastructure needed for preparedness and the operation of logistics under normal circumstances. Both economic and other possible grounds must be presented clearly and transparently in the decision-making process.

The Ministry of Transport and Communications, the Ministry of Finance and the Prime Minister's Office should, through careful preparation, ensure the clarity and predictability of the legislation affecting the logistics and transport sector and the assessment of legislative impacts.

Timing of follow-up

The follow-up of the audit will be conducted in 2028.

Contact persons

Katja Estlander

Principal Performance Auditor, D.Sc. (Tech.)

Performance audit

Audit areas: Ministry of Finance, Ministry of Transport and Communications, Prime Minister’s Office

Teemu Kalijärvi

Audit Manager

Performance audit

Audit areas: Ministry of Finance, Ministry of Transport and Communications, Prime Minister’s Office

Other audits related to the topic

Funding base for security of supply

URN identification

URN:ISBN:978-952-499-586-3 Permanent link: https://urn.fi/urn:isbn:978-952-499-586-3