Finnish VR’s freight business deteriorates, layoffs approaching

Image: VR Group

The freight business of the Finnish state-owned VR Group is probably going through one of its roughest periods. The cut-off of eastbound traffic towards Russia, directly affecting the transport of wood products, has considerably lowered the company’s volumes, forcing it to look for ways to stay afloat, with layoffs not excluded.

“VR’s freight traffic situation is already challenging due to high inflation and the end of Eastern traffic, and the comparable result of the last quarter was negative. We have to consider the temporary adjustment of work in operations related to freight transport because our conditions to offer work are temporarily reduced”, commented VR’s director of logistics Eljas Koistinen.

VR’s dynamic trajectory in volumes and specifically wood transport volumes in the second half of 2022, did not pull through in 2023. The largest part of VR’s freight business concerned forestry products (raw timber, amongst others) that used to be exported to Russia. With the gradual phase-out of eastbound traffic in the second half of 2022, this traffic had to be diverted domestically with a significantly smaller market to cover.

Consequently, between January-April 2023, the company transported 8 million tons of freight, corresponding to a 20 per cent decrease compared to the same period in 2022. This significant decrease has started posing viability questions that VR needs to address.

Employees take the strike

Koistinen’s words referring to VR’s temporarily reduced conditions to offer work indicate the company’s situation, which might soon end up laying off employees. The negotiations for the possible measures to be adopted commenced on 29 March, with VR claiming that if it resorts to layoffs, it will attempt to make them “as short-term as possible”. This depends on the recovery of traffic and, specifically, the demand for transport within the forest industry.

The short-term layoffs will concern 1,900 employees active in the company’s logistics and train operations and will vary according to local transport needs, office and function. In any case, VR claims that “possible layoffs will last a maximum of 90 days”, and they could also take the form of “voluntary unpaid leave and family leave, the transfer of vacations, and the exchange of vacation pay for time off”.

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Author: Nikos Papatolios

Nikos Papatolios is editor of RailFreight.com, the online magazine for rail freight professionals.

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Finnish VR’s freight business deteriorates, layoffs approaching | RailFreight.com

Finnish VR’s freight business deteriorates, layoffs approaching

Image: VR Group

The freight business of the Finnish state-owned VR Group is probably going through one of its roughest periods. The cut-off of eastbound traffic towards Russia, directly affecting the transport of wood products, has considerably lowered the company’s volumes, forcing it to look for ways to stay afloat, with layoffs not excluded.

“VR’s freight traffic situation is already challenging due to high inflation and the end of Eastern traffic, and the comparable result of the last quarter was negative. We have to consider the temporary adjustment of work in operations related to freight transport because our conditions to offer work are temporarily reduced”, commented VR’s director of logistics Eljas Koistinen.

VR’s dynamic trajectory in volumes and specifically wood transport volumes in the second half of 2022, did not pull through in 2023. The largest part of VR’s freight business concerned forestry products (raw timber, amongst others) that used to be exported to Russia. With the gradual phase-out of eastbound traffic in the second half of 2022, this traffic had to be diverted domestically with a significantly smaller market to cover.

Consequently, between January-April 2023, the company transported 8 million tons of freight, corresponding to a 20 per cent decrease compared to the same period in 2022. This significant decrease has started posing viability questions that VR needs to address.

Employees take the strike

Koistinen’s words referring to VR’s temporarily reduced conditions to offer work indicate the company’s situation, which might soon end up laying off employees. The negotiations for the possible measures to be adopted commenced on 29 March, with VR claiming that if it resorts to layoffs, it will attempt to make them “as short-term as possible”. This depends on the recovery of traffic and, specifically, the demand for transport within the forest industry.

The short-term layoffs will concern 1,900 employees active in the company’s logistics and train operations and will vary according to local transport needs, office and function. In any case, VR claims that “possible layoffs will last a maximum of 90 days”, and they could also take the form of “voluntary unpaid leave and family leave, the transfer of vacations, and the exchange of vacation pay for time off”.

Also read:

Author: Nikos Papatolios

Nikos Papatolios is editor of RailFreight.com, the online magazine for rail freight professionals.

Add your comment

characters remaining.

Log in through one of the following social media partners to comment.