Beating a Path to Poland

By Luke King

(6-minute read)

In the next two years, a new €250 million offshore wind terminal will open in Gdańsk, underscoring Poland’s commitment to energy transition and indicative of a focus on renewable power that is generating substantial business for the project forwarding community.

The central European nation is enjoying an unprecedented period of growth. Unemployment has fallen below 5% for the first time since 1990, when Poland was beginning its post-communist transformation, while GDP per capita may overtake that of the United Kingdom by 2030, according to the World Bank.

Freight forwarders have been quick to seize the opportunity, evidenced by a steady stream of new office announcements in Poland from the logistics sector in the last 12 months.

Among those with new Polish operations is deugro, the German headquartered project cargo specialist, which opened an office in Gdynia, a port city a few kilometers north of Gdańsk on the Baltic Sea coast, in October last year.

Mariusz Rutowicz, country manager for Poland, explained the motivation to Breakbulk, citing deugro’s “long history in successfully completed projects in Poland.”

He said: “Poland is at another very important threshold of infrastructure development. “Our current government has implemented several huge investment programs that require specialized service - including in the field of logistics.

“Many logistics companies are currently investing in Poland to keep up with the development of global connections and strengthen the supply network.”

Infrastructure upgrades, including road, rail and port facilities, have also enhanced Poland’s logistics capabilities, Rutowicz said. He pointed to major projects at Gdańsk, Szczecin / ?winouj?cie and Gdynia ports, plus new terminals at Baltic Hub – all of which are “making the country more accessible and efficient for logistics operations.”

Intervention by the state has also been encouraging, Rutowicz added. “The Polish government has been supportive of business investments, offering incentives and creating a favorable regulatory environment for foreign companies. This includes tax incentives, grants and streamlined administrative processes.”

UTC Overseas – a global forwarder that opened a Gdańsk office earlier this year – offered some additional reasons for the company’s foray into Poland. “Decarbonization has an enormous influence,” said Jakub Walasek, director of UTC’s Poland office.

“It involves building new low emission power plants, mostly gas-powered. Additionally, the exchange of old coal-fired plants to gas-powered plants is a big thing. The war in Ukraine will end one day and the country will need to be rebuilt. Poland is the closest in terms of history and culture to Ukraine so a lot of business will be done this way.”

Renewables a Major Driver

Rutowicz said that substantial investments in renewable energy, particularly wind and solar power, was a “major driver” for the significant growth in the Polish heavy-lift market.

Such investments are leading to “increased demand for project cargo and specialized logistics services, creating opportunities for logistics providers to support the transport of large and complex components,” he said.

“Szczecin, as the location for the new factories of wind turbine components, holds strategic importance due to its proximity to the Baltic Sea, which is emerging as one of the main areas for offshore projects in Europe.”

Another recent development was the European Commission’s approval (under EU “state aid” regulations) earlier this summer for Poland to invest €194 million in the aforementioned new offshore wind terminal.

“After years of delays, there is a green light from the European Commission for the construction of a terminal in Gdańsk for Polish wind farms on the Baltic Sea,” wrote Jan Szyszko, deputy minister of funds and regional policy, in a July social media post.

The terminal will be located at Baltic Hub – Poland’s largest container port – and will facilitate the installation and servicing of wind turbines in the Baltic Sea as part of Poland’s plans to generate up to 51% of electricity from renewables by 2040.

The total cost of the project is €253 million, with the balance financed by the beneficiary, Istrana, which will build the terminal. It is expected to be operational in 2026 and will operate under a lease between Istrana and the port authority ZMPG until 2055.

Separately, renewable energy manufacturer Vestas announced plans to build a new offshore nacelle and assembly factory in Szczecin to meet “rapid offshore growth.”

The Szczecin facility will assemble nacelles and hubs for Vestas’ flagship offshore wind turbine, the V236-15.0 MW, and is expected to create 700 direct jobs when it starts operations in 2025. “The factory will support domestic and global demand and will play a crucial role in supporting Poland’s offshore wind market and industry,” the company said.

In January 2024, Vestas revealed plans to build a second factory in Szczecin, this time a blade factory, located at a site in northern Szczecin, close to the nacelle and assembly factory. It is expected to come online a year later, in 2026, adding more than 1,000 direct roles.

“Poland is transforming its energy system and is a promising wind energy market with good conditions both onshore and offshore,” said Nils de Baar, president of Vestas Northern & Central Europe. “Poland has a highly skilled labor force and growing wind industry that can become an offshore hub for the Baltic Region – and the rest of Europe.”

“Highly Significant” Nuclear Announcement

Poland’s plans to start building its first nuclear power plant in 2026, in partnership with Bechtel, are well publicized, but the government’s recent approval of 24 small modular reactors (SMRs) is described as “highly significant for project forwarders” by deugro’s Rutowicz.

“Future investment in these reactors represent a substantial logistical undertaking, involving the transportation of large, complex, and sensitive components,” he said.

“The opportunities for project forwarders are considerable, including the need for specialized transport solutions, handling equipment and expertise in managing oversized loads and hazardous materials.

“Moreover, the construction of these reactors will likely span several years, providing long-term projects and steady demand for logistics services. Project forwarders can also benefit from partnerships with reactor manufacturers, construction firms and other stakeholders.

“Overall, the SMR projects present a unique chance to demonstrate logistical capabilities, innovate in transport methodologies and contribute to Poland’s energy transition, positioning project forwarders as critical players in this sector.”

The Polish government says building the SMRs across six sites by 2030 will help accelerate the phasing out of coal as well as ensure stable power supplies as the country reduces its use of fossil fuels.

Challenges, as Well as Opportunities

Lawyer ?ukasz Chwalczuk, president of the Polish Heavy Transport Association and a board member of ESTA, says his firm has assisted a number of international project forwarders to establish Polish operations with a view to exploiting the “huge opportunity” he sees in his home country.

Despite the strong prospects, Chwalczuk described a number of issues that were hindering heavy cargo operations in Poland. “Before the war in Ukraine, 70% of drivers in Polish trucking companies were Ukrainians and many of them have returned home to fight, so there is a big gap to fill there.”

Aside from a driver shortage, Chwalczuk bemoaned a lack of digitalization in the heavy haul process. “Road permits are still printed on paper so, for the last two or three years, our association has been putting a lot of effort and money to try and introduce digital permits for heavy transport.

“Some of our small neighboring countries already have a digital system and Poland is, from my knowledge, one of the last to still be on paper, and rather behind – so we need that to change.”

Walasek from UTC added that difficulties arose due to aging infrastructure that is not always well maintained. “Sometimes, even new bridges suffer from a lack of documentation and construction problems. Other than that, the weather in Poland is very unreliable, so if you plan to transport any heavy items on the river, you can be lucky or very unlucky.”

Notwithstanding the difficulties, logistics companies continue to tread a path to Poland in search of business that is currently hard to come by elsewhere in Europe, said Chwalczuk.

“Germany was a very big market for heavy transport for many years, but for the last year or two it became super difficult to find good contracts. In terms of the Polish heavy transport market, we see many, many jobs.

“Poland is building a lot of highways, express roads, the infrastructure sector is looking good. There are rail projects too, and huge money is being spent.”

deugro, Baltic Hub and UTC Overseas are regular exhibitors at Breakbulk events. The next event in the calendar is Breakbulk Americas 2024 on 15-17 October in Houston.