Operating environment

We are developing environmentally friendly rail and city traffic in a continuously changing operating environment. Our company is affected by global megatrends, economic turns and crises. Political decisions and changes in regulations also have a central role in our operations and the requirements for sustainable traffic and logistics.

Consumer and corporate customers, stakeholders, owners and employees have increasingly higher expectations for companies’ responsibility. Here at VR Group, responsibility is at the heart of the business activities as the theme uniting our group’s business and growth areas. We take the financial, social and environmental impacts of our operations into account in our decision-making.

We believe that rail traffic will be a growing sector in the future and it has an essential role in our efforts to combat climate change and increase the well-being of society. The more Finnish people and industry use the train compared to other modes of transport, the more society will benefit. This is not only about smooth everyday traffic and supporting the competitiveness of industry but also about reducing emissions from traffic.

As a company, we are committed to the Finnish Government’s ambitious objectives for cutting emissions, according to which Finland will be carbon-neutral in 2035 and carbon-negative soon after. Our responsibility efforts are also based on the UN Sustainable Development Goals.

Megatrends control development

Climate change is one of the central megatrends of our time and combatting it requires rail traffic to grow. The electric train is an environmentally friendly option because it produces less emissions and consumes less energy than other modes of transport. We have already been using electricity produced with renewable energy and we are committed to improving energy efficiency purposefully.

Another megatrend affecting our operations is urbanisation, due to which passengers now travel between large cities and expect direct and fast connections. Digitalisation has brought with it new opportunities for customer service, enhancing operations, and business activities, such as seamless trip chains.

Many phenomena transcend borders

The general economic situation and exports opportunities, the current state of international politics and the development of prices on the world market affect the demand for products on the market and, through that, matters such as rail logistics volumes. In turn, the changes in the regulations for the traffic sector affect our company on many levels, through both Finnish and EU-level legislation.

In a global world, crises do not stay within state borders. Business operations must continue, even in the middle of things such as epidemic-related threats and uncertainties. The Covid-19 crisis and the related restrictive measures have affected travel volumes in an unprecedented way and created challenges for public transport. In this situation, it is important to stand as a broad front and strengthen the trust in public transport, whose safety is ensured in numerous ways. This will also strengthen the trust in the future of sustainable modes of transport.

Growth in a competitive market

We operate in the open market in our business areas of rail and road logistics, train and bus passenger services and maintenance. In Finland, competition in rail traffic is becoming more intense. In the changing market environment, we focus on the continuous improvement of our operations and customer experience and seeking new growth.

We won the historic competitive tendering for the operation and maintenance of HSL commuter traffic in the capital region in spring 2020. In other areas, passenger transport was fully opened to competition from 1 January 2021, when VR’s exclusive rights to long-distance traffic expired. In Finland, passenger transport has been opened to competition using the Open Access model, where operators can compete on the market on the same railway section with their own train fleet.

Investments in railway network are beneficial

Long-term investments into the maintenance of the current railway network and new investments into the future make it possible for rail traffic to grow, and through that, the society’s carbon footprint to decrease. In Finland, the railway network is under strain from a repair deficit and lack of capacity, which negatively affect rail transport by reducing punctuality and delivery reliability. The most significant share of delays is caused by disruptions in the rail infrastructure. We are, together with other rail industry operators, continuously improving the reliability of traffic.

The decisions important to rail traffic are done in negotiations that concern not only the national traffic system planning, contracts about land use, living and traffic, but also future rail investments and their project companies. The decisions on public transport funding and regenerative traffic investments during times of crisis also have a significant role. But the fact is that society benefits from climate-friendly and safe rail traffic that acts as the backbone of the nationwide transport system.