Compared to the beginning of the year, Tallink's freight volume has improved somewhat. While freight traffic had fallen by as much as 30 percent earlier this year, the drop was just 10 percent in July, said CEO Paavo Nõgene. "So there has been some improvement, but it's clear that there are still more ships operating on these routes than there is cargo to transport," he noted.

Estonia's main export partners are Finland and Sweden, both of whose economies have struggled in recent years.

While there are signs of economic recovery in Sweden, no such glimmer of hope is yet visible in Finland.

"In Sweden, there are expectations for more than 1 percent economic growth by the end of this year, and between 1 and 2 percent next year. Unfortunately, that's not yet the case in Finland. According to recent forecasts, it's possible that in the second half of the year, Finland may be able to report slight actual growth. Next year, economic growth in Finland is expected to be around 1 percent," Nõgene said.

Nõgene emphasized that improvements in the Finnish and Swedish economies will translate into increases in freight volumes.

Tallink does not plan to make major changes to its routes.

"In the longer term, the ships currently operating — especially the cargo volumes between Estonia and Sweden — will continue to operate. But Tallink is constantly adapting its operations. Ships rotate between routes from time to time and we've had chartered vessels return to our fleet, so we've made adjustments. Just this Wednesday, we announced the sale of one of our cargo vessels. Naturally, we're always responding to market conditions. But we don't foresee any major changes on the Estonia-Finland or Estonia-Sweden routes," Nõgene said.

In the longer term, the market will be influenced by how European Union regulations take shape, he added.

"This includes how road transport, air traffic and shipping are taxed. If regulatory changes create competitive imbalances — favoring one sector over another — the market environment could shift accordingly," Nõgene said.

"There's certainly regional freight traffic, primarily with Finland and Sweden. But there are also longer-distance routes. Whether cargo is loaded onto ships in Poland or travels through the Baltics and boards in Tallinn depends heavily on EU-level tax decisions," he said.

In recent years, the tax burden on the shipping sector in the EU has increased.

"Environmental fees have been introduced and shipping has been included in the emissions trading system. This clearly affects the entire maritime sector. The challenge in shipping is that there are currently no available technologies to fully transition to zero emissions. That means all shipping companies are forced to purchase CO2 allowances, which significantly raises the cost of transport. As a result, exports become more expensive. And when exporting gets more expensive, it may eventually no longer make sense to manufacture goods in places where it once did," Nõgene explained.

"All such environmental fees, especially in sectors where alternative technologies are not yet sufficiently advanced, are bound to have a major impact on operations," he added.

Nõgene noted that freight volumes are an early indicator of economic trends.

"We saw a decline in freight volume before the economy itself began to contract. In some sectors, we're now seeing signs of recovery even before it shows up in the actual numbers. For a long time, construction materials weren't being shipped from Estonia to Sweden. Now we're seeing that flow resume, which indicates that Sweden's construction sector is starting to recover. That, in turn, will begin to show up later in Sweden's economic figures," he said.

"In May, the unemployment rate in Finland exceeded 10 percent. That's the highest it's been in the past 15 years. It's clear that such a high jobless rate affects consumer spending power. It definitely also influences how many people travel to Estonia," Nõgene added.

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