Greece: International Freight Center

2nd edition, April 2021 Contents Introductory note

e issue this updated report • Logistics and courier, express and In addition, we present all recent at a time when the world is parcel (CEPs) companies adopting developments in: experiencing the full effect of both in-house development and The Greek shipping and 8 W • the Greek shipping and maritime the COVID-19 pandemic, with some innovative start-up collaboration, logistics industry, maritime logistics industry bright signs slowly appearing on the to reduce products’ and offerings’ • the Greek hinterland logistics horizon. delivery time to the market. 1 industry, • Digital logistics as a means of During this pandemic era, we have • the Greek road freight transport, Economic performance of 36 integrating operating systems, witnessed severe disruptions to in order to more effectively • the Greek rail freight transport, the Greek logistics market inbound and outbound shipments communicate information, • the Greek air freight transport, and heavy port congestion, both 2 synchronize activities, collaborate • and the public sector’s support and of which have severely impacted across a wide range of business facilitation of trade in Greece. the transportation and logistics Road freight transport 54 processes and provide E2E visibility. (T&L) industry. Cost structures and • Increased private equity (PE) and As our report reveals, Greece, overheads continue to be the biggest venture capital (VC) funding, toward leveraging its strategic geographical internal challenges, as industry 3 start-ups in the transportation location, along with increasing players consider strategic drivers for sector, but also to traditional market investment in upgrading its improving profit margins. Technology Air freight transport 64 players. transportation and logistics and innovation remain the key pillars infrastructure, has gone a long way for business process transformation in • Extended supply chain risk toward developing its position as a the industry. intelligence and sustainability are 4 global logistics hub, over the past climbing on top of the agenda of an years. It is clear, however, that there As the coronavirus pandemic increasing number of stakeholders, is still room for improvement for Public sector support 76 threatens to drag the global economy as global organizations and our country to achieve what we call to a new, deeper recession, the associations look to lower the impact “excellence”. T&L industry manages to stay of transport and logistics on the 5 environment, through regulations afloat, supporting the local and At EY, we are proud to have succeeded global communities to overcome and policies. ​ Evaluating Greece 84 over the years in standing at the this unprecedented threat. The forefront of developments in the as a logistics hub keyword for the industry’s next day Furthermore, it is vital to underline global, regional and Greek T&L is “resilience”, as global players are the industry’s move from “doing 6 industries. This report is part of our transforming their linear supply digital” to “being digital”, which contribution to drive the dialogue chains to value-chain interconnected translates to the implementation of Conclusion and 102 among all stakeholders, with an ecosystems on cloud-enabled supply chain technologies that open aim to explore the optimal ways to recommendations platforms, involving multiple up new revenue streams, rather than address the challenges that the Greek stakeholders. Digital ecosystems are simply efficiencies, and necessitates 7 transportation and logistics industry shaping market networks and enabling the closure of the talent gap in digital is facing, and take advantage of the hybrid forms of cooperation and fluency. All of the above being critical opportunities arising in an ever- competition: coopetition. Ecosystems value drivers for organizations and changing global environment. create and serve communities economies – now, next and beyond. and harness their creativity and The journey for Greece has already intelligence. Entities may play multiple In this challenging global environment, begun, with our country taking pivotal roles in an ecosystem. In this greater the Greek T&L community is heavily steps toward sustainable growth and context, we see the following key investing and expanding its footprint. success. We really look forward to trends developing in the industry: In our – second of its kind – report, which also includes a survey on the seeing how these efforts will develop • The rapid growth of e-commerce Greek transportation and logistics over the coming years, and how worldwide, which is expected to infrastructure, we examine the role of Greece will manage to reach its full propel the emergence of new Greece as a competitive intermodal potential as a leading global freight consumer trends and the adoption of corridor for the European seaborne and logistics hub. exponential technologies to support trade with Asia. online customers’ growth.

Thanos Mavros Yannis Pierros Partner, Consulting Services, EY Greece Partner, Assurance Services, EY Greece EY Greece and EY Central, Eastern and Southeastern EY Central, Eastern and Southeastern Europe & Central Asia Europe & Central Asia (CESA) Supply Chain & (CESA) Advanced Manufacturing (Assurance) & Mobility Operations Leader Leader ince the first edition of this survey was published in 2017, SGreece has been making progress in its efforts to becoming an international freight center, leveraging its strategic geographical location, a recovering economy and a friendlier investment environment. However, this progress has been driven primarily by developments in the shipping and the maritime logistics industries, as well as in road infrastructure. More work will be needed with regard to rail and air freight transport, hinterland logistics, the third-party logistics market (3PL), customs services and, above all, the interconnectivity of these distinct nodes of the Greek transport and logistics industry (T&L).

The shipping and maritime logistics Piraeus and the broader Attica region series of planned investments within industry is steadily on the rise have been at the epicenter of this the next years, aiming at improving Thessaloniki: Shipping is, undoubtedly, one of the growth, attracting important shipping infrastructure and achieving better strongest cards of the Greek economy, activities, including ship management integration with the railway and road An important node of the contributing around €11b – or 6.6% of companies, shipyards and shipyard networks, transforming the port into a Trans-European Transport the country’s GDP in 2019. The Greek- subcontractors, port operators, freight state-of-the-art logistics hub. owned merchant fleet is the largest forwarders, and third-party logistics Network in the world, accounting for 15.6% of providers (3PLPs). the global fleet in deadweight tonnage The port of Thessaloniki is part of the (DWT), while vessels controlled by Piraeus: Moreover, at a time when trade flows Trans-European Transport Network Greeks carry 21% of global seaborne between Asia and Europe continue to largest commercial (TEN-T) and is situated in proximity trade. st grow year after year, Piraeus offers 1 port in the to the Trans Adriatic Pipeline a highly competitive end-to-end (TAP). The master plan of the port, The strong presence of Greek shipping alternative connection to the ports Mediterranean

Executive summary Executive prepared in 2017 and approved companies, and the leading position of the Far East, compared to North by the European Commission, sets of the Greek-owned fleet in the global European ports, in terms of transport clear short- and medium-term maritime community, have been the th largest port in duration, frequency of service and priorities for the development and major drivers behind the development 4 cost, allowing the country to develop Europe in terms of upgrade of Thessaloniki to a middle of the Greek shipping cluster, as one of into a major maritime interface for TEUs (2019 & 2020) category European port; the main the most significant and competitive The Greek-owned merchant fleet is Europe. developmental actions aim at raising maritime centers in the world. The the capacity of the cargo terminals, majority of Greek shipowners have a the largest in the world, accounting Piraeus has been one of the most Significant investments are underway as well as upgrading the sea cruise ship management office or operate for 15.6% of the global fleet in rapidly growing ports in Europe and for the port of Thessaloniki, the facilities and transit services their business from Greece and, in was the largest commercial port in the primary entry port for Northern capabilities. spite of the growing international deadweight tonnage (DWT), while Mediterranean, and the fourth largest Greece and an international logistics competition – mainly from emerging among all European ports in terms of hub for all Balkan countries, following maritime centers in Asia – they still vessels controlled by Greeks carry total container throughput in 2019 its privatization in 2018. consider Greece as an attractive 21% of global seaborne trade. and 2020, despite the pandemic’s location for establishing their ship adverse effects on global trade. The management offices. vision of turning Piraeus into the south gate of Europe is backed by a 4 5 In total, more than 25 important service levels. However, they have The growth of the supply chain Increased international air freight air freight in 2019 passed through Conclusions and recommendations commercial seaports are currently also become more positive toward industry has also triggered the transport through the Greek the “Eleftherios Venizelos” Athens In order to increase its attractiveness operating in Greece, five of which have outsourcing their basic logistics development of supply chain airports, presents significant International Airport. as an international freight center or a been identified by the EU as ports of operations, allowing reliable 3PLPs, business parks with the first two opportunities for the country leading regional logistics hub, Greece strategic interest and key maritime which have invested in service quality major investments implemented at Greece has a total of 45 airports – Οutbound freight will need to focus on four priorities: interfaces of the Orient / East-Med and innovation, to expand their market the Oinofyta industrial zone and at of them, 15 are international, 26 transport increased • Improve connectivity with global (OEM) corridor. share and improve their performance. Igoumenitsa in Western Greece. domestic and four are municipal. trade lanes and other hubs, The Greek 3PL market grew by 4.6% from 40% in 2008 to The “Eleftherios Venizelos” Athens primarily, but not exclusively, by in 2019 and is expected to grow by A comprehensive and modern road International Airport (AIA) is, by far, 57% in 2019 leveraging the Greek shipping an annual average rate of 2.8% in the network leads the growth of road 25+ the predominant Greek airport, in ecosystem. medium term (up to 2023). freight transport terms of both freight volumes and important commercial A much improved legal and • Improving its port and logistics Road transport in Greece suffered passenger traffic, emerging as an regulatory logistics framework infrastructure, with investments in seaports Greek 3PL market in a dramatic reduction between important passenger and logistics hub has borne fruits, but there is still logistics parks needed to match the 2009 and 2015 – however, the for Southeast Europe. 2019: road ahead to catch up with the progress made in port infrastructure. international freight component of competition the road freight market has been The 40-year concession of 14 • Strengthening its financial ecosystem In recent years, the T&L industry has growing steadily since its record low regional airports starting in 2015, to provide top-level financial and 5 ports +4.6% worked closely with the public sector to in 2011, boosted by the expanding has led to major investments for their business services. of EU strategic interest develop a long-lasting transformational +2.8% projected annual international trade through Greek renovation and further development, • Upgrading technology, innovation plan to support the sustainable Further privatizations or concession ports – primarily Piraeus. The further a process completed in January 2021. and human capital, to allow the average growth rate development of the logistics market agreements involving some of the increase of international trade More than 30m passengers passed development of new business (up to 2023) and international trade. This resulted main regional ports are expected to volumes transshipped via Greece and through the 14 airports in 2019, the models and enable the required in a comprehensive legislation reform lead to additional investments and a the recovery of the Greek economy, last year before the collapse of the transformation of supply chains. in 2014, with a new law providing strengthening of their competitiveness Greek 3PL companies provide a full can be expected to further boost road tourism industry worldwide, due to a holistic regulatory framework, and international status. range of supply chain services, with transport activity in the coming years. the pandemic, which led to a 69.3% To materialize on the above, the EY facilitating investments and reducing a significant part of their income decrease in passenger traffic in 2020. report presents a series of area- red tape in logistics installations Meanwhile, similar developments coming from warehousing and Greece has one of the most developed specific recommended actions, with permits. beyond the ports themselves are distribution activities, as well as from road networks in Southeast Europe, Air freight transport in Greece has regards to: shaping a more competitive and the organization and management of consisting of more than 2,145 km a share of ca. 35% of international Partly as a result, Greece has been reliable hinterland for Piraeus and road transportation. The sector mostly of highways and motorways. In terms trade in terms of value, but only 1% in gradually improving its international The ports the other important Greek ports. The comprises of medium- and small-sized of tonnes of commercial road transport, terms of weight. However, air cargo 1 ranking with regards to trade privatization of the Greek railway companies, that operate in a highly Greece ranked 11th among EU countries transportation is rapidly expanding, The road network facilitation, trade competitiveness operator in 2019, is expected to competitive environment. in 2019, with 354m tonnes, compared with international intra-EU and extra- 2 and logistics performance. However, lead to a faster development of the to Germany’s 3.2b tonnes. EU transport in Greece growing by The 3PL / 4PL sector in most of these indices, Greece Greek railway network system and the The Thriasio Logistics Center 10.1% and 5.9% respectively, between 3 continues to lag behind its main addition of high- and ultra-highspeed headlines a series of major logistics 2017 and 2018. This may lead to Air and sea freight transport Over trading partners and competitors. trains to the lines, as well as an projects in the country significant opportunities for Greece 4 upgrade of the Athens–Patras route, The most important logistics markets to emerge as Southeast Europe’s The rail network Greece’s five Free Trade Zones, as well which will make land connections with have developed around Athens and gateway for air cargo traffic, providing 5 2,145 km as customs warehouses operated by ferries to and from Italy, possible. Thessaloniki and are closely linked a real alternative to congested hubs The customs 3PL providers and freight forwarders, to the country’s main international of highways and worldwide. 6 provide clear benefits to importers The human capital in the T&L The Greek third-party logistics maritime interfaces: the ports of motorways and shippers, in terms of improved industry market still faces many challenges Piraeus and Thessaloniki. In 2019, air freight carried through 7 cash-flow and greater flexibility The 3PL market in Greece faced In 2018, the Greek road transportation Greek airports reached the pre-crisis and transparency. Meanwhile, an Brand awareness significant challenges as a direct The construction of the new industry accounted for 30% of volume of 2008, after suffering a 44% 8 increasing number of 3PLs, airlines, result of the severe downturn of the intermodal freight and logistics park in enterprises in the transportation drop during the Greek financial crisis. and shipping companies in Greece, Greek economy from 2009 onward. the Thriasio Pedio plain, near Piraeus, and storage services sector. The International air freight transport have been certified as Authorized Though it had been rebounding will significantly enhance the port’s industry consists primarily of small accounts for around 90% of the total, Economic Operators (AEOs), thus since 2014, the market has yet to hinterland and will also facilitate companies and owner-driver haulers, with extra-EU traffic surpassing intra- enjoying benefits throughout the EU, completely recover to numbers before the potential development of new that provide low-margin traction EU for the first time in 2018, and easier access to simplified customs the financial crisis, with the turnover operations and added-value logistics services to medium or large national outbound freight transport gradually procedures and a more favorable of the Greek 3PLPs recording a services. When fully developed, and pan-European logistics providers. increasing from 40% in 2008 to 57% position to comply with the new compound annual growth rate (CAGR) Thriasio will be one of the largest dry The hire and reward transportation in 2019. More than 88.3% of the total security requirements. of -2.06% between 2008 to 2019 (but ports in Southeast Europe. sector had a share of 26% of the total with a +3.55% CAGR since 2014). road freight transportation activities in In addition, the logistics center to 2019 (in terms of tonnes-kilometer), The contraction of consumption be built at Gonos, a former military significantly below the EU average. The and production, along with the slow camp in Thessaloniki – currently at market is characterized by low margins, growth of international trade, put a lot the pre-feasibility stage – is expected largely due to its high fragmentation of pressure on Greek manufacturers to provide additional storing capacity and reliance on small providers (1.5 and traders to lower their costs, to the port’s terminal and greatly trucks per provider, on average). without reducing performance and enhance its potential.

6 7 The EU-27 account for around 15% of Asia, and Africa – Greece holds a 2019 was another year of double- the world’s trade in goods. This is an unique geographical position in the digit growth for Piraeus, as the The Greek shipping especially important factor, since the international maritime routes. It is of port captured the first place in the value of international trade in goods no surprise, therefore, that Greece Mediterranean, reaching 5.65m significantly exceeds that of services has traditionally been an important twenty-foot equivalent units (TEUs) by approximately three times. maritime nation. The Greek-owned annually4. The Greek port continues and maritime logistics merchant fleet is the largest in the to climb the rankings by gaining two Since 2004, the European Union, world, accounting for 15.6% of the places, occupying the 4th position in 1 the United States, and China have global fleet in deadweight tonnage Europe in 2019 and 2020 (despite industry been the largest global players in (DWT)2. Shipping is the country’s COVID-19’s impact), jumping over international trade. In 2019, the EU- most important industry and Greek the Spanish ports of Valencia and 27 recorded over €4t in total trade ports are vital hubs for the West-East Algeciras5. The fact that Piraeus was in goods (excluding intra-EU trade). international trade. not even in the top-15 in 2007, is a Greece as the southeastern logistics This was €23b more than China testament to the port’s tremendous gateway to Europe: Greece’s central and €308b more than the United Even though Greece accounts for just improvement over the past decade. location in the Eastern Mediterranean States, with Japan standing fourth, at 0.15% of the world’s population, 21% approximately €1.3t. of global seaborne trade is carried In addition, COSCO – the port’s provides a competitive intermodal corridor by vessels controlled by Greeks3. operator – has invested in also for the European seaborne trade with Asia In 2019, Russia and China saw a The Greek-owned fleet provides an transforming Piraeus into an remarkable increase in their export- indispensable service to Greece, to important inland gateway to Europe, to-import ratio in terms of exports, Europe, and to the world at large, by expanding the port’s hinterland both having the largest annual trade something that constitutes a major infrastructure and improving its surpluses. The EU-27 followed with achievement for a country of such railway and road connections toward the second largest share, capturing small size. Central Europe. In 2013, the port 15.4% of total global exports and of Piraeus was connected to the imports. The only country exceeding As maritime transport remains the main national railway network via those numbers was China with 16.2%, backbone of globalization, and trade a new high-speed electrified line. while the United States stood at flows between Asia and Europe Additionally, COSCO has taken control 10.6% of the global total. As for global continue to grow year after year, of PEARL (Piraeus-Europe-Asia Rail imports, the United States led with traffic through the Mediterranean Logistics), a company providing rail 16.2% of the total share, while the ports is increasing and Greece’s role as logistics support and other freight EU-27 and China captured 13.7% and a major maritime interface for Europe forwarding services to and from 13.1% respectively. The EU-27 trade is becoming more apparent. In this Piraeus and other Greek ports. in goods with the rest of the world respect, the Greek ports and other (i.e. the sum of extra-EU exports and major transportation infrastructure, as As a result, Piraeus offers a highly imports) was valued at just over €4t well as logistics operations in Greece, competitive end-to-end alternative in 2019. Both imports and exports are widely considered as attractive connection to the ports of the Far were higher compared to 2018, with investment opportunities for major East, when compared to North the increase in imports (€27b) being global companies. European ports, in terms of transport smaller than the increase in exports duration, frequency of service, and (€73b). As a result, the EU-27’s trade Indeed, the significance of the cost. In this respect, Piraeus links surplus of €152b in 2018, increased country’s main ports, namely Piraeus Asia to the major Central European to €197b in 20191. and Thessaloniki, as major gateways in logistics centers, in significantly less the West-East maritime route has been time compared to the large North Located in the southernmost point of recognized by foreign investors over European ports. Europe and standing at the crossroads the years. of three continents – Europe,

1. International Trade in Goods, Eurostat, March 2020 2. Shipping register continues to shrink, ekathimerini.com, 17 June 2020 3. Greek Shipping and Economy 2019, ugs.gr, 2020 4. Annual report 2019, COSCO Shipping, 12 February 2020 5. Top 15 containers ports in Europe in 2020, porteconomics.eu, 2 March 2021

9 For example, it is estimated that a become a strategic alternative for Greek state handing 67% of the shares Greece is further Greek ship-owners control position as the largest ship-owning trip from Asia to the Czech Republic major multinational manufacturers, of the Thessaloniki Port Authority S.A. nation, in terms of tonnage capacity strengthening its position the largest merchant fleet in through Piraeus is 8-9 days shorter, shipping liners and international to the new owners of the port, South the world and value, with 3,968 vessels and an in comparison to the same trip logistics providers. Furthermore, the Europe Gateway Thessaloniki Ltd. as the largest ship-owning approximative value of US$105b in through Rotterdam or Hamburg. This recent privatizations and concession Thessaloniki constitutes the primary According to the Union of Greek 2020. Despite the domestic and global is because freight rail transportation agreements are shaping a more entry port for Northern Greece and nation and one of the most Shipowners, shipping contributed challenges that the Greek ship-owning services from Piraeus to the major competitive and reliable hinterland for acts as an international logistics important shipping centers around €11b – or 6.6% of the community faces, Greece continues logistics centers in Central Europe are Piraeus and the other important Greek hub for all Southeastern European country’s GDP in 2019. Deep-sea to lead the ranking of ship-owning performed in approximately four days, ports. In short, it is evident that the markets7. worldwide. shipping and related services employ nations. Greek shipowners remain by dedicated block trains, whereas the opportunities for logistics operators more than 192,000 people, according the dominant force in global shipping, maritime trip from China to Piraeus is and traders are considerable. The port of Thessaloniki will to the Hellenic Statistical Authority – accounting for 15.6% of global DWT, 8 8-9 days shorter when compared to substantially improve the international nearly 3% of Greece’s total workforce . followed by Japan (11.47%), China the North European ports. Moreover, On 1 April 2019, Ferrovie dello Stato competitiveness of Greece. (10.51%), Singapore (6.19%), Hong the Southeastern European intermodal Italiane S.p.A. acquired TRAINOSE’s Thessaloniki is the second biggest Greece has always been considered Kong (5%), Germany (4.92%), the corridor via the Piraeus port is not Rosco, a company which supports container port in Greece and the as one of the five most important Republic of Korea (3.91%), Norway only a faster and a more lucrative railroad systems and repairs railway biggest dry bulk and break bulk port Greece is home to traditional shipping centers in the (3.11%), the United States (2.97%), alternative supply chain route for wagons6. The Italian company is of the country. It is an operating port world, with its main advantage being and Bermuda (2.97%)9,10,11,12. shippers and traders, but also a more now ready for the development of with six piers, 6,200 meters of quay, the largest ship- its large ship-owning community. reliable one. the Greek railway network system in 1.55m square meters of port land and owning community The majority of the Greek-owned two phases, adding high- and ultra- several buildings and warehouses. In a national economic environment, fleet consists of oil tankers and dry In the current globalized and highspeed trains to the lines. The Additionally, the port of Thessaloniki is in the world which offered little investment bulk carriers, followed by gas carriers incentives, the Greek shipping demanding supply chains, the company is also set to reinstate the part of the Trans-European Transport 15.6% of the global fleet in terms of and containerships. In fact, Greek reliability of logistics services is a popular Athens–Patras route, which Network (TEN-T) and is situated sector provided increased foreign shipowners lead the rankings of the deadweight tonnage is owned by Greek major concern among traders and used to operate in the past, making in proximity to the Trans Adriatic exchange earnings. In particular, the world’s largest merchant fleets in the nationals logistics providers and, in most land connections with ferries to and Pipeline (TAP). contribution of Greek shipping to the tankers and bulk carriers’ categories. cases, much more important than from Italy, possible. 15.6% country’s economy is as important as Lastly, it is worth noting that the the speed of services. As shippers Furthermore, the development of it is diverse, going beyond the receipts Greek merchant fleet is expanding require quality delivery and certainty Moreover, the construction of the the Gonos Logistics Center in a for maritime transport services into rapidly growing markets, such as on when their delivery will take place, new intermodal freight and logistics plot of 672,000m2 near the port recorded in the balance of payments, liquified natural gas (LNG) carriers the Greek south gate to Europe has park in the Thriasio Pedio plain, near of Thessaloniki, will also enhance which amounted to €17.3b for the and containerships. Despite the been highly modernized with regards Piraeus, will significantly enhance the the Greek hinterland to the Balkan 2019 fiscal year. negative impact of the recent global to the provision of reliable railway port’s hinterland and will also facilitate countries, at the Greek northern economic downturn, as well as the and road freight services. Global the potential development of new borders. The most used railway The country’s geographical location severe competition by developing business cases, like those of HP, Sony operations and added-value logistics corridor from the Thessaloniki port and its human capital are also cities and countries − primarily in Asia and Huawei, which use dedicated services. to the Central European economic important factors, contributing to its − Greece has managed to maintain its block trains departing from Piraeus and logistics centers is PanEuropean high position among the top shipping high position among the top maritime port to transport their products to The privatization of the port of Corridor X, which passes through countries in the world. The Greek nations. Central European markets, have Thessaloniki finally concluded in March North Macedonia, Serbia, Hungary, shipping industry has weathered the proved that the Greek hinterland can 2018, for a fee of €1.1b, with the Slovakia, the Czech Republic, etc. storm and strengthened the country’s

The transit time of a containership from China to Central and Eastern European markets via Greece is estimated to be Hamburg Rotterdam 8-9 days shorter, Antwerp compared to the North European ports. Le Havre Thessaloniki Piraeus Shanghai Hong Kong

Singapore 8. Greek Shipping and Economy 2019, ugs.gr, 2020 9. Review of Maritime Transport 2019, UNCTAD, 31 January 2020 10. Greek Shipping is First in The World in Vessel Value, greece.greekreporter.com, 6 February 2019 6. Press Release – Completion of the EESSTY SA sale to TRAINOSE SA, Hellenic Republic Asset Development Fund (HRADF), 1 April 2019 11. Maritime, greeceinvestorguide.com, 5 October 2020 7. Top 15 container ports in Europe in 2019: TEU volumes and growth rates, porteconomics.eu, 21 February 2020 12. Greek fleet reduces in number of ships, increases in tonnage, seatrade-maritime.com, 12 March 2020

10 11 The renowned global The majority of the Greek According to the LSCI, Greece ranks performed at least some of their ship management office in Greece provided environment for establishing their 20th in the world with a score of management functions in Greece, them with significant competitive ship management offices. While there shipping cluster developed shipping community operates from Greece 60.3, scoring higher than competing whereas 56% performed the totality advantages. Even though there is have been significant developments in in Greece, offers a diverse countries in the region. What is more of such functions in the country. growing competition, mainly from the four years since that survey was Most of the Greek-owned fleet’s ships impressive is that Greece has also While almost one in four respondents emerging maritime centers in Asia, conducted, we believe that the key portfolio of maritime- are either flying a Liberian or Marshall managed to climb from the 69th place found no competitive advantage in most of the survey participants still trends identified are still valid. related services. Islands flag. In actual numbers, in to the 20th, in just eight years. flying the Greek flag, 73% agreed or considered Greece as the single most March 2020, out of the 3,968 total Greek shipowners are the second strongly agreed that having a ship attractive and complete maritime Greek-owned ships, 866 ships flew a biggest customers of the world’s Liberian and 850 a Marshall Islands shipyards, purchasing their ships from flag. In terms of deadweight tonnage, Japan, South Korea, China, Germany, ships flying a Liberian flag represent and, to a lesser extent, from France 22.7% (i.e. 77,323m DWT) of the and Italy. Current fleet by flag (in million GT) World flag fleet per type of total Greek DWT, while ships flying vessel, based on the number of a Marshall Islands flag represent As shipping is predominantly a family vessels 20.3% (i.e. 69,344m DWT) of it. The business for Greeks, it is sometimes Maltese flag comes third for Greek- hard to know who exactly the largest Greece owned ships, with 673 ships and industry players are. Possibly, this 15% Tanker 62.1m of the Greek DWT. Some other is due to the fact that shipowners’ Bulker remarkable numbers come from assets may be suddenly separated or Containers Panama (375 ships, 22.2m DWT), 235.3 USA 12% Gas Carrier merged, rearranging the picture. It 62.4 General Cargo Cyprus (226 ships, 17m DWT) and the is also worth noting that shipowner 56% Other Bahamas (203 ships, 18.24m DWT). family names are the ones that are 5% 47.7 It is worth mentioning that the Cyprus usually the most recognizable in the Singapore 2% flag lost 22 Greek-owned ships during shipping community, rather than the Germany 68.6 8% 2019; a loss of 2m in DWT. names of the companies by which the Norway fleets are managed. Greek shipping In terms of ship numbers, the Greek- continued to lead the world in 2019, 63.3 owned fleet occupies 7% of the world with Japan following in second place 196.6 World flag fleet per type of fleet; 13.2% in terms of gross tonnage and China ranking third. According to 38.5 Denmark vessel, based on ship size (GT) and 15.6% in terms of DWT. The Lloyd’s List “One Hundred”, there are China P.R. fact that Greek parent companies many Greek shipowners amongst the 1% 60.9 represent 26.6% of the world tanker 100 most influential people in world South Korea 14 fleet and 14.7% of the ore and bulk shipping . Tanker fleet, is also highly remarkable. 179.8 Bulker Other The strong presence of Greek shipping Italy 44.1 36% Overall, the Greek fleet is currently companies, and the leading position 63% trading under 32 different flags. of the Greek-owned fleet in the global Greek vessels under the Liberian and maritime community, have been the Japan Marshall Islands’ flags have increased major drivers of the development of over the course of the last year, the Greek shipping cluster as one of despite the total Greek fleet declining. the most significant and competitive Source: Clarksons Research World Shipyard Monitor Source: Statista.com, EY analysis The home flag fleet comprised of 636 maritime centers in the world. ships, and 65.64m DWT and 38.8m GT Although a significant part of Greek- in 202013. owned vessels do not fly the Greek flag, Greek shipowners are more than Evolution of Greece in the Liner Shipping Connectivity Index (LSCI) The Liner Shipping Connectivity Index keen on having a ship management 20th (LSCI) captures how well countries office and operating their business 30th (60.3) are connected to the global shipping from Greece. networks, based on five components (47.4) of the maritime transport sector: In 2017’s “Re-positioning Greece as a) the number of vessels, b) container a global maritime capital” report, capacity, c) maximum ship size, EY had surveyed leading members d) number of services, and e) number of the Greek shipping community, in of companies developing container order to shed light on the industry’s ships in a country’s ports. In recent perceptions of the comparative 69th years, Greece has shown growth in advantages and disadvantages of (32.1) improving its commercial infrastructure Greece as a shipping cluster. Based and public commercial ports. on the results of the survey, 97% of respondents reported that they 2011 2016 2019 13. Ibid. 14. Lloyd’s List One Hundred People 2020, Lloyd’s List, 2020 Source: UNCTAD, EY analysis

12 13 The Greek flag registry Most important national fleets by DWT capacity* in 2020 potential to maintain its leading this end, efforts should concentrate port of Piraeus in the first half of 2020 position for years to come. However, on the two aspects where the Greek may have declined by 6.2% (compared The Greek registry continues to be as a response to global competition, maritime cluster mainly lags compared to the same period in 2019), but it one of the strongest fleet registries in Cyprus 39,549 several initiatives have already been to its competitors: ship financing was not as devastating as in other the world, based on the total number implemented – or are planned – by the and research, as well as technology. significant European ports (e.g. the of registered vessels, as well as in Danish Int’l Register 39,993 Greek shipping community, aiming to Therefore, short- and medium-term port of Rotterdam, Europe’s largest fleet capacity. In terms of deadweight Indonesia 44,542 attract more shipping companies to measures should focus on securing sea port, recorded a traffic decline tonnage capacity, the Greek-registered Norwegian Int’l Register the Piraeus cluster and more vessels adequate access to funding for of 9.1% in the first half of 2020, as a fleet ranked 10th globally in 2020 47,995 and ship-owners to the Greek registry. shipping-related facilities, and on result of the coronavirus pandemic, across all types of vessels (and 9th Japan 51,287 improving maritime education and while the port of Hamburg saw its when accounting only for the major Greece 117,051 The establishment of a more attractive training. The existence of several TEU throughput fall by 12.4% over the vessel types), while it was featured China P.R. and business-friendly regulatory shipping associations, organizations, same period)18,19,20. among the top-10, based on its total 130,289 environment, supported by a more as well as marine education institutes number of vessels15. Bahamas 130,552 favorable national tax framework, in Greece, provides a good mixed In total, almost 5.44m TEUs were Malta 181,673 have been promoted as the two most foundation which can further enhance handled in Piraeus port in 2020, Singapore 221,532 important areas on which public sector the cluster’s role as a research and marking a 3.8% decline, when interventions should focus, in the development (R&D) hub. compared to the 5.65m TEUs handled Hong Kong 269,506 coming years. The further enrichment in 2019. However, Piraeus seems to Liberia 446,449 of the Greek shipping cluster with new Piraeus Port Authority (OLP) have withstood the COVID-19-related Panama 450,335 services and capabilities, is the second data shows that the effects of the pressures and managed to maintain its most important focus area for the COVID-19 pandemic were less severe position among the top 15 container Marshall Islands 458,558 improvement of the competitiveness than what had initially been expected, ports in Europe, ranking fourth for the of the Greek maritime cluster. To as the number of TEUs handled by the second year in a row21.

Source : Clarksons Research World Fleet Monitor, EY analysis *Analysis includes only major vessel types The Piraeus port concentrates the majority of the Greek shipping cluster’s activities

The Greek fleet is dominated by important perceived advantages of the Piraeus and the broader Attica region The world’s most 1m cruise passengers tankers of all types, which made up for Greek flag, were the high standards have attracted the most important well-known Greek More than 1m cruise passengers 32% of vessels under the Greek flag of compliance with the Paris MoU shipping activities, including, among were recorded at the cruise and 60.91% of the total gross tonnage, (38%), as well as the availability of others, ship management companies, shipping companies terminals in 201924. followed by bulkers, which amounted marine engineers (33%) and offshore shipyards and shipyard subcontractors, have established their core businesses to 12.91% and 24.87% respectively, personnel (27%). port operators, freight forwarders and in Piraeus. in 2020. It should be noted, however, 3rd party logistics providers (3PLPs). that dry bulk ships registered under An outline of the Greek The world’s best-known and strongest 622 the Greek flag account merely for shipping cluster ship management companies, as cruise ship around 11% of the total bulker fleet well as operators of Greek interests, 16.5m passengers arrivals in Owing to the fact that the clear owned by Greeks. Oil tankers perform hold their offices in Piraeus. By More than 16.5m passengers used the 2019 advantages of Greece as a maritime significantly better, making up 23% looking at the registry of maritime coastal terminal of the Piraeus port in cluster are recognized by the majority of the Greek-owned vessels flying companies, a total of 3,665 maritime 201922. of the Greek shipping community, the the Greek flag. As mentioned earlier, and shipping-related companies latter has opted to establish the center Greek shipowners continue to possess were found in 2018 (up by 1.19% of its fleet management activities in the largest merchant marine fleet in compared to 2017), grouped in 28 Greece. Attica, and the port of Piraeus the world. main categories of economic activities, in particular, constitute the core of the 5.44m TEUs with the most important being 795 Greek shipping cluster. Besides being Almost 5.44m TEUs were handled at the Based on the results of EY’s 2017 “ship management and operating the traditional capital of the Greek port’s container terminals in 202023. survey with leading members of the companies” and 606 “spare parts and shipping industry, Piraeus is also a Greek shipping community, a large marine equipment” companies17. major international transshipment proportion of Greek shipowners hub and among the ten most popular had a relatively positive (38%) or Technical functions, accounting, Mediterranean cruise ports. positive (42%) perception of the commercial services, crewing, and quality of the Greek flag. However, chartering are the most frequent In 2019, the port of Piraeus handled they did not attribute great value to activities performed in Piraeus by nearly 5.65m TEUs in its container the advantages of flying the Greek the shipping companies that had terminals. In addition, over 16.5m flag, since only 13% of them believed participated in EY’s 2017 survey. By passengers used the port’s coastal that it provided them with significant leveraging its current strengths and terminal and more than 1m cruise 18. Rotterdam port H2 traffic falls by 9%, hit by COVID-19, reuters.com, 23 July 2020 competitive advantages. The survey aforementioned core advantages, passengers were recorded at its cruise 19. Hamburg sees TEU traffic plummet in 2020, porttechnology.org, 22 August 2020 20. COSCO SHIPPING Development Announces 2020 Interim Results: Stable Development with Revenue also revealed that, among the most 16 the Greek shipping cluster has the terminals . Increasing by 14.2% Y-o-Y, hellenicshippingnews.com, 1 September 2020 21. Top 15 containers ports in Europe in 2020, porteconomics.eu, 2 March 2021 15. World Shipyard Monitor, Clarksons Research, 2020 22. 2019 Annual Financial Report, Piraeus Port Authority, 21 February 2020 16. 2019 Annual Financial Report, Piraeus Port Authority, 21 February 2020 23. Top 15 containers ports in Europe in 2020, porteconomics.eu, 2 March 2021 17. Στατιστικά και Οικονομικά Στοιχεία Πλοίων και Ναυτιλιακών Εταιρειών 2018, nautilia.gr, 17 January 24. Cruise Ship and Passenger Arrivals to Greece Rise in 2019, news.gtp.gr, 8 January 2020

14 15 Being the natural maritime Greece, having the longest coastline economy, not only of Greece, but The Orient / East-Med in Europe, with an approximate length of several other EU member states Wilhelmshaven Rostock Corridor interconnecting interfaces of Europe with of 13,676 km, and an advantageous and the European Union as a whole. Bremerhaven Hamburg geographical position at the center of Moreover, 75% of vessels calling in at Berlin Greek ports with Central Asia, the Greek seaports Bremen Braunschweig the Eastern Mediterranean, is Europe’s Greek ports are carrying out intra-EU Europe are key drivers of growth natural maritime interface with the Far trips. Hannover Magdeburg The Orient / East-Med Corridor is East, via the Suez Canal. Additionally, Leipzig for both the Greek and the Pardubice part of the “Core Network Corridors“ seaports are the lifeblood of EU’s Of equal importance for the Greek Praha of the European Union. European economies. economy, since the Union is highly and the other European economies, dependent on its member states’ is the short-sea shipping of goods to Bratislava Wien Komrno As depicted in the side map, the seaports for trading with the rest of several non-EU countries in the Black Budapest corridor connects the German the world, as well as within its internal Sea and the Mediterranean. Having ports of Bremen, Hamburg, and market. an annual utilization rate ranging Rostock via the Czech Republic and between 70%-85%, Greek OEM ports Drobeta Constanța Slovakia, with a branch running In 2019, the total gross weight do not experience major capacity through Austria to Hungary and the of goods handled in EU ports was bottlenecks. All Greek OEM ports have Vidin Calafat Romanian port of Constanța, and over 3.5b – very close to the 2018 appropriate transshipment facilities then through the Bulgarian port numbers, also at 3.5b tonnes. The and relevant equipment in place, of Burgas (with a link to Turkey) to gross weight of goods handled in the facilitating their connection with the the Greek ports of Thessaloniki and main EU ports in the third quarter (Q3) national road network. In addition, the Thessaloniki Piraeus, ending up to a “Motorway of of 2019 decreased by 3.9% (880m two largest and busiest ports, those Igoumenitsa the Sea” link to Cyprus. It comprises tonnes), in comparison to the second of Piraeus and Thessaloniki, have of railways, roads, airports, ports, rail quarter (Q2) of the same year. In the state-of-the-art railway connections, Patras Athina rapid transits (RRT’s), and the Elbe past three years, a seasonal trend has supporting seamless intermodal River inland waterway. been noticed where Q3 numbers were transportation by all means of increased, compared to Q2 numbers. transport (road, rail, and maritime) Heraklion In the fourth quarter (Q4) of 2019, along the supply chain of the OEM 866m tonnes were handled in EU corridor, toward the major economic ports, marking a 3.3% decline from Q4 centers in Central Europe. of the previous year. Source: European Commission Due to the fact that the Greek ports In Q3 2019, the total volume of have recorded significant growth in goods handled in the main EU ports cargo throughput in the previous was made up of approximately 60% years, important investments of inward movement of goods. In have been planned, to ensure port comparison to Q3 2018, there was infrastructure and facilities meet new clearly a remarkable stability in the transport and logistics requirements, inward movement of goods to the and to absorb the expected growth main EU ports in Q3 2019, at 527m of cargo in the next decade. At a tonnes. At the same time, outward time of scarce public funding, funds movement suffered a decrease of from the EU – from sources such as 2.8%, falling to 353m tonnes. Inward the Common European Facility Fund movement of goods in the first quarter and the Cohesion Fund – as well (Q1) of 2019 was the lowest recorded as private sector support, through since 2008, right before the beginning public-private partnerships (PPPs) of the global economic crisis. and Concession Agreements, are critical. More than €650m have been More than 25 important commercial allocated by the Common European seaports are currently operating Facility / Cohesion Funds alone, in Greece, five of which have been to support studies or works which identified by the EU as ports of contribute to the development of strategic interest (i.e. “core ports”) necessary infrastructure for the and have been included into the Greek transportation network25. A TEN-T, as key maritime interfaces of significant part of these funds will the Orient / East-Med (OEM) corridor. be allocated to the expansion and These five Greek OEM ports are: upgrade of the Greek ports, as well as Piraeus, Heraklion, Thessaloniki, the improvement of their integration Igoumenitsa, and Patras. Supported to the OEM rail / road corridor. by other regional seaports, the five Greek core ports serve the trade and

25. European Union launches Connecting Europe Facility call worth €1.4 billion, tornosnews.gr, 19 October 2019

16 17 COSCO is aiming to exceed €7m COSCO is the third largest operator in biggest port in Europe in 2020, with All Greek ports have Gross weight of goods handled in Greek ports, per type of cargo annually in investments, after the the world by equity TEU throughput. 14.35m TEUs of traffic, followed (2018) completion of the expansion works for The Piraeus port, meanwhile, ranks by the port of Antwerp in Belgium, achieved radical growth, container traffic, and expects Piraeus 26th among the world’s 100 largest with 12m TEUs, while Germany’s with container goods 2% to evolve into one of the world’s 30 container ports, according to Lloyd’s Hamburg is third, with 8.5m TEUs. 27 largest container ports. COSCO’s List 2020 . Every week, between 16 and 18 recording the largest 12% Liquid bulk goal for 2019 was making Piraeus freight trains depart from Piraeus, growth in terms of total Containers the premier port in the European Piraeus also ranked as the fourth heading to Central and Western Dry bulk Ro-Ro Mediterranean, with a capacity of largest port among Europe’s 15 Europe. The program implementation tonnage 38% Other Cargo more than 5m containers; a goal largest ports in 2019 and 2020, and for the interconnection of China’s 19% which was indeed achieved26. In the the biggest port in the Mediterranean, and Europe’s sea and land routes has meantime, a total of 123,784m TEUs effectively skyrocketing the port started and Piraeus is expected to be were handled at COSCO’s terminals from the 96th to the 30th place, transformed into one of the world’s worldwide in 2019 - 5.5% up from the in the global ranking. The port of largest freight-forwarding centers. 117,365m TEUs recorded in 2018. Rotterdam in the Netherlands is the 29%

26. Piraeus Becomes Top Container Port in Entire Mediterranean, greece.greekreporter.com, 26 May 2020 27. Lloyd’s List One Hundred Ports 2020, Lloyd’s List, 2020

Gross weight of goods handled in the Greek ports

200,000

180,000 Other cargo Dry bulk goods 160,000 Ro-Ro Liquid bulk goods 140,000 Large containers

120,000

100,000

80,000

60,000

40,000

20,000

0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: Eurostat, EY analysis

Greece is the natural maritime hub in the Eastern Mediterranean

Greek ports are vital for the increased from €152b in 2018 to and Igoumenitsa, have been development of the EU’s “Motorways €197b in 2019. established as critical interfaces of the Sea” (MoS) concept: • Maritime intermodal transportation of Southeast Europe, since they • EU-27 international trade in goods solutions are highly favored by EU link Greece with Cyprus in the was valued at €4t in 2019, while transport policies, via initiatives to east (Limassol), with Italy in the both imports and exports were establish the trans-European MoS Adriatic Sea, and with other non- higher compared to 2018. network. European countries in the Eastern Mediterranean and the Black Sea. • EU-27 exports grew more than • The Greek ports of Piraeus, its imports, and the trade surplus Thessaloniki, Heraklion, Patras,

18 19 The core Greek ports are key maritime interfaces of the Trans-European Orient / East Mediterranean Corridor Passengers at the Thessaloniki port per year

164 158 Piraeus port Thessaloniki port 150 • Piraeus is the largest Greek seaport • The port of Thessaloniki is one Partners GmbH” fund, the “Terminal 130 and the country’s main international of the strongest Greek ports. It is Link SAS” container terminal commercial port. a transshipment container port, management company, and “Belterra 30 101 • It is the natural gateway to Europe specializing mainly in dry cargo. Investments Ltd.” . in the Eastern Mediterranean • Thessaloniki constitutes the primary The new majority shareholder 70 region and has emerged as a major entry port for Northern Greece and acquired the management of 65 maritime hub for Europe, linking acts as an international logistics major port infrastructure and 51 50 48 45 44 Greece and the EU to Far Eastern and hub for all Balkan countries. The superstructure, which include, among Middle Eastern markets. port attracts both grouped and others, 6,200 meters of quay and 26 1.55m square meters of terrestrial • The Piraeus port is specialized in conventional cargo traffic. 6 spaces, warehouses, offices, etc. It is container traffic; having an annual • The port’s annual handling of also worth noting that the available handling capacity of over 7.5m TEUs, container traffic is in the range of 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 cash and cash equivalents of OLTH, the port of Piraeus ranked fourth 0.5m TEUs. However, an expansion at the close of financial year 2017, Thousand passengers among all European ports in 2019 of the container terminal is planned, amounted to €81m. and 2020, in terms of total container which will increase its capacity to throughput, and is first among the 1.3m TEUs. Right now, there are The shares’ sale agreement also TEUs at the Thessaloniki port per year Mediterranean’s commercial ports, seven companies and consortia stipulates that the new owner pay surpassing Valencia and Algeciras, interested in undertaking the 131 69 3.5% of the company’s turnover to the 95 according to Lloyd’s List Top 100 extension of the Thessaloniki port’s Greek State, an amount that may not 96 Global Ports. sixth pier, which will reportedly cost be less than €1.8m. SEGT undertook around €120m29. • With the port’s current capacity mandatory investments of €180m: an 83 87 87 81 379 utilization exceeding 80%, and • The master plan, prepared in 2017 investment of €130m is planned for 85 78 following its privatization in 2016, and approved by the European 75 329 the expansion of container terminal 312 74 64 305 new investments in infrastructure Commission, sets clear short- pier 6, an investment of €30m for the 53 are in place, with COSCO planning and medium-term priorities for modernization of the cargo handling 262 264 263 255 244 to expand pier 3 and build a fourth the development and upgrade equipment, at both the container and 233 209 220 pier. Planned investments of €300m of Thessaloniki to a middle the conventional cargo terminals, in the next two years are expected to category European port; the main 196 and an extra €20m investment for 186 increase port capacity to more than developmental actions aim at raising the restoration of the passenger 28 10m TEUs . the capacity of cargo terminals, as terminal building and for general port well as upgrading the sea cruise development31. facilities and transit services capabilities to handle 150,000 For its part, the Greek State has passengers annually. This is expected undertaken to invest in projects that 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 to be completed by mid-2023. increase the port’s connectivity. The Empty (thousand/year) Filled (thousand/year) contract also contains provisions for Furthermore, the transfer of 67% of the minimum guaranteed profitability the Thessaloniki Port Authority (OLTH) of the port of Thessaloniki under the Conventional load at Thessaloniki port per year (million tonnes of general and bulk cargo) shares to a new owner, took place new ownership regime. Conditions on 23 March 2018. This marked the for minimum container traffic and 4.95 end of a 13-year long privatization contractual cargo are provided on an 4.82 process for Greece’s second largest annual basis, throughout the term 4.44 4.40 4.31 4.35 4.20 4.20 4.05 port. The new majority owner is the of the contract. Moreover, there are 3.89 3.75 Cyprus-based “South Europe Gateway conditions that refer to minimum 3.53 3.51 3.56 Thessaloniki Ltd.” (SEGT) consortium, levels of productivity in the handling comprised of three companies: the of containers, conventional cargo and German “Deutsche Invest Equity cruise passengers32.

28. Cosco Plans new Pier to expand Piraeus capacity to over 10m TEU, seatrade-maritime.com, 15 August 2019 29. Transforming Thessaloniki Port into a Regional Transport Hub, greeceinvestorguide.com, 21 February 2020 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 30. GREPORT2018: Report on Greek ports, porteconomics.eu, 3 June 2018 31. Supply Chain and Logistics Magazine Issue 95, o.mind creatives, 12 June 2018 Source: Thessaloniki Port Authority (OLTH) 32. GREPORT2018: Report on Greek ports, porteconomics.eu, 3 June 2018

20 21 Alexandroupolis port Patras port The port of Alexandroupolis, along Igoumenitsa and Corfu in Western • Passenger traffic is divided into the Loads and operation • The port of Patras plays an all- of increasing the calls to three, with the port of Kavala, are high Greece, are leading candidates. These international ferry terminal (new • International passenger and vehicle important role in the economic life for each direction. The purpose on the Hellenic Republic Asset ports undoubtedly have a strong role phase A and phase B projects) and traffic volumes have recovered after of the city, and Western Greece in of these intermediate stops at the Development Fund’s (HRADF) agenda; to play in upgrading the country’s the domestic terminal for passenger the economic crisis, and provide a general. Patras port en route to Trieste, is in fact, after legislation proposed by infrastructure and, taken together with carriers (i.e. the docks of the old solid basis for profitable operations. • It is mainly a passenger port which the transshipment of consignments the Ministry of Shipping and Island the rail and road transport complex port). The loading and unloading of handles a significant part of the from Turkey destined to the Italian Policy was adopted by the Greek that has also been developed, Greece • There are 17 ramps in the new port passenger ferries is mostly carried total passenger sea traffic between ports south of Trieste (i.e. Brindisi, Parliament, the privatization of the is gradually becoming a transport and of Igoumenitsa and eight in the old out by liner staff. Added value Greece and other countries. Bari, Ancona, Venice), which will be port of Alexandroupolis is underway commerce gateway to Europe. port. is generated by the provision of • As a commercial port, Patras served from existing lines of other and, in October of 2020, the HRADF connects Greece with the Italian companies from the port of Patras, as • The port of Igoumenitsa sits at the services to freight vehicles and announced that four interested ports in the Adriatic Sea via Ro-Ro well as from the unloading of cargo Igoumenitsa port starting point of the Egnatia Odos the operation of the international parties have submitted an expression services, which then continue up to for the domestic market. Conversely, The port of Igoumenitsa is located motorway and is, therefore, a vital passenger terminal. of interest for the acquisition of a Central Europe. ships that return from Trieste with a in Northwestern Greece, and, in gateway to both Greece and Europe, • Short-sea shipping to Corfu and the majority stake of at least 67% of the direction to Istanbul, will be loading particular, in the Epirus region: through passenger / ferry services. other Ionian Islands is self-sufficient Alexandroupolis Port Authority33. The port of Patras will be a stopover cargo arriving to Patras from the and will not benefit from the • The port of Igoumenitsa is one of • The creation of a marina has been on the Istanbul-Trieste route and vice aforementioned Italian ports, as well concession, since the added value of The concession of the Port Authority the largest roll-on / roll-off (Ro- introduced into the port’s master versa, to be utilized by the ships of as cargo from the domestic market this activity is very low. of Alexandroupolis (OLA) will cover Ro) international transport ports, plan, while its location has been the “U.N. RO-RO” shipping company, destined for Turkey and other eastern the use and exploitation of the both in Greece and in the Eastern approved by the authorities. • Cruise ship traffic is still low, as there based in Istanbul. This company was countries. eastern part of the harbor, namely the Mediterranean. • The design of a logistics center is limited ability to navigate cruise acquired by one of Europe’s largest container ships’ berth, the container • Millions of tonnes of goods are 17 km away from the port, within ships calling in for religious and supply chain companies, the Danish The Patras port supports and terminal (SEMPO) and the large 400 transported annually from the port walking distance of the village of cultural tourism purposes. “DFDS”, which dominates the North reinforces the efforts of the Port acres area located in the eastern by international transport trucks, Grikas, in an area of approximately Sea trade routes and has an extensive Authority of Patras (OLPA), in line part of the harbor. It is worth noting serving Northern Greece, the 890,300m2, is planned by the Port Key obstacles combined transport network across with its strategic plan to make the that the container ships’ berth has a Southern Balkans (mostly Bulgaria Authority of Igoumenitsa, to add • The profitability of the Port Authority Europe. port a strong intermodal transport draught of 12 meters. and Turkey), as well as some Middle further value to port operations. of Igoumenitsa will be significantly hub of the Central Trans-European Eastern countries. reduced if the international Ships will be calling in four times at Network, and an interconnection link The port of Alexandroupolis, which is • It is located at an important road Infrastructure terminal is added to the concession the Patras port on a weekly basis, between the two major axes crossing linked to the national railway network, junction, where the Egnatia Odos • Following the completion of the agreement. The loss of dividends as planned; two to each direction (to Italy: the East Mediterranean and the serves only conventional cargo to and Ionia Odos motorways converge. second phase of the port extension would be offset by concession fees. and from Trieste), with the prospect Scandinavian corridors. date, as it lacks container loading and • The port is currently managed by the project (phase B), the domestic • The concession holder must handling equipment, and still does not Port Authority of Igoumenitsa until and international passenger maintain a level playing field for all 34 Komotini feature a Free Zone . 2042, under a concession agreement ferry terminals will be completely international shipping companies. with the Greek Government. separated and will have sufficient However, over the past two years, Technical Assessment • The port is located at a naturally mooring and terminal capacity. Kavala Alexandroupolis many individuals have expressed their port protected area, in the bay of • Phase B of the port extension project • The general condition interest regarding OLA, while interest Kozani Thessaloniki port Igoumenitsa. The gulf is oriented that includes the completion of the of the port is good. by an American company in Gastrade’s to the West, which is also the dock and of the second passenger Ioannina LNG floating station has increased • 17 ramps for Ro-Ro ships only source of wave activity. As a terminal has mostly been completed, are available at the existing not only the port’s value, but also the Corfu port result, there is no port protection while phase C that includes the value of the city of Alexandroupolis facilities of the new port. Larissa infrastructure, due to the natural docks, is expected to be completed and of the wider area as well. • Eight ramps for Ro-Ro / open Volos port during 2021. This extension project Igoumenitsa protection provided by the area. passenger ferries are available at will increase the port’s capacity by port Alexandroupolis has excellent • The jurisdiction of the Port Authority the premises of the old port. contributing to the development of Lamia potential to develop into a commercial of Igoumenitsa covers the main • Four extra ramps will be created both passenger ferry and cruise liner Astakos port cargo / bulk cargo logistics port within the urban limits of during phase C of the port’s Igoumenitsa (for passenger use), the activity. management center, while it is also fit extension project. Patras port for the construction of shipbuilding fishing units of Plataria and Sagiada • The exceptional road access • Passenger terminal buildings are in Piraeus port (applications for whose conversions and connectivity to the Egnatia and ship-repairing shipyards and a a good condition. marina. into yacht shelters have been filed), Odos motorway strengthens the Tripoli as well as the recreation crafts unit competitive position of the port of • Port security procedures have been effectively implemented. Regarding the country’s 10 regional in Sivota (which has been designed Igoumenitsa as a passenger ferry ports, the government will likely from the beginning as a recreation hub. • The port bumpers, which were Kalamata review the current legal framework, boat shelter, but has not yet been • Connection to the railway is unlikely built during the first phase of the to provide flexibility and added value. granted a permit). to be completed in the near future, port works, are obsolete and in On the basis of previous studies, the • The port serves exclusively passenger as it is not covered by the suggested bad condition (due to the corroded harbors of Alexandroupolis and Kavala traffic through passenger ferries, concession plan. metallic material and high-density in Northern Greece and the ports of including limited cruise ship activity. polyethylene). • Phase C will enhance the capacity Chania 33. U.S. developing interest in Alexandroupolis port, portseurope.com, 5 February 2018 of the port, particularly at truck 34. Free Zones are special areas, usually near ports or airports, reserved for the storage of imported goods under beneficial customs conditions. When goods are Heraklion held in a Free Zone, import duty, VAT and excise duties are suspended on goods imported from outside the European Union, until they are released into free level. circulation, used or consumed within the Free Zone.

22 23 Corfu port Volos port Overview of the port • Off-harbor traffic has improved, passage and as a starting point for Overview of the port these levels of activity or develop • It is necessary to immediately rebuild • The port is located at the east coast but still passes through the town of ships. • The port of Volos, located in the even further. The mountain ranges the completely damaged concrete of the island of Corfu, which belongs Corfu. Pagasetic Gulf, is the only important of Meteora and Pelion are the main surfaces and the rail in platform 10 to the Ionian Islands group. Technical assessment port of Thessaly. tourist attractions in the area, thus used for scrap management Passengers and operation creating a need for modern cruise in pier 1, as environmental issues • It is managed by the Port Authority of • A platform of more than 1,500 • It is managed by the Port Authority of ship installations, but existing docks have arisen from scrap residues, in Corfu until 2042, under a concession • The International Ship and Port meters is available for the docking Volos, under a concession agreement do not have the necessary length. addition to operational issues. agreement with the Greek State. Facility Security Codes, as well of cruise ships (up to 300 meters in with the Greek State until 2042. as security control and traffic length). Converting the former grain silo in • A significant proportion of port • The port mainly serves passenger • The port’s location is considered management procedures, are pier 1 to a cruise terminal, could be management equipment is not services via Ro-Ro, cruise ships, • A platform of more than 2,000 strategic, as it sits at the center of implemented very efficiently. an interesting alternative. operational and needs to be repaired hydrofoils, high-speed boats, open- meters, with a docking space of more the Greek mainland, 330 km north • Recreational boat tourism in the or removed from the piers. air passenger, and day-trip boats. • International routes to / from Italy than 1,000 meters for passenger of Athens and 215 km south of do not interfere significantly with ships (e.g. passenger ferries, wider area requires better facilities, • The types of bumpers that have • The Corfu port is interconnected with Thessaloniki. cruise ship traffic, as arrivals and seaplanes, open-type passenger as there is no marina offering full been installed in most docks are both domestic (e.g. Igoumenitsa and • The port’s facilities are deployed departures are scheduled mainly in ferries), serving the coastal routes services between Thessaloniki obsolete and no longer appropriate Paxos Island) and international ports, along the city, with several urban the afternoons, when cruise ships to the ports of Igoumenitsa and of and Athens. Three locations were for docked vessels, thus their gradual such as Bari, Brindisi, Venice, and buildings located within the port. have already departed. Paxos Island. considered for the establishment of replacement is required. Ancona. • Volos’s port serves multiple a marina in the 2015 master plan; • As Albanian coastal shipping is • At least seven stern and side docks • It is suggested that the large fishing • The construction of the various activities, namely commercial (bulk however, no choice has yet been growing rapidly posing some logistics are currently available for activity of vessels for professional use currently port areas has been planned in and bulk cargo), passenger (coastal made. challenges, a separate terminal equal size. docked at platforms 6A, 7A, and successive phases, with a significant and cruise), as well as tourist and would help improve the situation. 7B, be transferred from the front development being the extension of • Rehabilitation works are required for fishing activities. Key obstacles and solutions the majority of the old port’s docks. side of the city, either to different the main port of the harbor by 430 • The port is connected to the Proximity to the city of Volos is a Key obstacles Concrete surfaces are currently in parts of the port or to a new smaller, meters. Patras-Athens-Thessaloniki-Evzoni problem, as dust and noise raise • Mixing passengers outside the poor condition, as the concrete is complementary marina. • All passenger activities are served motorway (PATHE - E75), through complaints from citizens and can lead Schengen Area (e.g. routes to washed-out. • If fishing activity is transferred to through the port’s internal facilities, the Volos-Velestino national road, to restrictions on port working hours. Albania) with cruise passengers. a different part of the port, then a while cruise ships are docked along • The recently completed main pier while it is also accessible via the The concentration of passenger, cruise tourist shelter or a small marina can the main pier toward the west-east • The recent expansion of the main extension is of a small width (12 city’s center. and marina activities on the east cruise ship pier does not have meters), creating difficulties when be created at the entrance of the direction. The length of the pier is • The port is also connected to the side, and freight management on the enough width to simultaneously passengers disembark from cruise city, something which will create approximately 770 meters, while the national rail network via constructed west side, would be a reasonable and accommodate the disembarkation of ships on both sides at the same added value for both the city and the mooring of cruise ships takes place railways, but no rail transport has desirable option. However, even in passengers to both sides. Although time. The existing width prohibits port. on both sides, with the possibility of been scheduled or executed for over this case, cargo handling at the future this situation is rare, additional buses from picking up passengers, • The current passenger terminal serving four cruise ships at the main a decade. This is mainly because the multipurpose terminal should include problems may occur during peak since there is no room for them to building on the central dock is pier docks. port’s connection via rail requires measures to reduce its environmental periods, with the simultaneous arrival maneuver. There will probably be a practically out of use; therefore, it • Based on the available depth of the interrupting city traffic. impact (i.e. dust, noise, and light of many cruise ships, as the option of need for widening the pier to make pollution). This proposed potential is necessary to examine alternative main mooring docks, cruise ships up • The existing port area is 676,695m2, splitting arrivals during the week for adequate maneuvering room for relocation will require a modification options for its re-operation, if to 300 meters long can be docked. with concentration of cargo decongestion is not available. buses, in the future. of the plan. possible. • Facilities for passenger services management at two terminals. • The old passenger terminal requires • The existing location for cruise and accommodation have been • The basin between pier 2 and pier Revenue is based on the following major renovation. • The general plan provides for the ship activities and the respective constructed within the port area. 3 needs to be excavated, partially traffic forecasts: creation of a terminal dedicated to passenger terminal, are considered More specifically, the old terminal removing contaminated soil from • Existing cruise ship volumes – the import of scrap, which could be inappropriate. passenger station (1,644m2), the the seabed. Targeted works on the 630,000 passengers on average transferred to pier 3 (one dock – 250 new terminal passenger station adjacent rivers – which are already • The three cranes in platform 10 and in recent years, including 70,000 meters). (3,762m2), the duty-free building necessary to address the city’s flood one of the two cranes in platform 8, passengers leaving from Corfu port. • The plan also provides for the (214m2), the customs building problems – could help resolve the are out of order. creation of a multi-purpose dry (1,100m2), and the exclusive for • The current tax per passenger is port’s sediment problems. • The 15,000m2 capacity silo bulk (grain / fertilizer), steel / cruise passengers home passenger low compared to Mediterranean • Reduced wave activity and existing installation has been out of use since general cargo, liquid bulk cargo, terminal station (1,000m2). standards, and there may be a protection infrastructure (i.e. the 2012. and container terminal. Subject to possibility for an increase. This has main dock and existing breakwater) proper organization and the use Infrastructure been taken into account in earnings ensure the safe operation of existing estimates, in both the basic and high of appropriate equipment, these • With the completion of the current facilities and goods management. scenarios for the concession. could be served by pier 2. Container port extension for domestic volumes are significantly low, not • Connectivity between the national • In the basic scenario for the passenger ferries, the port will have necessitating a separate container rail network and existing railways concession, the growth target will sufficient dock and terminal space terminal at pier 2. within the port (pier 1), will enhance for both cruise ships and passenger be 840,000 passengers, including the port’s dynamics by creating 140,000 passengers leaving from ferry activities. Other port functions new prospects of combined freight Corfu port. transport in Greece, and could be a • Its proximity to the Corfu airport • Cruise activity in Volos used to be • There are good trade prospects and competitive advantage for Volos, as (3.5 km) is an advantage for the important before the beginning of potential for the development of the majority of domestic ports do not development of the port as a starting the recession in Turkey (60 arrivals/ the cruise ship section – both as a have this option. point for cruise ships. year) and is expected to return to

24 25 Following the privatization New growth potential after the privatization of the Piraeus Evolution of container throughput in the Piraeus port (1,000 TEUs, 2006-2020) of the port of Piraeus, port Containerized traffic in Greek ports port, to transport their products to Annual Difference Total throughout Greece recorded increased by more than 5.5 times, in Central Europe. Piraeus’s performance substantial growth in terms of total tonnes of goods handled is expected to further improve in the 120% 6,000 between 2009 and 201835. This immediate future, as a result of the 100% container traffic, attracting growth is attributed to the outstanding privatization of the port that took 5,000 significant shares of the growth of container throughput place in 2016. 80% in the port of Piraeus, following 60% West-East seaborne trade. the beginning of the concession COSCO, which is now the owner of 4,000 agreement with COSCO in 2009. In the port, will put in place more than 40% fact, the port of Piraeus dominates €600m worth of investments within 20% 3,000 the Greek container market, serving the next years, planning to help the 0% 86% of the total container throughput port capture the first place among 2,000 in Greek ports, followed by the port commercial ports in Europe. In order -20% 36 of Thessaloniki . Three other Greek to do so, they are planning to boost -40% ports also handle a small number of its operations, including mandatory 1,000 containers. investments of €300m by the end -60% of 2022, allowing COSCO to acquire -80% 0 Piraeus’s growth in container an extra 16% stake of the company. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 throughput has been outstanding COSCO is also targeting to increase in the last 10 years. Since COSCO the port’s capacity to more than 10m Source: Piraeus Port Authority S.A. (OLP) started operating and managing pier TEUs per year37,38. 2 of the Piraeus container terminal in 2008 − and later constructed and In addition, the port owner is investing operated pier 3 (that is currently being in new logistics facilities within • Piraeus lost half of its traffic during the 2008-2010 period, mainly due to poor operating conditions and expanded) − the port has achieved the port, and in achieving better business management inefficiencies. substantial growth. Between 2008 – integration with the railway and road • In 2009, COSCO was awarded the concession agreement to manage and operate pier 2 and pier 3 of the when the port recorded the weakest networks, aiming to remove any Piraeus container terminal, for 35 years. On the other hand, pier 1 remained under the management of the performance in its known history – existing bottlenecks, and transform Piraeus Port Authority. and 2018, Piraeus increased its the port of Piraeus to a state-of- • The concession agreement with COSCO for the operation of pier 2 has changed the picture; from 2011 to container traffic more than 11 times. the-art logistics hub, connecting 2019, Piraeus’ throughput has more than tripled. When compared to 2006, Piraeus Asian and European trade. COSCO port shows an impressive 10.4% promotes new synergies with railway compound annual growth rate (CAGR). undertakings, major shipping lines, The situation at the other Greek ports and leading logistics providers in remains stable, despite Piraeus’s port Greece and abroad, in order to growth the previous years. improve the Greek hinterland and develop new and reliable intermodal In 2015, the port’s rail connection logistics solutions toward Central to the Thriasio Pedio freight center Europe. To this end, COSCO is in close and the TEN-T European Orient- cooperation with the Greek State East Mediterranean Corridor was and the relevant stakeholders, to completed, thus increasing its support the alleviation of intermodal intermodal capacity. COSCO took bottlenecks across the entire national advantage of this opportunity by railway network, aiming, in particular, developing competitive and reliable at enhancing interoperability among end-to-end intermodal transportation the different modes of transportation, solutions for Central Europe. In improving cross-border railway links, cooperation with TRAINOSE – the and increasing the reliability of the Greek railway undertaking – railway system. multinational companies such as HP, Sony and Huawei are currently using approximately 15-20 block trains per month, in direct connection to Piraeus

35. Top 20 ports - volume (in TEUs) of containers handled in each port, by loading status (main ports), Eurostat, 22 February 2020 – EY analysis 36. Country level - volume (in TEUs) of containers handled in main ports, by loading status, Eurostat, 22 February 2020 – EY analysis 37. «Στόχος της Cosco η συνεχής ανάπτυξη του ΟΛΠ», Kathimerini.gr, 16 September 2019 38. China, Greece agree to push ahead with COSCO’s Piraeus port investment, reuters.com, 11 November 2019

26 27 COSCO’s vision to turn China’s 21st Century Maritime which is part of China’s Belt and Road (B&R) initiative, will highly influence Piraeus into the south gate Silk Road initiative brings new investment plans and the global containerized trade market. to Europe, is transforming More than US$250b have been growth opportunities for allocated to the B&R initiative, out of Greece into a leading Piraeus which, US$40b are for developing and international transit hub More than 10 years ago, COSCO − securing maritime hubs, inter-oceanic China’s shipping giant, the third channels, and trading links for the for products and services largest container shipping and second MSR initiative. Although the impact in the West-East trade largest port operator in the world39 – of the new Silk Road project cannot realized the benefits of Greece as be thoroughly calculated, the scale of route. a maritime and logistics center, by the initiative and the economic figures investing in the port of Piraeus. In involved are expected to reshape the October 2009, COSCO was awarded trade between Europe and Asia, thus the concession agreement to start creating new opportunities for Greece. managing and operating pier 2 and pier 3 of the Piraeus container The port of Piraeus has been terminal. From that year onward, recognized early in the process as port growth in container traffic has a major maritime link in the West- been impressive, with Piraeus being East inter-oceanic corridor, and one of the most rapidly growing ports COSCO has already invested heavily in Europe, becoming the largest in developing Piraeus as a major commercial port in the Mediterranean, European transshipment port. Since and the fourth largest among all Piraeus constitutes a key maritime European ports for 2019 and 2020, in interface on the MSR corridor, COSCO terms of total container throughput. is increasing its investment in the port, aiming to secure Piraeus’s role as the This growth has been mainly the south gate to Europe by enhancing result of COSCO’s investments in port capacity, optimizing performance, either developing new infrastructure, and improving the port’s links with machinery, and equipment, or railways, motorways, the Athens upgrading existing ones, as well as International Airport, and other in improving port operations and regional ports. securing maritime freight in the West- East trade corridor. The provision Important investments regarding the of the port’s terminal services was expansion of the Piraeus port and reorganized in line with the latest the development of new facilities standards, and significant investments have been planned by COSCO and have been made in upgrading the are to be initiated soon, in order to pier 2 terminal and constructing a increase port capacity and improve new pier 3 at the Piraeus container performance. A €300m investment terminal. However, this was only the project within the next two years first step in the port’s development. has been agreed with the Greek There are newly planned and on- State, following the privatization of going investment projects in place the port. The expansion works in for Piraeus, that will further boost pier 3’s western part are planned the port’s role as the primary seaport to be completed, expanding the hub in the Mediterranean, including port’s capacity to 7.5m TEUs per repairs in pier 1 and the underground year, making Piraeus the largest connection with the car terminal. port in terminal capacity in the Mediterranean, while pier 4 is The completion of the 21st Century expected to add another 2.8m Maritime Silk Road (MSR) initiative, TEUs40,41.

39. China COSCO Shipping Group Profile, coscoshipping.com, 2020 40. Cosco to expand Piraeus port by building fourth pier, ekathimerini.com, 13 August 2019 41. China, Greece agree to push ahead with COSCO’s Piraeus port investment, reuters.com, 11 November 2019

28 Major privatization The Greek port industry has • The 50-year concession agreement undergone important structural for the development of the Thriasio projects and public-private changes within the last 20 years, Pedio freight center, in a plot of 600 Viewpoint Perikles Nicolaou partnerships are key as a result of a continuous port acres near the port of Piraeus, which CEO, GAIAOSE S.A. privatization reform process initiated was awarded in 2016 to the winning drivers in improving the by the Greek state in the early venture of ETVA VIPE and Goldair. competitiveness of Greece 2000s. The role of the Greek state • The ongoing international call for in the operation and organization of tenders concerning the development as the south logistics the ports is gradually reduced as a of the Gonos logistics center in a gateway for Europe. means to attract private investment, warehouse area of 672,000m2, near improve port competitiveness, and the Thessaloniki port, suitable for Q. What are your plans for the development of intermodal transport and logistics knots? Is there a optimize commercial activities. This storing containers, swap bodies, dry prospect for Greece to become an international freight center? reform process has highly transformed bulk cargoes, and fresh produce. the organizational structure and GAIAOSE S.A. had originally A. GAIAOSE S.A. has plans to develop logistics centers of the plot 672.000m2) of the former Gonos Camp, operational model of the major Greek announced the international tender through concession agreements in two regions; in to an intermodal transport center, along with other port of Piraeus and significantly for the creation of a freight center Attica and Thessaloniki. complementary activities. As in the TLC case, this affected the country’s second largest at the former Gonos military camp project is also enjoying unique advantages, such port, that of Thessaloniki. in Thessaloniki, with the prospect of In Attica, the Thriasio Logistics Center (TLC), is as closeness to the Thessaloniki port (8 km), and submitting bids by the end of July expected to be the core of intermodal transport multiple transport, railway, and truck capabilities. As a result of the Greek fiscal 2018 and works to begin around in Greece in the near future, given its vicinity to adjustment program that was agreed mid-201942. Despite the initial the Piraeus port, as well as the fact that multiple Overall, Greece, by its location, has a unique with the Troika (the European timeline, there have been some modes of freight transport (railway, vehicles) can be positioning in becoming an international freight Commission, the International delays in the bidding process with employed. The size of the TLC plot is 588,000m2 center, connecting the Mediterranean Sea with Monetary Fund, and the European the project of establishing a freight and is expected to host about 240,000m2 of Central Europe; the TLC and Gonos projects of Central Bank), and a decision by center at the former Gonos military warehouses. GAIAOSE will play a pivotal part in this. When the Thriasio Pedio logistics HRADF – which owns the shares of the camp currently being frozen43. center will be fully developed, it will Greek ports – the tendering process • The Greek railway undertaking, be one of the largest dry ports in for the sale of 67% of the shares of With regards to the Thessaloniki region, GAIAOSE is TRAINOSE, has recently been Southeast Europe Piraeus Port Authority S.A., was planning to develop part of or the whole plot (area privatized, after the sale of the initiated in 2014 and was completed in company’s total shares to Ferrovie 2016, with COSCO Group Ltd. as the Intermodal logistics center dello Stato Italiane S.p.A., for a total preferred investor. Moreover, a similar An area of 600 acres, suitable for of €45m. the construction of 240,000 m2 of tendering process for the sale of 67% • The concession agreement for logistics buildings of the shares of the Thessaloniki Port Authority has been completed. the right to operate, maintain, and commercially exploit the fully 600 acres constructed Egnatia Odos motorway land plot Further to the above, the Greek State holds a portfolio of 10 additional ports and its three vertical axes, is in 2 and is in the process of evaluating process. 240,000m the most appropriate approach for logistics buildings their reform and development. It should be noted, however, that the Intermodal Terminal privatization program is not limited Railway yard area of 145 acres to the ports. Several state-owned with intermodal and cross-docking assets concerning rail, road transport, facilities and logistics, have attracted global investors’ interest through the public 145 acres assets privatization and development terminal station, railheads and program run by HRADF. The most intermodal yard important privatizations and public- private partnerships (PPPs) in the logistics sector in Greece, are:

Photo credits: ΓΙΑΝΝΗΣ ΜΑΓΑΛΙΟΣ (from the «Τρένο και Κίνηση» photography contest) 42. Προκηρύχθηκε ο διεθνής διαγωνισμός για τη δημιουργία του Εμπορευματικού Κέντρου στο πρώην στρατόπεδο Γκόνου στην Θεσσαλονίκη, supply-chain.gr, 2 November 2019 43. Φρένο στο διαγωνισμό της ΓΑΙΑΟΣΕ για το Στρατόπεδο Γκόνου, προχωρά το Θριάσιο 1, tourismtoday.gr, 22 October 2019

30 31 The privatization of In April 2016, COSCO Group Ltd. was of Alexandroupolis, in addition to According to the Thessaloniki Port COVID-19’s impact on the shipping market selected as the preferred investor for nine other regional ports, which are Authority, 2019 revenues totaled the two largest Greek the Piraeus Port Authority, with the currently fully owned by the Greek €68.9m44 and €52.7m in the first Per the World Bank, the global GDP for 2020 suffered a reduction of ports reinforces their total value of the agreement estimated State. three quarters of 2020, marking 4.3%, based on COVID-19’s impact48. This contrasts with the initial at €6.5b, including €368.5m for the a total increase of 6.5% between prediction of 3.3% growth, showing that the pandemic’s impact is 45 international status. 67% majority stake in the Piraeus OLTH reported a 10-year record in 9M/2019 and 9M/2020 . It is deeper than that of the last global financial crisis. Comparatively, port and a mandatory investment container traffic in 2017, as well as important to note that OLTH’s major global GDP declined by 2.5% from Q4 2008 through Q3 2009. amounting to €300m over the next the second highest performance in clients are key players of world Additionally, Q2 2020 marked the highest point of COVID-19’s two years. HRADF and COSCO signed the last 21 years. Following an upward trade. The average size of the Ocean economic impact. The privatization process the agreement on 8 April 2016, trend, the number of containers Alliance-operated container ships for the sale of 67% of the while the concession was ratified by increased in 2019, reaching 448,000 calling in at the port of Thessaloniki is the Greek Parliament in July 2016. TEUs (compared to 424,000 TEUs in 1,571 TEUs, and the respective size There was also a significant impact on the 11.9b tonnes of seaborne Piraeus Port Authority The acquisition of 51% of the Piraeus the previous year), while conventional for the 2M Alliance-operated ships is trade, which fell by around 10.9% on a year-on-year (YOY) basis in May shares, was completed in Port Authority stakes was formally cargo registered 4.47m tonnes 2,416 TEUs. 2020. By August, this decline had started to contract, reaching a total completed in August 2016. of general and bulk cargo, with YOY decline of -5.5% for the first nine months of the year. Indicatively, April 2016, with COSCO increases of 6% and 19% respectively, With the Thessaloniki port being a key total container throughput in the top 15 ports in Europe, fell by 2.8% in The privatization of one of Greece’s in comparison to 2018. Despite the role player in the regional maritime Group Ltd. as the preferred 2020, to 76.8m TEUs. biggest seaports, the port of COVID-19 crisis, OLTH managed to container market, well connected to investor. Thessaloniki, has also been finalized marginally increase its throughput transshipment hubs in both Greece through a €1.1b deal. The port’s during the first nine months of 2020 and Turkey, and heavily serving feeder In terms of deep-sea cargo, a 5% YOY decline was recorded in August privatization – which was ratified by (9M/2020), with a 2% increase, services from / to Piraeus, its global 2020. Again, it appears that this declining trend bottomed-out in May, the Greek Parliament – was finalized from 328,000 TEUs in 9M/2019 to role is being widely upgraded46,47. when it reached -9.9% YOY, and has been since trending upwards. In addition, the with the port’s sale to a consortium 335,000 TEUs in 9M/2020. of Russian-Greek, German and French Recommendations In other trading blocs, activity fell across Q2 2020, but latest data privatization of Greece’s enterprises. The disposal of port In 2019, transit operations grew by • The port of Thessaloniki should shows tentative signs of it being stabilized or even picking up. operator Thessaloniki Port Authority 14% and Greek container exports second largest port, be connected with the PATHE and European port call activity fell by 11% YOY in June, US activity fell by constitutes a combined share sale and rose by 5.7%. Cargo traffic totaled Thessaloniki, has also Egnatia Odos motorways. 16% – but is now trending upwards – and activity in Japan fell by 18% concession arrangement, which was 4,469,000 tonnes of compatible YOY, respectively. If other shipping segments more heavily impacted agreed under the terms of Greece’s cargo in 2019, from 3,756,000 in • The investment in the port of been completed, with the by the disruption caused by COVID-19 are to be included (e.g. cruise international bailout program and 2018 (an increase of 19%), while the Thessaloniki’s pier 6 should proceed, and ferry), then a deeper decline in port activity (-18.9% YOY in May) is “South Europe Gateway took approximately three years to number of ships that docked in the for it to be able to accommodate Thessaloniki” venture complete. 67% of OLTH was acquired port of Thessaloniki decreased by 5%, large freight vessels. observed, but there is also a more pronounced recent uptick (-15.7% in by Deutsche Invest Equity Partners to 1,347 (from 1,404 in 2018), of • The extension of the gate / June). Global ferry activity was down by almost 45% YOY in April, and emerging as the new GmbH, Belterra Investments Ltd., which 463 were container ships, 832 hinterland logistics site close to pier by almost 35% YOY in June 2020. majority stakeholder. and Terminal Link SAS, with the cargo ships, and 52 passenger ships. 6 should be promoted. companies agreeing to invest over Compatible cargo was significantly • Pier 6 and the extended gate / €650m in upgrading the port’s affected in the first nine months hinterland logistics site should be facilities over the 34-year concession of 2020, with a 12.6% reduction connected via rail. timeframe. HRADF is now proceeding compared to the tonnes of the similar • A Free Trade Zone to support export- with the privatization of the port period of 2019. oriented enterprises should be established. This zone can be merged with the extended gate/ hinterland logistics site. • The creation of a strong supply chain / logistics eco-system of service providers should be promoted. • Thessaloniki should be branded and marketized as an international freight center/ logistics hub at all major international transport exhibitions.

44. ΟΛΘ statistics 2019, thpa.gr, 2019 45. ΟΛΘ: Αύξηση εσόδων 6,5% στο εννεάμηνο - Στα 21,6 εκατ. τα EBITDA, capital.gr, 11 December 2020 46. Supply Chain and Logistics Magazine issue 102, o.mind creatives, 15 May 2019 47. Thessaloniki Port sees increased traffic in 2019, 48. Global GDP growth in 2021 could be limited to 1.6% on vaccine delay – World Bank, spglobal.com, 5 portseurope.com, 9 January 2020 January 2021

32 33 Viewpoint Thanasis Ziliaskopoulos Chair, Hellenic National Logistics Council

Q. What is the vision of the Hellenic chain, simplification of the licensing process for National Council for the Development and logistics installations, and incentives for the land Competitiveness of the Supply Chain, for acquisition and development of logistics parks of Greece as an international freight center? global interest, as well as for the reorganization of A. The mission of the Hellenic National Council for the areas with high concentration of logistics activities Development and Competitiveness of the Supply (e.g. in Aspropyrgos, Boeotia, and Kallochori). Chain (the Council) is to support the Government of Greece to formulate a strategic vision and identify The Council aims to support the government in these the actions in supporting the strategic objectives initiatives and undertake actions to promote the adopted. Greek logistics industry in the global market.

In this capacity, the Council has recently prepared a Q. Is there a prospect for Greece to become an strategic document, submitted to the government, International Freight Center? where it details that one of the main Strategic A. The short answer is, of course, positive; the devil is, objectives for the country must be for Greece to however, in the details! Certainly a lot of valuable become a logistics cluster for global supply chains. time was lost since the first trains left from the This includes attracting multinationals to perform COSCO terminal in Piraeus for the Czech Republic in value-added logistics services, not only for European 2013, and many countries in the region have taken markets, but also for the whole Middle East and all necessary actions to attract many of the global North Africa (MENA) region, as well as the Black Sea players that could have invested in Greece, to invest countries. in their countries. The ports in the Adriatic have come a long way to compete with state-of-the-art This is obviously an ambitious goal in the current facilities, and countries such as Hungary, Slovakia, post-pandemic climate and requires a number and Romania have developed a competent logistics of tightly coordinated actions among many industry. There is still a window of opportunity, but stakeholders - from public agencies to the private it has to be recognized as the last chance for Greece sector. Actions include legislative reforms that would to become part of the global supply chains, and make the investment environment attractive, such the abovementioned actions must be successfully as land use legislation, digitalization of the supply deployed.

34 The performance of the logistics operations to reliable 3PLPs, enabling sector is inextricably linked with the them to focus on their core business. Economic performance external environment that shapes the As a result, logistics companies in needs and patterns for the production Greece, specifically the 3PLPs which and consumption of goods. Therefore, have invested in service quality and it is of no surprise that logistics innovation, have taken advantage of the Greek logistics providers in Greece faced significant of this opportunity, expanding their challenges as a direct result of the market share and improving their 2 2008 global financial crisis and performance. % market the severe downturn of the Greek 50 economy from 2009 onward. According to data from the ICAP Group49, the Greek 3PL market The third-party logistics market in Greece Following the recession, the Greek size was €387m in 2019, 4.6% up economy has been on the road to compared to 2018. The food, beverage managed to withstand the domestic recovery in recent years and the and tobacco industry accounted for economic recession and the slow growth in logistics sector – being especially 45% of the market by value, in 2018. international trade, through the provision sensitive to the performance of the In the medium term (up to 2023), the national economy – has been in an domestic 3PL market is expected to of warehousing and other added-value upward trajectory as well. An indicative grow by an annual average rate of services. example of the dynamic development 2.8%. Moreover, it is estimated that of the Greek logistics sector is the there were 100 3PL companies in The 10 biggest 3PL country’s third-party logistics (3PLs). Greece in 2018. Additionally, there companies share 50% of From 2014 to 2019, the 3PLP were approximately 30 enterprises the Greek market sector had been growing continually involved with 3PL services in Greece, This concentration in the 3PL – however, 2020 fell back to 2018 with almost 4,800 employees market, when compared to other numbers due to COVID-19’s impact. estimated to work in 3PL-related sectors of the Greek economy, activities, in 201850. should be considered as medium to Based on the turnover results of the low. However, when compared to Greek 3PLPs, the logistics industry Companies operating in the T&L studies from previous years, there has yet to completely recover to industry have an easier way of is a clear trend toward increased numbers before the financial crisis, getting into the courier sector, since market concentration51, which is managing a total CAGR of -2.06% from they already possess the necessary expected to further intensify as the 2008 to 2019 (but with a +3.55% infrastructure, appropriate networking, pandemic’s after-effects continue CAGR from the deepest point of and customer base. Out of the major to impact the Greek economy. the recession for the 3PL market, international players in the courier, in 2014). The severe reduction of express, and parcel (CEP) sector, only domestic consumption and industrial one company has a national presence production, along with the slow in freight forwarding in Greece, mostly growth patterns in international in air cargo (both in the Athens trade, put a lot of pressure on Greek International Airport and, since 2018, manufacturers, producers, and traders in Thessaloniki airport, through the to lower their costs without reducing new air cargo center that was created). performance and service levels. Statistics show that the courier sector’s market total in Greece is mostly split On the other hand, Greek between seven companies, sharing 97% manufacturers, producers, and traders of the market, with none offering a have become more positive toward freight forwarding portfolio. outsourcing their basic logistics

49. THIRD PARTY LOGISTICS 2020, ICAP Group, 2020 50. Third Party Logistics – 3PL, Stochasis, June 2019 51. THIRD PARTY LOGISTICS 2020, ICAP Group, 2020

37 Following a few years of decline, the logistics market in Greece seems to be picking up. Viewpoint Dr. George Xirogiannis Deputy Director General, SEV-Hellenic The 3PL market showed significant According to the ICAP Group’s The growing trend of outsourcing Federation of Enterprises growth up to 2008, due to the economic analysis of the Greek services to third parties, both increased demand for 3PL services, logistics industry52, a downward in Greece and internationally, attributed to the overall growth of trend was identified in the Greek has consolidated the demand Q. How important to manufacturers is the Greece once again faces a major opportunity to the Greek economy. At the same 3PL market between 2009-2014, for 3PL services, although their development of an effective intermodal capitalize its favorable geographical position to time, market dynamics drove the with an annual decline rate of 4.9%; penetration into Greek businesses transport and logistics sector? Is there a become an internationally acclaimed logistics establishment of start-ups in the a cumulative loss of about 26% of its is still estimated to remain low. prospect for Greece to become an International center with substantial economic and employment sector, the expansion of provided total value. This downward trajectory Greece still finds itself well below Freight Center? benefits. Greece currently offers modern transport services, and the upgrade of third- was restrained in 2015, as the value the World Bank’s last available A. In the midst of every crisis, lies great opportunity. and logistics infrastructure, port utilities and party goods management services of the domestic market recorded its Logistics Performance Index (LPI), through new technological systems. first increase in six years (2.15%). ranking 42nd in 2018, among 160 The COVID-19 crisis is transforming drastically the competitive 3PL providers. However, Greece should However, the Greek economy’s According to 2020 data, the Greek countries53. It will be interesting to supply chain of industrial goods worldwide. Global utilize RRF funds to upgrade further its status recession had a big impact on 3PL market value was estimated see, if the next edition of the index trade is in a state of disruption, while regional as a first-tier international hub. Initiatives like a businesses in the sector, as their at €368m, showing a significant will show any improvement in the supply chains grow rapidly. The need for greater modern railway network, large logistics parks and industrial and commercial activities decline (4.9% decrease), compared country’s position. visibility and resilience urges manufacturing and simplification of investment licensing are necessary shrunk, while the demand for these to 2019 (which was the highest services dropped significantly as point of the decade for the market, logistics to re-evaluate their operations and find to meet the standards of potential international well. with a value estimate of €387m), alternative transportation and supply routes. As a investors. due to the COVID-19 pandemic. result, efficient and timely supply chain routes are utilized heavily, outweighing low-cost locations in Asia or Africa. Estimation of the 3PL services market size in Greece (in million euros)

413 395 370 390 370 360 340 340 330 325 332 334

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: ICAP Group, Stochasis

Global 3PL market value by region (2016-2019)

YOY change YOY change YOY change According to estimates by Region 2016 2017 2018 2019 2017/16 2018/17 2019/18 Armstrong & Associates, 54 Africa 25.5 26.1 27.2 28.8 2.4% 4.2% 5.9% Inc. , the size of the global 3PL market in 2019 was Asia 306.1 329.3 358.8 380.2 7.6% 9.0% 6.0% at US$951.5b; a marginal Commonwealth increase of 0.1% in comparison of Independent 21.7 25.5 27.5 28.7 17.5% 7.8% 4.4% to 2018, due to the States / Russia enlargement of the 3PL market Europe 173.4 184.1 200.9 177.6 6.2% 9.1% -11.6% in Asia. Middle East 40.5 42.2 46.2 46.0 4.2% 9.5% -0.4% North America 200.3 220.0 251.5 252.2 9.8% 14.3% 0.3% South America 36.7 41.8 38.6 38.0 13.9% -7.7% -1.6% Total 804.2 869.0 950.7 951.5 8.1% 9.4% 0.1%

Values in billion dollars

Source: ICAP Group and Armstrong & Associates, Inc.

52. Ibid. 53. 2018 Logistics Performance Index (LPI), The World Bank, 2018 54. THIRD PARTY LOGISTICS 2020, ICAP Group, 2020

38 39 Overview of the Greek 3PL sector Greek 3PL companies have a strong Business relationships between operate in similar geographical in the country. It is worth pointing out, specifically, that Greece presence in the country, providing a 3PL providers and their clients are regions, tend to collaborate by forming 45% full range of supply chain services. generally based on medium- to long- special purpose alliances, while, by attracted double the investments in The most significant part of their term contracts, which help logistics joining their forces and assets, they transportation and logistics, compared income comes from warehousing and providers in designing their logistics are also able to collectively organize to the rest of Europe (12% and 6% distribution activities, as well as from network, operations, and investment and provide road traction to regional respectively)57. the organization and management of plans more efficiently. Specialized shippers, as well as to 3PLPs. road transportation. Depending on freight forwarding companies organize Additionally, around 1,500 haulers Additionally, 45% of logistics services their target market, many providers and manage the international established in Greece are currently concern the food, beverage, and specialize in the international transport of less than truckload (LTL) engaging in cross-border international tobacco industry, 17% electronics and movement of goods, while others and full truckload (FTL) cargoes, and road haulage operations, between electronical devices, 10% medicines 20% focus only on domestic transportation containers for multinational shippers, Greece and other EU and non-EU and medical equipment, 8% industrial 17% and warehousing. A significant traders, and manufacturers. These countries. products and raw materials, and 20% percentage of 3PL providers offer companies may own smaller or larger other industries or sectors (vehicles more specialized added-value services, warehouses, as well as outdoor Moreover, according to a sectoral and vehicles parts, clothing and 10% 8% like packaging, repackaging, and storage facilities and, therefore, their study by the ICAP Group, the overall footwear, furniture and household labelling, whereas leading companies distinction from 3PL providers is not Greek market for 3PL services had equipment)58. offer innovative solutions by always clear. been increasing over the 1998–2008 expanding their portfolio of services period, with an average annual growth in the fields of reverse logistics, Regarding the physical distribution rate of 19.7%, followed by an annual procurement, supplier management, and transportation of goods, the shrink rate of 4.9% in the 2008- Food, Electronics & Medicines Industrial Other beverage and electronical & medical products & and information and communications majority of 3PL providers rely heavily 2014 period and an annual growth tobacco devices equipment raw materials technology (ICT). on subcontracting work to smaller rate of 2.1% between 2014-2020. Source: Stochasis entities and owner-drivers, who These figures validate the perception The sector mostly comprises of provide low-margin, road-traction- of senior business executives, Logistics facilities Warehousing facilities and or upgraded building materials, medium- and small-sized companies, only services. A smaller share of that organizations regard logistics in Greece have been distribution centers have warehouse equipment and machinery, that operate in a highly competitive 3PLPs operate their own fleet, mostly management as a tool that can drive management systems, safety, and environment. Also, 3PL penetration consisting of small vans, for the reductions in operating costs during modernized and been modernized and are automation. into small- and medium-sized Greek distribution of goods in large cities, times of economic pressure and can concentrated within getting larger… enterprises is low and was estimated as well as few medium or larger create competitive supply networks Despite these developments, the The quality of storage areas and between 10%-16% for complete and trucks that support the trans-regional during times of prosperity56. average size of the area of the regional logistics markets, distribution infrastructure / facilities partial outsourcing respectively in movement of goods from the clients warehouses that have been built with improved access to in Greece has considerably improved 2017, based on the National Research to their distribution centers and In terms of the sectors of the or upgraded has not yet increased. within the last fifteen years, mainly Bank’s data of 540 industrial and warehouses. economy that have attracted major The existing logistics infrastructure the country’s engines of due to the fact that the major 3PL commercial enterprises. The most investments in Greece in the 2017- still primarily consists of small- growth: its ports. providers have invested in bigger, common services offered by 3PL The majority of transportation 2019 period, the top five are: sized warehouses and cross-docking automated, and better technologically companies to SMEs are transport companies that carry out the physical agri-food (17%), digital technology facilities, which are fragmented and equipped warehouses and distribution (46%) and distribution (35%). transportation and distribution of (15%), business services (14%), spread across the country. Based on centers. The available storage size However, in recent years we have been goods, are small enterprises of 2-5 transportation and logistics (12%), a recent study from the University of logistics facilities in Greece more witnessing the rise of the largest – in employees or owner-drivers, with an and finance (12%). These five sectors of the Aegean59, approximately 14% than doubled in the 2003-2009 both size and importance – national average of 1.5 heavy goods vehicles attracted, cumulatively, more than of logistics services companies have period preceding the economic and multinational 3PLPs in Greece55. per company. Road operators that two out of three investments (70%) warehouses with an indoor storage crisis. Additionally, this expansion area that is larger than 45,000m2, was framed by investments in new

Warehousing and Allocation of logistics services companies according to the size distribution corresponded of their warehouses to about 94% of the total % 6 2 value of 3PL services in Other services >45,000m 13.6% 2018 % 20,000-45,000m2 4.5% 58 10,000-20,000m2 28.5% Warehousing 5,000-10,000m2 20.5%

% 2 36 Cold storage accounts for <5,000m 20.5% Distribution nearly 1/4 of warehousing No warehouses 12.5% services Source: University of the Aegean 57. Attractiveness Survey Greece 2020, EY Greece, July 2020 55. Third Party Logistics – 3PL, Stochasis, June 2019 58. Third Party Logistics – 3PL, Stochasis, June 2019 56. THIRD PARTY LOGISTICS 2020, ICAP Group, 2020 59. Supply Chain and Logistics Magazine Issue 102, o.mind creatives, 15 May 2019

40 41 whereas more than 40% have facilities ...and are gathered in distinct leading 3PL companies have invested 2 smaller than 10,000m . If we take into regional logistics clusters in new and larger warehouses, as account the medium-sized companies well as in innovative technologies alone, the average size of a warehouse Besides its negative effect on the and systems. Concurrently, the facility would be less than 7,000m2. domestic market and the volume development of the port of Piraeus However, the market concentration of goods imported and exported, as a major Mediterranean container which took place in Greece as an the Greek economic crisis also led port, the expansion and integration indirect effect of the global economic to the significant concentration of of the national road network, and the crisis and the national sovereign debt the logistics market and further modernization of the railway system – crisis, pointed toward larger and more empowerment of the largest 3PL which also took place in the last eight efficient warehouses60. providers. In order to accommodate years – are reshaping the country’s their growth in market share, these logistics infrastructure footprint.

3PLPs in Greece per geographical location

Other locations

14.5% 36.7% Thriasio Pedio

Patras

2.2% Larissa 4.4%

Thessaloniki 7.8% 11.1% Piraeus

23.3%

Athens / Attica

Source: ICAP Group

Main logistics clusters in Greece Altogether, the logistics network facilities are concentrated in either the and operate their own facilities in Greece has been developed Thriasio Pedio plain in West Attica, or in other geographical regions, around seven regional logistics Oinofyta, an industrial zone north of preferring to develop the rest of clusters, each covering the supply Attica, in the regional unit of Boeotia. their network through collaborations chain requirements of a specific • As a common practice, 3PLPs with agencies or by subcontracting geographical area. The most important have developed and currently to smaller logistics providers that logistics markets have been developed operate their warehouses and already operate in the corresponding around Athens and Thessaloniki, the distribution centers primarily in regions. country’s two largest cities. At the the aforementioned major logistics • In order to serve remote areas same time, they are closely linked to centers of Attica / Boeotia and or / and the Greek islands, the the port of Piraeus and the port of Thessaloniki. Similarly, large majority of 3PLPs subcontract their Thessaloniki, the country’s two main retailers and manufacturers mainly transportation and distribution international maritime interfaces, and operate their logistics facilities and activities to regional agencies or / have direct access to the country’s warehouses in the same regions. and transportation companies. core international road and railway • Besides Attica and Thessaloniki, network. In Athens, the major logistics 3PLPs usually opt not to develop

60. Third Party Logistics – 3PL, Stochasis, June 2019

42 The Thriasio Pedio logistics services providers), holding 80% and ergose.gr market 20% of THEK S.A. respectively. The 588,000m2 land, which is owned Viewpoint Athanassios Psathas Undeniably, the most important by the Greek State through its CEO, ETVA VIPE S.A. concentration of logistics facilities GAIAOSE subsidiary, will be developed has been developed around the under a 60-year PPP scheme. The greater Athens metropolitan area, construction works have been awarded specifically in two distinct areas: the to the Mytilineos Group. Q. How sufficient and effective do you believe first one is the Thriasio Pedio plain that the current intermodal infrastructure is in in West Attica, and the second one is Per the developer’s plans, the T1 Greece? located at Attica’s northern borders, phase will be developed in two years in the industrial area of Oinofyta, in 62 A. The current infrastructure for intermodal transport with a budget of ca. €70m , while the The Thriasio Pedio logistics in Greece is insufficient and ineffective. That is the Boeotia. Both areas are located near T2 phase will be developed over the 63 park reason why intermodal transport taking place in the capital city of Athens and serve as next 10 years with a budget of €60m the city’s main supply centers for all Greece constitutes only a small percentage of the – however, the T2 development period Besides having been established as types of goods. It is estimated that the the country’s major logistics market, total freight throughput. can be accelerated as required, existing logistics facilities in these two subject to demand. In preparation Thriasio Pedio is expected to soon

areas alone have an indoor storage for the commencement of the accommodate the largest multi-modal The necessary link in the supply chain that will capacity of about 2m square meters, development, the TLC shareholders logistics park (TLC I & II) and the most reinforce intermodal transport is infrastructure and with the total indoor storage capacity recently proceeded with a €35m developed intermodal freight center services that can be provided by a complete freight in Attica being more than 2.3m square capital increase. in Southeast Europe. Having a direct 61 transit center. As of today, no such centers have meters . railway connection to the Piraeus been established in Greece. The establishment of As TLC benefits from a direct rail port (Ikonio), the Thriasio Pedio All the major 3PL providers have the Thriasio Pedio logistics center aims at covering connection to the port of Piraeus logistics park will become a physical developed and currently operate their expansion of the Piraeus container this shortage. and to the Trans-European Transport warehouses and distribution centers Network, upon completion, it will terminal. The park is also connected in the greater area of Thriasio Pedio, become one of the most important to the Greek core road network and Q. Is there a prospect for Greece to become an due to its proximity to Athens and its modern intermodal freight and the comprehensive TEN-T network, international freight center? suburbs, its connection to the Piraeus logistics parks in Southeast Europe. via the modern three-lane Attiki Odos A. Greece is already evolving to an international freight port container terminal, and the full motorway, and has direct access to center. The most significant evidence that supports access it provides to the core cross- All in all, TLC is one of the most the city of Athens and the Athens national road and railway network. this statement is: important infrastructure projects in International Airport. Additionally, the freight center will also be accessible • The improvement of the ranking of the Piraeus Attica and is expected to provide a A freight village of more major boost to both the construction via the East Aspropyrgos ring road, Container Terminal (PCT) to the 4th place, coming and the supply chain sectors. Indeed, linking NATO Avenue with the Attiki up from the 6th place in 2018, making Greece the than 145 acres is under during the construction works, Odos motorway. In terms of freight most significant gate to Southeast Europe. construction at the Thriasio hundreds of people are expected to traffic, 400 trucks and 50 wagons • The designing and establishment of the Thriasio Pedio plain be employed, while TLC’s operation will be served daily. Last but not Pedio complex, which is composed of: After more than a decade of is expected to create approximately least, Thriasio will provide the below • The logistics center, where the construction of unsuccessful efforts, the development 3,000 direct and indirect jobs. services: product storage infrastructure is being planned of the Thriasio Logistics Center (“TLC” • Product storage • The Thriasio freight railway station and the or “Thriasio I”) is about to take off, The launching of the TLC development • Car and truck parking spaces was also expected to pave the way marshalling yard, the construction of which is pending final approvals from EU’s DG • Customs Comp. for a second PPP project in the same almost complete. location, “Thriasio II”, an intermodal • Security • The prospects of developing the commercial port TLC will be the first organized logistics terminal station to be developed on • Waste management and recycling of Thessaloniki and its transport connections, 2 park in Attica, Greece, and will be a 1,650,000m land plot adjacent to • Electricity production from following the completion of its privatization developed in two distinct phases: T1 TLC and owned by OSE – the national renewable sources process. 2 railway infrastructure company. comprising ca. 120,000m of storage • Servicing to motorists and vehicles • The geo-location of the above infrastructure in facilities, and T2 comprising an relation to the national transport networks that additional 115,000m2. The first bidding process for Thriasio II attracted the interest of four ergose.gr are part of the Trans-European Transport Network. consortia, three of which were • The upgrade of the transportation network of the The project will be developed by THEK S.A., a special purpose vehicle set up shortlisted for the second phase. country. by the joint project promoters, ETVA The bidding process was concluded • The commercial development plan of other VIPE (the largest industrial parks in January 2020 without success, significant ports of our country (Alexandroupoli, developer and operator in Greece) and however, and a new bidding process Kavala, Igoumenitsa, Volos, Irakleio). Goldair (one of the top Greek logistics is expected to be initiated in the near • The plan to create an energy hub at the port of future. Alexandroupolis. 61. Περιζήτητες οι εγκαταστάσεις logistics στην περιοχή της Αττικής, kathimerini.gr, 5 June 2020 62. Goldair Cargo: Πνοή στο εμπορευματικό κέντρο Θριασίου με 3000 θέσεις εργασίας, thriassio.gr, 22 January 2018 63. Συμμαχία Goldair – αμερικανικών κολοσσών για τα περιφερειακά λιμάνια, capital.gr, 15 February 2020

44 45 Boeotia’s logistics cluster The East Attica logistics The Aspropyrgos industrial The Sindos logistics and for the major 3PL companies, stakeholders on 27 June 2018, which, in the previous years, have during an event organized by the then The second largest concentration cluster park industrial zone invested in establishing modern Deputy Minister of Industry and the of logistics facilities can be traced Last but not least, another logistics The Aspropyrgos industrial park In addition to the logistics centers warehouses there, each of which Thessaloniki Chamber of Commerce at the northern borders of Attica, facilities center in the suburbs of is located south of NATO Avenue located in the greater Athens exceeds 18,000m2 of indoor storage and Industry. During this event, a road in the regional unit of Boeotia and, Athens has been recently established and administratively belongs to the area, a majority of the Greek 3PL capacity. Located at this unique and map leading to the establishment more specifically, around the town in East Attica, adjacent to the Attiki Municipality of Aspropyrgos. The companies, particularly those with advantageous geographical position of the Kalochori business park was of Oinofyta, located 50 km north of Odos motorway, across Paiania, creation of this area begun after the strong presence in international in Northern Greece, Sindos is widely presented. The then Ministry of Athens. The area also accommodates Koropi, and Markopoulo. The signing of a Joint Decision by the then freight forwarding activities, also considered as an important logistics Economy and Development, taking some of the largest and most aforementioned logistics facilities Ministry of Economy and Development operate warehouse facilities in gateway to the Balkan countries and into consideration the serious important industrial installations in are situated at a short distance from and the Ministry of Environment and two main regions on the outskirts is expected to soon strengthen and environmental and operational the country, while the main national the main retail centers of the greater Energy. Specifically, the development of Thessaloniki, namely Sindos boost its international role, further problems of the region, undertook motorway (PATHE) and railway Athens area, and are also near of the Type B Aspropyrgos business and Kalochori. The strongest extending its catchment area toward to promote all necessary actions line, which both connect Athens to the “Eleftherios Venizelos” Athens park (south section) was approved concentration of warehouses and the southeast and central regions of for setting the foundations for Thessaloniki and to the Greek borders International Airport. Therefore, the by the “Aspropyrgos Industrial Park distribution centers may be traced at Europe and Turkey. the rehabilitation of the Kalochori to the north, also cross it. concentration of 3PL providers in this Authority (VIPA) South Section” Sindos, in West Thessaloniki. Sindos industrial area. After a silent period, area is limited, and the majority of company, carrying the distinctive title has been developed as an organized the rehabilitation process has recently This concentration of logistics facilities The Kalochori logistics the established warehouses belong to “VIPANOT Aspropyrgos”. The total industrial zone covering an area of started, with the connection of in Boeotia expands along the national wholesalers and retail companies. expenditure envisaged is €25m and 2,470 acres, originally attracting the center the Kalochori industrial area with motorway to the north, in two sub- includes a net expenditure of €20.2m, most important logistics facilities in Kalochori constitutes the second the PATHE and the Egnatia Odos regions: around Schimatari and on the 64 plus €4.8m in VAT . The whole Northern Greece. largest concentration of logistics motorways being awarded to AKTOR outskirts of Thebes. area under development will cover facilities in the greater Thessaloniki in May 2020, following a bidding 2,062 acres. Finally, the Aspropyrgos Featuring two adjacent railway area. Since it is in very close proximity process65. Besides serving the city of Athens, business park, will also house – connections at its northern and to the city’s port, it functions mainly the abovementioned logistics centers among others – logistics companies, southern borders, direct and as the regional logistics center for Finally, the domestic market is also have turned out to be all-important warehouses, and warehouse immediate access to the core national several companies in the retail sector. supported and served by a third, supply chain nodes for the national complexes which are not part of the road network, and sitting within a smaller concentration of logistics manufacturing industry, as they industrial / craft facilities. Similarly, 15 km distance from the port of The first results of the study on the facilities in East Thessaloniki, near connect the industrial zone at the renewable energy plants, laboratories, Thessaloniki, Sindos is considered rehabilitation of the informal industrial the city’s international airport, named northern borders of Attica, in Boeotia, research centers, schools, public an advantageous area and has, concentration in Kalochori, were Kavallari. with the port of Piraeus, as well as service departments, and more, will therefore, been the favorable location presented to the local and business with the rest of the country’s main also be housed there. cross-border links and maritime multimodal interfaces, via the core national road and railway networks.

Boeotia’s logistics cluster (Oinofyta, Schimatari) Sindos logistics and industrial zone

Kavallari

PATHE Attiki Odos motorway motorway

Thessaloniki Thriasio Pedio Kalochori logistics center

Athens Athens International Piraeus Airport Port East Attica logistics cluster

64. Εγκρίθηκε με ΚΥΑ η δημιουργία Επιχειρηματικού Πάρκου στον Ασπρόπυργο, supply-chain.gr, 1 November 2019 65. Η ΑΚΤΩΡ μειοδότησε στο έργο της οδικής σύνδεσης ΠΑΘΕ με το λιμάνι της Θεσσαλονίκης, ypodomes.com, 13 May 2020

46 47 Supply chain business parks The two fundamental investments are Its funding scheme will consist of 50% The project, with a budget of €7m, Authority of Igoumenitsa, which is The functional relationship between the following: public and 50% private funds, utilizing The growth rate of the supply chain will be completed with land-use responsible for the management and the two divisions of the port (port and EU funds66. Right now, studies are industry in our country, combined with planning and the construction of operation of the port area. hinterland) ensures the investment being conducted for the business the National Strategy for Logistics and infrastructure projects (roads, water The Port Authority of Igoumenitsa is is as strong, lasting, and efficient as park. The studies are planned to be Transport, is an important policy area supply, sewage, road lighting, optic designing the park with the immediate possible, enjoying entrepreneurial completed until the summer of 2021. for the government and all political fiber telecommunications, etc.). It aim of developing new specialized interdependence. The project Construction works for the park will parties. This, coupled with the rapidly calls for the creation of large-scale transportation, storage, and logistics is financially supported by the start right after. expanding business dynamics of the communal and utility infrastructure, services, that will highlight the new Connecting Europe Facility (CEF), upon 1 with a green perimeter of about 25 momentum of the port of Igoumenitsa its inclusion in the ADRI-UP program private economy and the promotion The total area of the park is about of relevant business associations, has acres and communal green areas in freight transport. as a Trans-European Transport 370 acres. After its construction, triggered the development of supply The Oinofyta supply chain covering 42% of the land, in addition Network project, following actions the area available for exploitation chain business parks, which were first to the administration building or other The business park is being developed by the Igoumenitsa Port Authority. business park will correspond to 215 acres, within introduced with Law 3982/2011 on buildings where public authorities and in two areas. The first is located This way, part of the cost of the The project concerns the development which, buildings with a building logistics companies. Supply chain services can be housed. A fire service within the port and will be used infrastructure and public buildings is of a specialized business park for coverage ratio of 70%67, a building business parks have already matured station and large parking spaces for as a temporary storage site for secured. supply chain companies at Oinofyta. to plot ratio of 1.668 and a maximum in Greece, with the first two major commercial vehicles (trucks, etc.) are unaccompanied cargo. The second The project’s implementing entity is a building height of 18 meters, can be investments in the country carried also to be constructed, along with area is located in the hinterland, The nature of the project calls for the special purpose company supported by developed. A Free Customs Zone has out according to relevant technical / half-time and hosting infrastructure at Grikas, within an 800 meters creation of large communal green “Transcombi Express SA”, operating been established in an approximately economic studies for their licensing (parking and car service, hygiene and distance from Egnatia Odos, where areas covering 38% of the park, as well from a 25-acre building within the 200 acres part of this area, managed and implementation. catering services, etc.). a road junction that will connect as large-scale utilities necessary for development area of the park. by “Transcombi Express SA”. the motorway with the park is being the operation of a logistics park (i.e. The first investments in logistics The business park, with all the planned and will be developed by fire station, customs office, car service Inside the park, small- and medium- The Park Development Agency aims to freight centers were implemented at proposed technical and environmental the Region of Epirus. This is an area and gas station, entrance gateway, sized supply chain companies integrate the area into the city plan, the Oinofyta industrial zone and at infrastructure to be constructed in of approximately 500 acres, with engine room, restaurant / refreshment can engage in a range of logistics in order to achieve the optimal spatial Igoumenitsa, the country’s western it, combined with its operations and 270 acres allocated to logistics area, etc.). The comfortable public activities, as stipulated by Article and environmental organization of gate and an important hub in the management processes that fall companies, in combination with the spaces, combined with large parking 4 of Law 4302/2014, as well as the site, and avoid any consequences trans-European transport network, under the operational regulation, existing industrial park of Thesprotia, spaces for commercial vehicles in manufacturing and third-party related to operating outside the due to its port. incorporates all the infrastructure which already houses manufacturing (trucks, etc.), with half-time and activities included in the area’s low plan. It also aims at promoting the and processes identified for the enterprises, covering an area of hosting infrastructure (parking and car and medium disturbance productive incentives offered to businesses that Enterprises operating in the above- operation of a Smart City-type area, approximately 230 acres. The total service, hygiene and catering services, activities listed in Presidential Decree will settle in the park, bringing added mentioned facilities, are expected making it eligible for an ISO 50001: area available for urban development etc.), offer the best operating (PD). 59/2018. value to the already known advantages to achieve the highest business 2011 certification. This is the first of is 335 acres, with building conditions conditions in an “all-in-one” logistics of the property, namely its transport success rates and have access to its kind logistics infrastructure to be falling under the permitted limits for park, for users and visitors alike. The Oinofyta logistics park was infrastructure and geographic financial sources and incentives developed in the country and fulfills buildings in business parks (i.e. 70% included in the first group of location. from the first day of their operation. all the prerequisites for attracting building coverage ratio and a building According to a review carried out by investments in the context of the 69 The multidisciplinary character of freight transit flows, leading to the to plot ratio of 1.6). sectoral media , the development of implementation of Law 4472/2016, It is worth noting that the area is these clusters (logistics, processing, development of added-value services logistics companies and the logistics for which a positive opinion was within the reach of the metropolitan tertiary, etc.) will effectively serve the (e.g. assembly, small processing, etc.) The project, with a budget of sector is affected by the establishment issued by the General Secretary of center of Athens, very close to the modern economic needs dictated by within Greece. The implementing €7.6m, is currently in the approval of modern commercial and industrial Planning with the agreement of the PATHE motorway and adjacent to the business coexistence, the necessity body’s goal is to make the Oinofyta phase, and complements the area’s centers. Law 4605/2019 gave a Ministry of Environment and Energy. Athens-Thessaloniki railway line. A rail of which was perfectly recognized logistics park the first “smart urbanization and infrastructure significant boost to the creation of The development and operation of diversion has been built, to allow for and institutionalized for the logistics connected transport logistics park” in construction projects (road, water, commercial parks, solving significant the business park will take place in the development and establishment sector, through Law 4302/2014. the country. sewage, road lighting, optic fiber problems. However, companies located four phases, involving the mandatory of rail transport for businesses within telecommunications, etc.). outside these parks – which constitute construction of a central wastewater the park. The operation of the Free the majority – might have a harder treatment plant. The project will be Customs Zone is greatly facilitated The park has direct access to the time gaining access to international undertaken by a special purpose by the fact that the customs office of Egnatia Odos motorway and has been markets, as their competitiveness company (the Industrial Park Oinoi also operates within this area. designed with all the appropriate might be comparatively lower to that Development Company, established All that infrastructure fully fulfills 2 technical infrastructure that can of their peers operating inside the in August 2019), involving ETVA the appropriate intermodal transport enable future connection with the parks. VIPE, the Region of Central Greece, environment standards, and it can be The Thesprotia supply chain Egnatia Railway, at Kristalopigi. Supply the Municipality of Tanagra, and inferred that the park will be a source business park chain companies engaging in low the Association of Central Greek of significant investment in logistics, and medium disturbance activities The Thesprotia regional unit is host to Industries, with the last three having meeting the needs of the major across the range of logistics activities the first logistics business division of signed a memorandum of cooperation. industrial area of Oinofyta. of Article 4 of Law 4302/2014, as its kind in the country, with the port well as in manufacturing and third- of Igoumenitsa being a key driver of party productive activities of low and growth, meeting all the conditions medium disturbance of Presidential for the development of combined Decree 59/2018, can operate inside 66. Ιδρύθηκε η Εταιρεία Ανάπτυξης Επιχειρηματικού Πάρκου (ΕΑΝΕΠ) Οινοφύτων, supply-chain.gr, 1 November 2019 transport services. The implementing 67. The building coverage ratio refers to the ratio of the building area, divided by the land (site) area. The building area refers to the floor space of a building, when the park. looking at it from above. As an example, a ratio of 70% means that a warehouse of 7,000m2 can be built in an area of 10,000m2 (excluding floors). body is supported by the Port 68. The building to plot ratio refers to the ratio of the total floor area (for all available floors) of a building to the area of the site. As an example, a plot ratio of 1.0 means that the total floor area can be equal to the site’s area. 69. 1st Infrastructure and Transport Review 2018-2019, metaforespress.gr and ypodomes.com, 2019

48 49 The process for the The Gonos logistics center international call for One of the two most important freight increase significantly over the coming warehouse rents in Thriasio Pedio had 2018, when prices started rising again facilities’ rent prices in Thessaloniki centers in Greece, from a geostrategic decades, given the relatively low reached their peak value in 2008, to upward of €3.5/month per square are currently in the range of €4.5/m2 tenders concerning the perspective, is the one planned to output of the neighboring economies, exceeding €5.5/month per square meter. in Sindos and Kalochori. development of the be established in the Gonos former assuming the pace of their integration meter. Rents of more than €6/m2 military camp in Thessaloniki, which into the world trading system remains were also reported in some cases. In other regions, where availability of Construction of new warehouse Gonos logistics center in is located in close proximity to the at today’s standards70. However, as a result of the recession construction land is greater, or the facilities, especially in the Thriasio Thessaloniki has been Port of Thessaloniki and the industrial of the Greek economy, prices rapidly distance from the city of Athens or / Pedio area, is on the rise in recent parks of Sindos and Kalohori. The above are supported by the declined at the start of the previous and the Piraeus port is longer, as in years, since the demand supply of initiated. interest shown by a number of decade and, since 2015 onward, Boeotia, rent values are even more storage space exceeds the supply, The ca. 670,000m2 land plot is investors, given the strategic location remain relatively stable, in the range competitive, being 30% lower than as the majority of warehouses under owned by the Greek State, through of Thessaloniki in the Balkan Peninsula of €3/month per square meter, until the ones in Thriasio Pedio. Logistics construction are pre-rented71. its GAIAOSE subsidiary, and the and the camp’s close proximity to development potential is ca. the city’s port. Indeed, the Gonos 71. Περιζήτητες οι εγκαταστάσεις logistics στην περιοχή της Αττικής, kathimerini.gr, 5 June 2020 300,000m2. camp is located 3 km away from the Egnatia Odos motorway, which ends The establishment of the Gonos at the Promachonas border station logistics center is of supra-local via the A1 and A2-E12 highways, and and geostrategic importance, as it connects the national road network concerns not only the Greek market, to the rest of the TEN-T road network, but also the Balkans and Eastern through Bulgaria. Europe. The Gonos camp also features a The project is currently in the pre- rudimentary rail connection, with the feasibility stage, which proposes its OSE rail network (part of the greater development in two distinct phases: TEN-T railway network) extending the first phase (T1) may take up to two within the land plot, and a container years, and concerns the processing transit station at a distance of just of all technical studies and the 500 meters from the northern part completion of the relevant approval of the camp. Due to the synergies process, while the second phase that will occur through the use of the (T2) may last four to eight years, Gonos logistics center, and through and involves the construction and its projected connection via rail with operation of the project. pier 6 of the Thessaloniki port, the city could further enhance its commercial If developed as a logistics park, it is profile and develop into one of the estimated that the Gonos logistics most significant transportation and center will create approximately 3,000 logistics hubs in Southeast Europe. jobs. If other, more complex activities, such as manufacturing, are to be Competitive warehouse rents hosted, then newly-created jobs may increase to approximately 5,000- facilitate industry growth 6,000. Warehouse rents in Greece are among the most competitive ones At present, the majority of cargo in the region, since they have been handled at Thessaloniki’s port is bulk significantly reduced compared to the goods, raw materials, or general cargo previous decade, as a result of the designated for the Balkan countries. financial crisis. The average rental A large plot of land like the Gonos cost for storage facilities in Thriasio camp, which features a direct rail link Pedio in West Attica – which never to the port, will provide additional ceased being the most attractive capacity to the port’s terminal for the logistics market in Greece for over temporary storage or / and processing 15 years – ranges between €4-€4.5/ of these goods. During the last few month per square meter, depending on years, container throughput in the the type and size of the facility. port of Thessaloniki has shown a stable growing trend. The demand Prior to the financial crisis, and in for container transport by the port’s close alignment with the continuous hinterland market is expected to growth of the Greek economy,

70. Port of the month: Port of Thessaloniki (Greece), espo.be, 31 January 2017

50 51 Viewpoint Nikos Stathopoulos Former Secretary General for Transport*, Ministry of Infrastructure and Transport

Q. What are your plans towards the development effort in that direction must be the simplification of an effective intramodal transport & logistics of the legal framework for logistics, incentives sector? for mergers and growth, and facilitation of a fleet A. To our understanding the key problems for the renewal. Most probably, this will entail combining development of the logistics sector in Greece today the fleet renewal with critical size conditions and are: environmental efficiency. 1. The completion of an efficient railway market in terms of both infrastructure and operation. 3. Favorizing the TPL market and operators in a. This means connecting Patras to Alexandroupoli the supply chain global market through Athens and Thessaloniki in less than 10 A clear priority in terms of compatible state aids, hours. The necessary scheme is Patras to Athens subsidies and projects must be given to the TPL in less than two hours, Athens to Thessaloniki in sector. The actual share of the TPL operators 3 hours and Thessaloniki to Alexandroupoli in less in our supply chain, is far lower than in every than 5 hours. other country considered as a successful model. b. Completing the technical systems in the railway Favorizing the TPL and the Value-Added Logistics network, especially the signaling and ETCS, (VAL) sector, is a sine qua non condition for the in order to maximize speed and capacity in innovation and globalization of the Greek logistics the railway at least at the Patras–Athens– sector. Thessaloniki–North borders axis. c. Connect the remaining ports on that main axis of Q. Are there opportunities concerning the the country. development of foreign direct investments in this sector for Greece? Without those three necessary conditions, the A. As mentioned earlier, favorizing critical size, whole discussion about intra / multi / intermodal mergers and acquisitions is one of the necessary logistics sector will remain theoretical. We do hope conditions for an efficient logistics sector. Some that the railway projects for the upcoming period, of the bigger Greek logistic companies can be both for the Recovery and the Structural European of interest to foreign investors. Also, in terms funds, will move in that direction. of the territorial organization of the logistics market, we need some heavier warehouses and 2. Develop a logistics sector with the necessary TPL infrastructure at Patras, Thessaloniki and critical size and know-how Alexandroupoli, at least, as well as some smaller Currently, the supply chain market suffers from but modern logistics facilities near our other several chronical problems. Our operators do not ports. For all those facilities, foreign investment have the critical size to compete in the European can be considered as the necessary precondition and international markets. Too many small for articulating and promoting in the international companies, limited to transportation, storage and market a clear, realistic and comprehensive national low added value operations, an aged fleet, especially logistics facilities strategy, combining all three for the international transportation, overcapacity pillars mentioned above. and underutilization in terms of vehicles. The state

* This viewpoint was provided by Mr. Stathopoulos in his capacity as Secretary General for Transport, in November 2020.

52 International road Reduced volumes of goods was reduced by 12.1% (compared transported in Greece put to the first eight months of 2019). Road freight transport freight has recovered In total, estimations regarding the as international trade pressure on road freight worldwide freight volume of 2020 The state-of-play of the road freight sector transportation foresaw a year-on-year decrease of through the Greek ports is 8.7%74. in Greece Between 2009 and 2015 a dramatic expanding rapidly reduction in total road transport 3 performance occurred in Greece. Road freight transport in The national transport industry, Greece, in terms of tonnes- having a share of 98% in total road freight volumes and 61% in total road kilometer, has increased by freight tonne-kilometer, suffered the approximately 3.03% most severe consequences of the This slight year-on-year increase in global financial crisis and the Greek road freight transport performance is economy’s recession. mainly the result of the slow recovery of the sector’s international road Between 2015 and 2017, the road freight activities. Despite some ups freight sector managed to record a and downs, international road freight considerable increase in both tonnes transport reached its record low in transported and tonne-kilometer. 2011 and, from that year onward, However, a decline was observed it has been recovering, achieving a during the 2017-2018 period, as significant increase of 25% by 2015. the weight of goods carried by road From 2015 to 2018 it kept increasing, freight vehicles registered in Greece while it faced a small decrease in had decreased72, followed by an 2019. Τhe international freight increase in imported goods during the component of the road freight market 2018-2019 period73. in Greece addressed the decline of the first years of the Greek recession by Focusing on the most recent years, exceeding its pre-crisis performance road freight volume seems to have levels, reaching a new record high of stabilized from 2012 onward, even 292m tkm, in 2018 and 280m tkm in though there were some noticeable 2019. fluctuations as a result of the political and economic uncertainties in Greece. This recovery can be accredited to These year-on-year performance the increase of international trade fluctuations are more noticeable in volumes transshipped via Greece, with tonnes transported figures, since the the port of Piraeus being at the heart volume of goods transported is more of this activity (please see chapter 1). prone to the uncertainties of the domestic market. The considerable increase of trade through the Piraeus port, supported In general, it is important to the recovery of almost all related understand how the COVID-19 industries, transforming the port into pandemic has affected transport a real engine of growth for the Greek worldwide and, therefore, the Greek economy. Since new investments for sector. According to ICAP, the the port’s expansion have already COVID-19 pandemic had a severe been planned for the next years, the impact on the volume of worldwide opportunities for Greek road freight freight trade in 2020. In the first eight transport have never appeared more months of the year, freight volume promising.

72. Share of road in inland freight transport on the rise, Eurostat, 4 September 2020 73. Ibid. 74. ΥΠΗΡΕΣΙΕΣ ΔΙΑΜΕΤΑΦΟΡΑΣ 2020, ICAP Group, 2020

54 55 Evolution of road share in total inland freight transport performance, per year It is worth mentioning that the total of 4.9m km of roads in 2018. 141 countries, as regards the COVID-19 pandemic had a strong The USA and China closely followed, competitiveness of the country’s effect on the port of Piraeus, as with 4.6m and 4.5m km respectively. infrastructure, marking an 98.7% COSCO announced its first quarterly With 34.8m, the EU-27 also owned improvement of one place from the decline in container handling in the most means of road transport, year prior. 98.5% 98.5% years. The Piraeus port recorded a followed by China with 25.7m. Greece reported 3.8% decline, compared to ranked 12th among the EU-27, in road Structural analysis of the 98.4% 2019 – a small number considering network length. 98.2% Greek road freight sector 98.3% the worldwide effect of the pandemic 98.2% on the sector and given the fact that, In 2018, trade transportation reached The Greek road transportation in March (which was the only month approximately 3.3b tkm globally, with industry primarily consists of small 97.9% 97.9% that recorded a decline), the container road transportation accounting for companies and owner-driver haulers, handling percentage dropped by a 51% of the total share, and maritime that provide low margin traction 97.8% staggering 15.4 points75,76. transport for 29.2%. services to medium or large national and pan-European logistics providers. As discussed in the previous chapter, The total number of means of road Therefore, a large number of Greek 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 the domestic logistics market was also transport in the EU-27 increased by haulers rely heavily on providing on the rise in the previous years, in 2.5% in 2019, compared to 2018. At a outsourced traction to 3PLPs, whilst Source: Eurostat, EY analysis line with the recovery of the national country level, Greece ranked 9th among others are able to win their own work economy. Despite the COVID-19 its fellow EU member countries, with directly from shippers and carry it out setback, the logistics market is the first two spots occupied by Spain with their own vehicles and drivers. National and international road freight transport (in million tonnes-kilometer) expected to resume its upward trend and Germany respectively. in the following years and, as a result, The hire and reward transportation sector in Greece had a share of 26% of 35,000 the road freight sector can expect Greece owns the oldest fleet of heavy an increase in freight volumes and road transport trucks. The average the total road freight transportation tonnes-kilometer, rendering it more age of Greece’s trucks are 20.9 activities in 2019 (in terms of tonne- 30,000 attractive for new investments77. years, while the EU-27’s average is kilometer), significantly below the EU National transport International transport 12.1 years. In 2018, Austria had the average. If the share of outsourced 25,000 Road freight transport has newest fleet of trucks in the EU, with transportation activities is calculated experienced a severe downturn as a an average age of 4 years. based on the tonnes of goods 20,000 result of the continuous recession of transported, then the provision of the Greek economy and, despite some Greece ranked 11th in road hire and reward services has a very 15,000 signs of recovery from 2012 to 2015, transportation in 2019, with 354m small share, in the range of 21%. there was another decline in 2019: tonnes. Germany, on the other hand, The fragmentation of the transport 10,000 sat at the top of the ranking, with 3.2b market in small providers (1.5 trucks • The growth of freight volume (in tonnes of commercial road transport per provider, on average) explains 5,000 tonnes) transported via road, reached in the same year79. the existing low margins in the its ceiling in 2009, when more than transportation sector. 0 644m tonnes were transported. Greece’s transportation infrastructure, 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 • After a strong 20% recovery in 2013, includes: On the main line-hauls, where the road freight performance worsened • Ports supply of transportation services in 2014, recording a 16% decline in usually exceeds the demand, the • Motorways Source: Hellenic Statistical Authority, EY analysis total tonnes transported. However, it pricing of transportation services had partly recovered by 4% in 2015, • Airports is in the range of €1/km, on reaching 420m tonnes. After that, • Railways average. Whilst extensive road Road freight performance in 2019 per type of activity, the total tonnes transported kept • Customs stations haulage subcontracting practices decreasing, reaching 354m in 2019. provide a responsive resource to in terms of tonne-kilometer / tonnes transported • Hinterland logistics infrastructure the Greek logistics industry, this National transport is the level of fragmentation in the road In terms of tonne-kilometer In terms of tonnes transported predominant component of the The Greek road network Each of the above is very important transportation market can lead to Greek road freight transportation for the Greek logistics sector. 2% Greece has one of the most developed an imbalance in the ability of small market, especially in terms of tonnes According to the EY Attractiveness road networks in Southeast Europe. operators to fully recover their costs. loaded; in 2019, its share in total Survey Greece 2020, the recent The main road network consists of Any increase in costs (such as in fuel road freight volumes reached 98%, investments and various initiatives more than 2,145 km of highways and price or driver wages) directly affects and 54% in total road freight tonne- 78 in the T&L industry have started 45% motorways . profits and many haulers simply kilometer. to bear fruit; the World Economic struggle to pass the added costs on to The EU-27 shared the most extensive Forum’s 2019 Global Competitiveness 55% the client. road network in the world, with a Report ranked Greece 37th among 98%

National transport 75. Piraeus container traffic slumps in March, ekathimerini.com, 29 April 2020 International transport 76. Greece: Logistics & Industrial Market Snapshot Q2 2019, Delfi Real Estate, April 2019 77. Αντοχές επέδειξε ο ΟΛΠ εν μέσω πανδημίας, kathimerini.gr, 8 January 2021 78. Στατιστικά Στοιχεία έτους 2019, Hellenic Association of Toll Road Network (HELLASTRON), 2019 Source: Hellenic Statistical Authority, EY analysis 79. ΥΠΗΡΕΣΙΕΣ ΔΙΑΜΕΤΑΦΟΡΑΣ 2020, ICAP Group, 2020

56 57 The connection between Greece and the Danube River Establishing a vertical link between countries. The development of what the Danube River – Europe’s second is being promoted as the “new Silk longest river – and Greece’s Aegean Road” – involving land, air and sea – is coast, by a navigable route through already in progress, and the utilization the Morava and the Axios/Vardar of existing rivers could not be left out Rivers, may seem like a project of of the wider plan. The issue has been colossal proportions by European addressed at top-level talks involving standards, but its development cannot leaders in Athens, Beijing, Belgrade, be ruled out, as it would serve the and Skopje, over the past few years. interests of China – an undisputed Some preliminary studies have powerhouse trader. The potential indicated that such a route would work project, the development of which out to be three and a half days faster, could bring about radical changes compared to the existing option via to the transportation options in the Rotterdam. wider region, seems to be moving up on the agenda of Greek and Serbian bilateral relations, also promising to inevitably engage North Macedonia, as well as various Central European

Fuel and toll surcharge agreements Despite this level of organization, Subcontracting of road are levied on some contracts, but however, 3PLs, freight integrators freight transport in Greece sometimes they can be difficult to put and forwarding agents, continue to Navigation on the natural riverbed Cargo is dispatched from the Dutch Subcontracting levels in road freight Navigation on artificial riverbed canals into effect. Delays in payment from play the most important role in the Artificial canal interface port of Rotterdam to reach the the buyer to the carrier have been a organization of domestic, as well as transport in Greece are significantly Danube Danube River, running horizontally, main feature of the industry in the international road freight movements. lower than those in other EU from Central Europe, to Germany’s last decade and this situation has only While driver shortages in the road member countries. Subcontracting southwest, and then to the Black been exacerbated by the economic haulage sector are a fundamental in the transportation sector may Sea, through Romania’s east coast. developments over the past few years. challenge for the majority of EU serve different business needs, Belgrade Development of the new waterway countries, the economic recession in including: cost saving, covering would offer a transportation link from There is a steady increase in the Greece has led to a surplus of qualified a peak in demand, addressing a the East Mediterranean directly to the development of strategic alliances and and experienced truck drivers or truck particular service not suited to the heart of Europe, via the Axios/Vardar, synergies among Greek road haulers. owners, who are currently either main operation, involving / meeting Morava and Danube Rivers. Cargo specialized cargo requirements, and, would no longer need to be shipped Traditionally, these synergies are unemployed or struggling to win on- Serbia mainly achieved through the formation the-spot work contracts. As more and last but not least, serving a particular all the way to Gibraltar and from there of so-called “transportation agencies”, more international cargo is arriving at destination or region, especially where up to the Netherlands, or be held up there is little prospect of a backload. in the narrow Bosporus Strait. This a result of the collaboration between the Greek ports, and as the economy Sofia several owner-drivers or / and small is recovering, such a surplus of is an attractive prospect for China road transport companies operating qualified professionals is an important The majority of 3PL providers rely and other East Asian countries, in regional networks. These agencies asset for the logistics industry in considerably on subcontracting which export millions of containers provide road transportation services Greece. A large percentage of these work to smaller entities and owner- Bulgaria to European markets and Russia drivers that provide low margin, within the regional boundaries of one drivers have compulsory driver Skopje each year. The Greek, Serbian, and or more prefectures, by consolidating qualifications, allowing them to drive road-traction-only services. There North Macedonian routes, will need are several types of relationships and goods (groupage) that either originate different classes of vehicles; apart North Macedonia to be widened and deepened, while, from or are designated to the county’s from holding an EU professional driver dependencies among 3PLs and road according to a Serbian study, canals shippers or consignees, respectively. license, they have also been certified hauliers, including: (a) small hauliers bypassing Skopje and the two Serbian This type of cooperation allows small with and hold the European Certificate that work exclusively for large 3PL cities of Nis and Kraljevo, must also be companies, (b) those that work with transport operators to increase their of Professional Competence (Driver Thessaloniki developed. vehicles’ load factor and reduce empty CPC) in compliance with EU Directive a few significant 3PLs, and (c) those running – especially in backloads – 2003/59/EC. that serve an occasional “on-the-spot” and, therefore, improve vehicle load. Greece productivity and optimize operational costs.

58 59 Brief organizational and economic profile of the road freight transportation sector in Greece Following recent Several developmental programs freight intermodal corridor, that have been implemented over the interconnects Greece and Turkey About 16,370 enterprises operated in developments, Greece last 15 years in Greece, resulting with Europe, via the sea route to the Greek road freight transportation Key economic indicators of the road freight transportation sector, features one of the most in the significant expansion and Italy. sector in 2018, equivalent to 2018 modernization of the national • The Egnatia Odos motorway also more than 30% of the entire developed road networks motorway network. Unsurprisingly, Analysis performed in interconnects the Thessaloniki and transportation and storage services Sector Road freight Transportation the most important road networks accordance with the NACE in the region. Igoumenitsa ports with the regional sector population. These enterprises services & Storage Rev.2 classification of are located around the key ports of Kavala and Alexandroupolis, employed a total of 36,234 people, sector services economic activities. NACE economic logistics hubs of Athens located near the borders of Greece representing 27.1% of those working sector provides the framework for collecting and and Thessaloniki, interconnecting with Turkey in the east. in the transportation and storage Number of enterprises 16,371 50,829 presenting a large range of these two large cities with the • Construction works began in 1994 services sector, and recorded statistical data according country’s main seaports of Piraeus, Turnover 2,519* 4,377.7* to economic activity in and the motorway was completed in €1,061.4m of value added. Thessaloniki, Patras, and Igoumenitsa, the fields of economic 2014. The Egnatia Odos motorway statistics (e.g. production, as well as with Greece’s northern Production value 2,311* 3,909.04* is considered as one of the largest The relatively high share of road employment) and in borders. other statistical domains. and most demanding infrastructure freight enterprises among the Value added at factor cost 472.2* 1,061.4* The “Transportation & projects in Greece. It has a length transportation and storage services Storage Services” NACE 2 The core Greek road network consists Personnel costs 271.4* 762.4* of 670 km, fully compliant with the sector population, combined with the economic activity includes of more than 2,145 km of motorways, the following activities, in latest European motorway quality corresponding lower share in value the majority of which have been Wages and salaries 213.5* 604.5* addition to the road freight and safety standards. added, indicate that the average transportation sector: expanded or upgraded in conformity size of enterprises (in value added Number of persons employed 36,234 98,632 passenger transport, rail with the strictest European motorway • Several high-quality auxiliary routes transport, water transport, or employment terms) was below standards. Furthermore, an additional connect Egnatia Odos to important Turnover per person employed 69.5 44.4 air transport, transport average. Indeed, the road freight via pipelines, warehousing 500 km are under construction80,81. logistics locations and ports in transportation subsector is dominated Apparent labour productivity and support activities for Northern Greece, as well as to the by very small enterprises, when (Gross value added per 13 10.8 transportation, postal, and Albanian and Bulgarian borders. courier activities. The PATHE motorway compared to those that operate in person employed) • The concession tender for the other sub-sectors; especially the very Number of persons • The oldest motorway of the country, operation, maintenance, and 2.2 1.9 large enterprises operating in the employed per enterprise the Patras-Athens-Thessaloniki- utilization of Egnatia has not yet postal services, as well as in the air, Evzoni motorway, also known as been officially launched, due to *in thousand € Source: Eurostat, EY analysis water and rail transport sub-sectors. “PATHE (E75)”, is the main road delays in the procedure. According to corridor of the Greek network, HRADF, one bid was submitted on 11 vertically interconnecting the two December 202082. The Greek TEN-T road network largest cities of Greece: Athens in the south, and Thessaloniki in the The Ionia Odos motorway • The Orient / East-Med (OEM) • Another EU “Motorway of the • Some important projects are north. Corridor is one of the most important Sea” interconnects Cyprus with currently funded by the EU, under • The PATHE motorway also • The Ionia Odos motorway, having EU corridors, since it connects Greece and, consequently, with the the CEF program, aiming to upgrade constitutes the backbone of the an approximate length of 196 km, critical European maritime interfaces European core network. critical multimodal links and cross- Greek part of the TEN-T network. runs across Western Greece from the

in North and, mainly, Southeast border connections. This north-south road axis runs along north to the south, interconnecting Europe, to the major Central the east coast of the Greek mainland, the ports of Patras, Astakos, and Igoumenitsa. European industrial centers and Komotini also linking the two main Greek ports logistics markets. Kavala of Piraeus and Thessaloniki to the • Passing through all the major urban • The biggest part of the corridor’s national borders in Northern Greece and rural centers of Western Greece, Alexandroupolis such as Ioannina, Arta, Agrinio, and road infrastructure is allotted to Kozani Thessaloniki – specifically the ones with North Macedonia, in the town of Evzoni. Patras, the motorway contributes to Greece (1,245 km or 26% of the Ioannina total road infrastructure). The • Several parts of the motorway have the wider development of the area country’s two largest ports, those Larissa been largely upgraded to the most by improving access to major tourist and archaeological sites. of Piraeus and Thessaloniki, are the Volos modern motorway standards and two main maritime interfaces of the Igoumenitsa new sections have been constructed OEM corridor, connecting Asian and Lamia over the last 13 years. The Kentriki Odos motorway Middle Eastern ports to the economic • Kentriki Odos (Central Greece and logistics centers in Central Patras The Egnatia Odos motorway Motorway) is a modern two-lane Europe. Athens motorway, which, upon completion, • The Egnatia Odos motorway • The corridor also extends across Tripoli will feature a total length of 238 km, crosses Northern Greece, linking the Ionian and Adriatic Seas to the and will connect the eastern and the Greek eastern borders with Italian ports, via the two Greek ports western part of Greece, currently Kalamata Turkey to the country’s western of Patras and Igoumenitsa in Western separated by the Pindos mountain borders in the Adriatic Sea. The Greece. This EU “Motorway of the range. motorway constitutes a vital road Sea” interconnects the OEM Corridor with the Scandinavian-Mediterranean Chania 80. Six major motorway projects underway in Greece during the next 5 years, tornosnews.gr, EU Corridor, which links Italy to 15 February 2019 Heraklion 81. Final Transport Plan Report, National Transport Plan for Greece (NTPG), June 2019 Central European countries. 82. UPDATE 2-Greece gets one bid for Egnatia Odos motorway lease, reuters.com, 11 December 2020

60 61 The Olympia Odos motorway • By connecting the two main Greek • Olympia Odos is a strategic between the port of Patras and road corridors of the PATHE and motorway with a total length of various Italian ports (e.g. Brindisi, Egnatia Odos motorways via central 202.3 km, which connects Athens Bari, Ancona, Ravenna, and Venice). Greece, the new road will reduce and the port of Piraeus to Western • Within the last eight years, several current travel time from Athens Greece and, most importantly, to new motorway sections were and the Piraeus port to the port of the port of Patras in the Ionian Sea. constructed, while existing ones saw Igoumenitsa, by more than 40%, The motorway accommodates the some upgrades, with the scope of providing a new and modern trans- majority of international road freight modernizing the network, reducing regional and international road movement toward Central European travel time, and improving comfort freight corridor. countries, via the Ro-Ro services and safety.

BULGARIA Egnatia Odos NORTH MACEDONIA

Kavala Alexandroupolis ALBANIA Thessaloniki

Aegean Motorway Igoumenitsa

Kentriki Odos PATHE Ionia Odos

Nea Odos The future Athens Today, the country features a strategic road network, as well as natural continuation of the Ionia complete and functional road network. a number of sectional upgrades of Odos motorway, for which funding is What is now needed are additions regional and local roads. still being sought. Moreas to complete and enrich the existing • The Attiki Odos expansions (still Olympia network. It is worth mentioning that Projects are funded under the 2014- under study): these projects would Odos the island of Crete is going to see the 2020 Partnership Agreement between cost about €1.5b and will create completion of the Northern Road Axis Greece and the EU and / or exclusively an integrated motorway network (VOAK), a planned 200 km motorway by national funds. Completion of these that we should be able to witness, Notes: running along its north coast, in the investments is anticipated before in its full form, by the middle of this 1. PATHE consists of three interconnected following years. VOAK will connect 2027. The five main expansions, three decade. motorways: the Nea Odos and the Aegean four major port cities (Chania, of which were included in concession motorways, as well as a part of the Olympia Rethymno, Heraklion, and Aghios contracts of the previous decade, are: Additionally, a major pending project Odos motorway (up to Patras) Nikolaos), two existing airports • Patra-Pyrgos (Olympia Odos – 75 is the completion of the Aktio-Amvrakia 2. Attiki Odos is not depicted in the map, (Heraklion and Chania) and one km): the natural continuation of axis (48.5 km) – essentially a branch of since it is the urban motorway of the airport currently under construction the Olympia Odos motorway, which the Ionia Odos motorway to the west. greater metropolitan area of Athens 83 (Kastelli) . The Kastelli airport will be entered its construction phase in ready in 2024-2025 and will replace 2018. It is worth noting that the country the Heraklion airport (please see • Lamia-Xyniada (E65 – 32 km): the features an excellent complementary chapter 4). The extensive, brand-new road network consists of the following motorways: southern part of the Kentriki Odos network of expressways which, motorway, for which construction along with the motorways, can take Over 500 km of new roads (highways works will begin in 2021. someone virtually everywhere. Today, • The Nea Odos and Ionia Odos Motorways (377.1 km) • The Olympia Odos Motorway (Patras-Corinth-Athens – and bypasses), important improvements, Greece has more than 2,145 km • Trikala-Egnatia (E65 – 64 km): the 202.3 km) and rehabilitations are currently of covered motorways, placing the • The E65 Central Greece Motorway (Athens-Thessaloniki northern part of the Kentriki Odos under implementation across Greece, country in a very high position among corridor and Domokos-Trikala in Thessaly – 136.5 km) • The Moreas Motorway (Corinth-Tripolis-Kalamata and a motorway, for which there are also under the supervision of the Ministry the EU ranks (12th), due to its dense • The Aegean Motorway (Central Greece-Thessaloniki – branch to Sparti – 205 km) good signs regarding its funding. of Infrastructure and Transport. road network84. 263.7 km) • The Rion-Antirrion Bridge (3.5 km) Investments include elements of the • Ioannina-Kakavia (60.1 km): the • The Egnatia Odos Motorway (Igoumenitsa-Thessaloniki- • The Attiki Odos Motorway (Elefsis-Athens Airport and Greek borders with Turkey, and the Vertical Axes of the Hemyttus Ring Road – 70 km) 83. Greek government seeking interest in US$1.6 billion road projects in Crete, infrappworld.com, Egnatia Motorway, connecting Egnatia with the borders of 21 June 2018 Albania, North Macedonia, and Bulgaria – 887.2 km) 84. ΥΠΗΡΕΣΙΕΣ ΔΙΑΜΕΤΑΦΟΡΑΣ 2020, ICAP Group, 2020

62 63 Greece has 45 airports, 15 of which shows signs of development in the However, air cargo transportation are international, 26 are domestic and Greek tourism industry and in the is rapidly expanding, especially in four are municipal. seasonality of the regional airports, Europe. Between 2017 and 2018, which successfully withstood the international intra-EU and extra-EU The “Eleftherios Venizelos” Athens collapse of five air companies flying transport in Greece recorded a growth International Airport (AIA) is, by to Greece. The airports of Mykonos, of 10.1% and 5.9% respectively89. far, the predominant Greek airport, Aktion, and Mytilene, recorded the As the importance of international in terms of both freight volumes biggest percentage growth, with 8.9%, air transport is growing, there are and passenger traffic. AIA serves 7.2% and 4.1% respectively86. significant opportunities for Greece not only the Greek capital, but also to emerge as Southeast Europe’s Air freight transport the whole Attica region. Moreover, Planned investments provide gateway for air cargo traffic, providing “Eleftherios Venizelos” is emerging as tremendous growth potential for a real alternative to congested The ever-increasing passenger traffic drives air freight volume an important passenger and logistics the airports, as well as for Greek hubs worldwide. Initiatives like the hub for Southeast Europe, being the tourism and the local development recent cooperation between the recovery in the Greek airports. central transfer point for connecting of the respective islands and cities Athens International Airport and Europe to the Middle and Far East. throughout Greece that feature such the port of Piraeus – the so-called 4 facilities. “Seanairgy Project” – contribute Besides AIA, many of Greece’s other to the development of Greece as airports are undergoing significant While 2019 was a great year for Greek a major regional logistics hub that infrastructure upgrades, while, at airports, 2020 was terrible, due to the interconnects Europe with the Middle the same time, based on the national pandemic’s impact. Up to November, East, Africa, and East Mediterranean. transportation master plan, there are the traffic at the 14 Greek airports provisions for the construction of new operated by Fraport Greece was down The rapid growth of passenger traffic ones. by 71.1% compared to 201987, while, through Greek airports, before according to the Greek Civil Aviation the onset of the global COVID-19 In addition to operating, managing Authority, overall traffic at all Greek pandemic, and the establishment of and developing 14 of the country’s airports decreased by 69.3% in 2020. new international air connections via regional airports over the four The travel restrictions imposed in the “Eleftherios Venizelos” Athens decades since the completion of the Europe, Greece, and the rest of the International Airport, create promising privatization process in December world, have resulted in a dramatic opportunities for air cargo services as 2015, Fraport Greece had committed decline across all relevant statistics. well. to invest about €330m (an amount At the same time, IATA has released later readjusted at €440m) in data, according to which, in November, The Kastelli airport improving and expanding these the global freight markets witnessed a In 2018, the Ariadne Airport Group – airports by April 2021. These works 6.6% decrease compared to 201988. a joint venture between the Greek were completed ahead of schedule, firm “GEK Terna” and India’s “GMR in January 202185. These regional Greece as Southeast Europe’s Airports Limited” (GAL) – was airports are split into two categories: awarded the concession contract for three mainland and 11 island airports. air freight transportation the construction of the new Kastelli Mainland airports include Aktion, logistics hub airport at Heraklion, in Crete, and its Kavala, and Thessaloniki. The 11 The role of air transport in freight operation for 35 years. Additionally, island airports are in Kerkyra (Corfu), transportation is less pronounced, the European Investment Bank Chania (Crete), Kefalonia, Kos, when compared to the other means (EIB) loaned €180m to Greece for Mytilene (Lesvos), Mykonos, Rhodes, of transport, due to its expensiveness this project. The Group is bound Samos, Santorini, Skiathos, and in terms of tonne-kilometer. For this to complete the project – which is Zakynthos. reason, air freight is considered to expected to cost €517m – within 60 be highly competitive, primarily for months. The Kastelli airport is set to 2019 was a special year for Fraport the long-distance transportation become the second biggest airport in Greece, taking into consideration that of relatively lightweight, valuable the country, with an annual capacity more than 30m passengers passed goods or for the immediate and of more than 8m passengers90. It through the 14 regional airports it fast transportation of delicate / is reported that the airport could operates. The company transported fragile goods. As a result, air freight become a key hub for tourism and about over 30m passengers, in transport in Greece has a share of ca. transportation, and bring great comparison to 29.87m in 2018, 35% of international trade in terms of benefits to the area and its economy91. marking an increase of 0.9%. That value, but only 1% in terms of weight. years’ (2019) marginal increase

85. Fraport Greece: Έτοιμα τα 14 αναβαθμισμένα αεροδρόμια, protothema.gr, 10 February 2021 86. 1st Infrastructure and Transport Review 2018-2019, metaforespress.gr and ypodomes.com, 2019 87. AIA, Fraport Greece Airports Passenger Traffic Hits Low in November, news.gtp.gr, 11 December 2020 88. Air cargo demand improves in November, capacity remains constrained, tornosnews.gr, 11 January 2021 89. Air Transport Traffic, Eurostat, December 2019 90. Crete to Get New Airport: Works at Kastelli Begin, news.gtp.gr, 11 February 2020 91. Ibid.

65 Works include the construction day, upon the airport’s operation. The Development of air freight freight numbers amounted to 112,225 surpassing intra-EU for the first time On the other hand, within the same of a 3.2 km-long runway, capable terminal building will be five stories transportation in Greece tonnes. However, in 2019, Greece in 2018. The proportion of Greek reference period (2008-2019), there of handling commercial aircraft high, with a total area of 72,000m2, managed to attain the numbers of air freight that was transported to was a remarkable shift in the split of (including Airbus A380 jet airliners), of which, 13,000m2 are intended Approximately 105,398 tonnes of air 2008 (pre-crisis levels), reaching a or from other EU airports within the air freight that arrives in the Greek a 23-meter parallel taxiway (with for commercial use, and 1,100m2 freight were carried through Greek total of 105,398 tonnes. reference period of 2008-2019, was airports, compared to the freight that 93 a provision for the construction dedicated as a permanent exhibition airports in 2019 . 2015 marked the in the range of 48%-61%. departs from them. of a second taxiway to facilitate space92. first year that an increase in freight Concerning the type of air freight independent operation), airside volumes was observed, following the traffic, international air freight The split between national and From only 40% in 2008, the share of facilities (including a cargo terminal At the same time, due to the onset of the financial crisis in 2008. transport has by far the largest international air freight transport air freight that departs from the Greek building and an apron area capable construction of the airport, several In fact, between 2008 and 2015, share in total quantities of goods did not vary considerably within the airports − in international or national of initially housing 27 aircrafts), other key infrastructure projects, the quantity of goods transported transported through the Greek period of the Greek recession. flights − reached the value of 51% 19 passenger gates, as well as a including the completion of the via air in Greece (both domestically airports, in the range of 90%. in 2015 and 57% in 2019, showing commercial area within the main VOAK road axis and other peripheral and internationally) was dramatically Intra–EU air traffic was the most International air cargo is dominating considerable growth in the significance terminal building, which will have the roadway networks, as well as water reduced by 44%, as a result of the important component of air freight air freight transport, with more than of outbound air freight. capacity to accommodate between and sanitation works, are in the Greek sovereign debt crisis. Just transportation in Greece up to 85% of total cargo every year since 57,500 and 65,000 passengers per pipeline. before the financial crisis, in 2008, air 2017, however percentages are split 2008, peaking at 91% in 2015 and between intra- and extra-EU in the standing at 88% in 2019. last two years, with extra-EU traffic

Air freight transport in Greece (in tonnes) Split of air freight volumes per direction of shipment Total air freight International air transport National air transport Departures from the airport 120.000 100% Arrivals at the airport

90%

100.000 80% 40% 70% 57% 80.000 49% 51% 43% 60% 60%

60.000 50%

87% 87% 87% 87% 88% 88% 90% 91% 87% 85% 86% 88% 40% 40.000 30% 2008 2015 2019 20% 20.000 Source: Eurostat, EY analysis 10% 13% 13% 13% 13% 12% 12% 10% 9% 13% 15% 14% 12% 0 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Source: Eurostat, EY analysis

Intra-EU vs extra-EU air freight transport in Greek airports

Extra-EU Intra-EU

44% 44% 42% 40% 39% 40% 39% 42% 44% 48% 52% 50%

56% 56% 58% 60% 61% 60% 61% 58% 56% 52% 48% 50%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: Eurostat, EY analysis

92. Construction of New International Airport in Crete Set to Begin, greekreporter.com, 13 February 2019 93. Cargo Uplift Development 2019, Athens International Airport (AIA), 2019

66 67 The Athens International Airport is the largest air freight transporter among all Greek airports More than 88.3% of the total air freight volumes occurred within the first years The AIA also aims to bring all in 2019 passed through the “Eleftherios of the Greek economic recession, stakeholders under one roof, by The Athens International Airport, airport functions as an important hub with jetways, ramps, new VIP and Venizelos” Athens International Airport. between 2009 and 2013. However, air establishing a local cargo community officially operating since March 2001, for Southeast Europe and is the central lounge areas, shopping and dining In the same year, the airport recorded freight volumes in the AIA have been through an efficient communication is a modern facility with state-of- transfer point for people travelling to areas, etc. The project is estimated to an increase of 1.4% in total national strongly recovering year-on-year. platform: the Airport Cargo the-art cargo infrastructure, and has Europe from the Middle East. cover an area of 100,000m2, including and international air cargo transport, Community Committee (ACCC). The earned numerous international awards the expansion of the satellite station. reaching a total tonnage of 93.3 In 2019, the number of total freight ACCC was established in 2003, aiming and distinctions in recognition of the The AIA has begun its expansion and The AIA aims to be able to handle thousand tonnes. in the AIA was 85,790 tonnes, while at strengthening and enhancing the high quality of services it offers. Also renovation plan. These investments around 30m passengers annually in the number of total mail was 8,207 communication among all members known as “Eleftherios Venizelos”, are expected to cost up to €700m. The the short-term, and 50m by 204094,95. Before the beginning of the economic tonnes, marking an increase of 1.4% of the cargo community, promoting named after the distinguished Greek expansion is another big investment in crisis, “Eleftherios Venizelos” reached and 2.6% respectively, compared to synergies inside and outside the statesman, the AIA has two terminals Greek airports, after the completion In the European Union, the total its peak in total air freight transport in 2018, when the total freight was airport’s fence and reaching joint and is a growing hub for travels to of the renovation works at the 14 number of passengers travelling by 2008, with 122,000 tonnes. A severe 84,576 tonnes and total mail stood at decisions on new projects and Asia and the Middle East. regional airports operated by Fraport air in 2019 reached 1,034m, 3.8% and sharp drop of 38.7% in freight 7,997 tonnes99. initiatives. Greece, indicating the growth of the up from the previous year. In 2019, The AIA serves not only the Greek sector and the opportunities it brings Paris’ Charles de Gaulle airport capital, but also the whole of Attica, for the economy. became the largest in the EU in terms Greece’s most densely populated and of passengers, freight and mail. economically strongest region. Having In detail, the AIA’s expansion and The AIA is ranked 31st among other immediate access to the railway and to renovation project includes a new European airports in freight and mail the core national road network, via the terminal, which is planned to include, transporting, and 23rd in passengers in three-lane Attiki Odos motorway, the among others, new gates equipped Europe96.

The Athens International Airport, • One “front-line” air mail center. about 7m passengers per year. The having a total operational floor area • One “front-line” station for terminal extension is planned to cost 2 of 30,000m , can handle 275,000 veterinary and phytosanitary €500m, while the total investment is tonnes of general and special cargo, inspections. expected to reach €700m (terminal annually. More specifically, the plus bridges, airplane hangars, VIP • One “second-line” cargo community existing cargo infrastructure consists lounges, stores, etc.). In the long term, administration building. of: the masterplan includes a study for • Three independent “front-line” In January 2020, the new AIA the construction of another terminal, cargo terminals and one distribution masterplan was approved by that will allow for 50m passengers center, with a total operational area the Civil Aviation Authority. The annually by 204097. of 30,000m2 and a total mezzanine masterplan’s main goal is for a new office area of approximately terminal to be constructed, which 7,000m2. is expected to allow an increase of

In 2019, Greek exports reached a total Main types of air-cargo handled at the of US$37.8b, ranking Greece the 57th Athens International Airport, include: exporter globally. Over the last five • Ship spare parts years, Greece’s exports decreased by • Pharmaceuticals 4.1%. • Fresh fish The most important destinations • Foods for Greek exports are98: 65% • Perishables Europe • Electronics / machinery / parts 6.5% 4.8% • Jewelry • High-tech products North Africa • Aluminum 21% America • Special cargo (live animals, 1.6% Asia dangerous goods, radioactive 1% materials, etc.) Latin • New premium products, such as bio America Oceania products

94. Long-awaited master plan for Athens International Airport greenlighted, tornosnews.gr, 28 January 2020 95. Passengers Traffic 2019, Athens International Airport (AIA), 2019 96. Air Transport Statistics, Eurostat, January 2020 97. Απογειώνεται η επένδυση των 700 εκατ. στο αεροδρόμιο της Αθήνας, businessdaily.gr, 22 January 2020 98. Greece Exports by Country, tradingeconomics.com, 2020 99. Cargo Uplift Development 2019, Athens International Airport (AIA), 2019

68 69 In 2015, the Fraport AG–Slentel Ltd. consortium was awarded the concession agreement Fraport Greece has completed at the airports of Aktio, Chania, completed in January 2021, ahead of for the operation of 14 Greek regional airports renovation and upgrade works at Corfu, Kavala, Kefalonia, Zakynthos, schedule and ready before the start of all 14 Greek regional airports it Mytilene, Mykonos, Rhodes, the tourism season of 2021102. manages and operates. By December Samos, and Skiathos. Kos, Santorini of 2020, works had been completed and Thessaloniki airports’ works were

In detail, the enhancements • 33% increase in the number of • 25% increase in the number of implemented per airport (in security check lanes (from 6 to 8) departure gates (from 4 to 5) alphabetical order) under Fraport • 50% increase in the number of Greece’s investment plan between Kos Airport (KGS) security check lanes (from 2 to 3) 103 2015 and 2021 , include: • New terminal • 201% increase in the total size of the Santorini Airport (JTR) Aktion Airport (PVK) airport, at 24,000m2 • 236% increase in total terminal 2 • Terminal expansion by 2,381m and 2 • 75% increase in the number of check- space, at 15,640m , by replacing refurbishment in counters (from 16 to 28) part of the current terminal and • 75% increase in the number of check- constructing a new terminal • 125% increase in the number of in counters (from 8 to 14) security check lanes (from 4 to 9) • 113% increase in the number of • 60% increase in the number of check-in counters (from 8 to 17) departure gates (from 5 to 8) Mykonos Airport (JMK) • 20% increase in the number of • Doubling the number of security • Expanding and remodeling the departure gates (from 5 to 6) check lanes (from 2 to 4) terminal – 50% increase in the total • 250% increase in the number of size of the terminal, at 13,350m2, security check lanes (from 2 to 7) The 14 Greek regional airports Chania Airport (CHQ) with the construction of a new managed and operated by Fraport • Expanding the security control area terminal area Skiathos Airport (JSI) Greece are divided in two clusters: • Reorganizing the apron area • 33% increase in the number of check- • 39% increase in the total size of the 2 Cluster A comprises of • 25% increase in the number of in counters (from 12 to 16) airport, at 9,511m the Thessaloniki, Kerkyra, departure gates (from 8 to 10) • 17% increase in the number of • 11% increase in the number of check- Kefalonia, Aktio, Zakynthos, • Doubling the number of security departure gates (from 6 to 7) in counters (from 9 to 10) Kavala, and Chania airports. check lanes (from 4 to 8) • 25% increase in the number of • 33% increase in the number of Cluster B comprises of the security check lanes (from 4 to 5) departure gates (from 3 to 4) Rhodes, Samos, Skiathos, Kavala Airport (KVA) • Doubling of security check lanes Mytilene, Mykonos, Santorini, • Terminal expansion by 2,029m2 Mytilene Airport – Lesvos (from 1 to 2) and Kos airports. (MJT) • Refurbishing and expanding the fire station • New terminal Thessaloniki Airport (SKG) The 14 regional airports have been renovated and upgraded between 2015 and 2021 • Reorganizing the airport’s apron area • New airport apron area • New terminal • 185% increase in the total size of the • Terminal expansion by 31,380m2, • On 14 December 2015, the The Fraport-led consortium had January of 2021101. During the 40- • 20% increase in the number of check- airport, at 7,185m2 including new landside access Fraport AG-Slentel Ltd. consortium initially committed to invest an amount year concession, Fraport is going to in counters (from 8 to 10) signed the concession agreement of €330m by 2021 (an amount that implement additional maintenance • 29% increase in the number of check- • 47% increase in the number of check- concerning the upgrade, was readjusted twice, to be finalized projects, in order to increase the Kefalonia Airport (EFL) in counters (from 7 to 9) in stations (from 30 to 44) maintenance, management, and at €440m), on top of the up-front capacity of the airports and make any • New terminal • 75% increase in the number of Rhodes Airport (RHO) operation of 14 Greek regional payment of €1.2b to the Greek required upgrade works. • 71% increase in the number of check- security lanes (from 4 to 7) airports. State. These planned investments in counters (from 7 to 12) • 13% increase in the number of check- • 50% increase in the number of (completed in January of 2021) aimed Fraport Greece’s major developmental in counters (from 40 to 45) • The consortium offer consisted of an • 100% increase in the number of departure gates (from 16 to 24) to upgrade the 14 regional airports works included building five upfront payment of €1,234b and an departure gates (from 3 to 6) • 13% increase in the number of annual payment of €22.9m for the in conformance with the most recent new passenger terminals in the departure gates (from 16 to 18) Zakynthos Airport (ZTH) • Doubling the number of security lifetime of the concession, annually IATA standards (Level C), as well as to Thessaloniki, Corfu, Kefalonia, check lanes (from 2 to 4) • 71% in the number of security check • Refurbishing and remodeling the adjusted according to the Consumer maintain them throughout the 40-year Kos, and Mytilene airports, but 100 lanes (from 7 to 12) current terminal Price Index (CPI). The predominant duration of the concession . also implementing modifications in Kerkyra Airport – Corfu (CFU) • 25% increase in the number of • Refurbishing the air traffic control objective of the transaction is other airports. This resulted in an 2 baggage reclaim belts (from 4 to 5) tower the upgrade of the airports in Fraport’s plan included projects increase of 100,000m in terminal • New terminal need of significant investments, a and developmental works in order size, compared to 2015, reaching a • Expanding the terminal by 10,294m2 • 33% increase in check-in counters 2 Samos Airport (SMI) development which has particularly to upgrade the airports’ facilities, combined total of 300,000m for all and remodeling the current terminal (from 15 to 20) aiming to improve the passengers’ 14 regional airports in 2021. • 19% increase in the total size of the important benefits for Greek • 27% increase in the number of check- • 150% increase in the number of travel experience and increase terminal, at 9,605m2 tourism and the local development in stations (from 22 to 28) security check lanes (from 2 to 5) of the respective islands and cities traffic. The works were announced • 40% increase in the number of check- • 33% increase in the number of throughout Greece. as finished ahead of schedule in in counters (from 10 to 14) departure gates (from 9 to 12) 100. Fraport Greece’s Development Plan for the New Era at the Greek Regional Airports, fraport-greece.com, 2020 102. Έτοιμα για “απογείωση” 11 αεροδρόμια της Fraport Greece, capital.gr, 16 December 2020 101. Fraport Greece: Έτοιμα τα 14 αναβαθμισμένα αεροδρόμια, protothema.gr, 10 February 2021 103. Fraport Greece’s Development Plan for the New Era at the Greek Regional Airports, fraport-greece.com, 2020

70 71 Greek airports’ passenger Athens International Airport Makedonia airport passenger traffic traffic rose to 65.4m in At this point, the increased (7,751,014 in total, +0.3%). At the attractiveness of Athens as a popular Greek airports as a whole, traffic 2019, setting a new annual city-break destination, supported by hit a new record with a number of Domestic passengers 7,000,000 International passengers record104 common actions of the AIA, entities 65.4m passengers in 2019 (up by 5% Total passengers of the Greek tourism industry, and the compared to 2018). local public administration, reflects 6,000,000 on every aspect of the “Eleftherios However, traffic percentage decreased Venizelos” airport, with the following by 75% in the first half of 2020, 5,000,000 distinctive examples: due to the COVID-19 pandemic and • From 2013 to 2019, the airport its disastrous effect on the tourism 4,000,000 105,106 marked an 105% increase in industry . passenger numbers (from 12.5m to 3,000,000 25.6m passengers). Thessaloniki airport • In 2019, foreign passengers / International traffic at Thessaloniki’s 2,000,000 tourists accounted for 6.4m, from airport rose over the last years. just 2.6m in 2013, recording an In 2018, domestic passengers 1,000,000 extraordinary 146% increase over have decreased by nearly 0.8%, this period, and a 12% increase in but international passengers have 0 comparison to 2018. increased by 11.8%, raising total 2016 2017 2018 2019 2020 • In 2019, a record 25.6m passengers traffic by 7.1%107. In 2019, the visited the Athens International number of domestic passengers at Source: Thessaloniki Airport Makedonia (SKG) Airport, surpassing the previous Thessaloniki’s “Makedonia” airport year’s traffic by 1.4m (+6%). This (SKG) was 2,164,242, recording a outcome was solely driven by the 7.3% decrease, while international large growth in international visitors passengers were 4,731,089, an Domestic flights for the SKG fell by 55,307, compared to 53,670 in 2017, number of passengers visiting the (17,822,979, +1.4m or +8.6%), increase of 8.6%. In total, passengers 4.8% in 2018; from 22,861 in 2017 an increase of about 3.1%. Thessaloniki airport dropped by 66.4% while growth in domestic visitors increased by 3.1% in 2019. to 21,764 in 2018. On the other in comparison to 2019, to 2,317,336. remained similar to past years hand, international flights recorded an In 2019, domestic flights in the SKG At the same time there were 24,966 8.9% increase, from 30,809 in 2017 were 20,665 and international flights flights in 2020, a 55.2% decrease to 33,543 in 2018. Total flights in were 35,065, totaling 55,730 flights. compared to 2019. the SKG in 2018 were estimated at In 2020, due to the pandemic, the

Makedonia airport flights

60,000

Domestic flights International flights 50,000 Total flights

40,000

30,000

20,000

10,000

0 2016 2017 2018 2019 2020 104. New record volume of traffic at Greek airports during 2019, tornosnews.gr, 15 January 2020 105. 1st Infrastructure and Transport Review 2018-2019, metaforespress.gr and ypodomes.com, 2019 106. Greek Airports: 75% Passenger Traffic Drop in First Half of 2020, news.gtp.gr, 21 July 2020 107. Traffic Development Overview, fraport-greece.com, 2019 Source: Thessaloniki Airport Makedonia (SKG)

72 73 The 14 Greek regional airports by 3% compared to 2018. Greek Although national transport sharply Passenger traffic at Greek airports operated by Fraport Greece recorded airports not only managed to declined by 26% in the 2009-2013 a slight increase of 0.9% in total withstand the consequences of the period, it has managed to recover, passengers in 2019, compared global and national financial crisis, recording an impressive growth of 44% 60,000,000 100% to 2018, attracting 30,150,737 but also substantially improved their between 2013 and 2015, exceeding 90% passengers. Domestic passengers performance, with an impressive 26% its pre-crisis levels, with more than 50,000,000 were 6,902,786, recording a growth between 2009 and 2015 – 7.4m passengers travelling from / to 80% decline of 0.9%, while international during the peak of the Greek economic Greece. This dynamic trend continued 70% passengers were 23,247,951, which crisis. in 2018, with a 10.9% growth and 40,000,000 79% 80% 83% 83% 85% 60% constitutes an increase of 1.4%, over 8m passengers in the first six 85% 82% 82% 83% 84% 85% compared to 2018. Intra-EU transport is the major months of the year. While domestic 30,000,000 50% component of the total air traffic in traffic grew slightly, there was a sharp 40% There has been a clear and significant Greece, representing more than 66% increase of 16.2% in the number of 20,000,000 upward trend in the number of of passengers travelling to / from international travelers. Additionally, in 30% passengers who travel by air via Greece, without any large fluctuations 2018, foreign nationals’ international 20% 109 10,000,000 the Greek airports, within the last throughout the years. Intra-EU arrivals grew by 25% . In 2019, 10% years. In 2018, air traffic through transport is followed by national traffic increased even more, with 21% 20% 17% 17% 15% 16% 18% 18% 17% 16% 15% Greek airports increased by 10.1%, and extra-EU transport, which share over 56m passengers using the Greek 0 0% compared to 2017108. In 2019, the similar figures, ranging between 15%- airports. 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 number of passengers increased 18% within the 2009-2015 period. Total transport International traffic Domestic traffic

108. Traffic Through Greek Airports Hits Historic High in 2018, news.gtp.gr, 18 January 2019 109. Athens International Airport undergoing expansion to keep up with high demand, greekcitytimes.com, 12 September 2018 Source: Eurostat, EY analysis

74 75 A comprehensive national The major accomplishment of this framework, as a result of the law was the removal of a series of red tape requirements and administrative Public sector support ongoing dialogue between the barriers concerning the establishment An investment-friendly and simplified administrative framework public and private sectors and operation of logistics installations – in particular, freight centers and In recent years, the public sector in for the development of intermodal logistics hubs in Greece. intermodal villages. Provided that the Greece has been in close collaboration land use is appropriate, and that the with the T&L industry, developing logistics installation is constructed 5 a long-lasting transformational and operated in conformity with the plan to support the sustainable applicable national legislation, there development of the logistics market is no need for a specific permit to be and international trade. The outcome granted by the competent authority. is highly promising, since it combines Law 4302/2014 establishes a investment planning and incentives Previously, the licensing of logistics modern and integrated legislation for operators, with a comprehensive installations used to be a time- framework for the logistics indus- legislation reform and long-term consuming and costly administrative try in Greece. To this end, the law commitments by policy makers, process, as well as a source of integrates, amends, repeals or / industry associations, and private uncertainty in planning and developing and replaces a series of relevant stakeholders. large logistics projects. These acts, such as: administrative barriers and risks Law 4302/2014 (“Setting logistics had reportedly led to the withdrawal • Law 3333/2005 with regards to issues and other provisions”), of foreign or local investors from the terms and conditions for the which was published in the Official important developmental plans in establishment of freight villages. Government Gazette of the Hellenic the logistics sector. Since the law Republic in 2014, constitutes one • Law 3892/2011 with regards to entered into force, the owner or the of the most important outcomes of the licensing of manufacturing operator of a logistics installation this approach. It is the result of the activities, including business is only required to notify the coordinated efforts and lobbying of parks and warehouses. competent authority, verifying that the Greek logistics industry, as well the installation conforms with the • Law 4014/2011 and Ministe- as of the technical support provided applicable national legislation. rial Decision 1958/2012 with by the World Bank. The law provides regards to the environmental a holistic regulatory framework that Moreover, the provisions of this law licensing of works and activities. explicitly defines the logistics sector explicitly regulate the facilitation of and its operational aspects as a investments for the development and distinct and independent economic operation of the two major intermodal activity, different from the industrial logistics parks of national importance, or commercial ones. Since there is namely Thriasio Pedio and the Gonos still limited international experience former military camp. in this specific field of regulatory interventions, the complexity and Taking into consideration these importance of the task has been legislative innovations, the new highly acknowledged by all national framework is considered by the stakeholders and international Greek logistics community to be organizations. a breakthrough, that has entirely transformed administrative procedures, Reducing red tape in logistics establishing a transparent, efficient, installations permits and modern framework for interested Law 4302/2014 is the main national investors and logistics operators. instrument regulating logistics operations in Greece, in an integrating approach covering transport, warehouses, urban logistics, and intermodal freight centers.

77 World Bank indexes The Distance to Frontier In greater detail, the improvement in the Trading Across Borders indicator Within the last five years, Greece has index, The World Bank, 2019 set is very impressive. In 2016, the significantly improved its international In 2019, Greece scored 68 points on organization substantially revised the ranking with regards to trade the World Bank’s Distance to Frontier methodology for this specific indicator facilitation and trade competitiveness. nd (FTD) index, occupying the 72 place. set – therefore, having a direct The positive results and progress In the past years, Greece scored 67 comparison with previous rankings is achieved over the past period are points from 2016 to 2018, occupying not possible. However, the set shows clearly depicted in several World Bank th the 64 place. that Greece has stabilized its position indexes. among the top performers. Greece scored The Logistics Performance Being able to trade easily across Index and its indicators, The the Greek borders via streamlined, World Bank, 2018 efficient, and digitalized procedures, points is of major importance for companies According to World Bank’s 2018 68 willing to either use Greece as their Logistics Performance Index (LPI), on the World Bank’s strategic logistics hub in Europe nd Greece ranked 42 among 160 Distance to Frontier index or get involved in trade with Greek th countries, rising from the 44 position organizations. in 2014 and the 47th in 2016. The LPI in 2019, occupying the nd is an interactive, perception-based, 72 place Facilitating trade and customs benchmarking tool, created to help (down from the 64th place in 2018) operations at the borders and the countries identify the challenges Greek ports, can considerably improve Several administrative In a very short time, Greece Other similarly important initiatives and opportunities they face in their customer service for both export made important progress in the are: performance in trade logistics, and The Ease of Doing Business and import activities. Efficient pre- burdens and market implementation of a trade facilitation • Incentives for the establishment what they can do to improve it, and index, The World Bank, 2020 customs and customs clearance inefficiencies are being strategy, especially toward the of Authorized Economic Operators is based on expert assessments from procedures can have a great impact simplification of customs and pre- (AEOs; from six AEOs in 2010 and Since 2012, Greece has improved its logistics professionals. in eliminating delays, reducing constantly removed, to customs procedures. By 2014, a 37 in 2013, to 114 AEOs certified in ranking in the World Bank’s The Ease administrative costs, and improving significant percentage of the regulatory 2016 and 188 in 2020)110. Greece ranked of Doing Business index, ranking 79th facilitate external trade supply chain predictability. Following requirements were analyzed and among 190 countries in 2020, having, • Development of suitable processes the global economic crisis, as well as and international logistics simplified, and concrete steps were however, regressed by 14 positions and capabilities to effectively nd the consequent downturn of the Greek taken toward the integration of compared to 2015, when it held its operations in Greece. implement a VAT relaxation regime, economy, Greek authorities committed information flows within a paperless record-high 65th place. according to Article 42 on customs 42 themselves to implementing a simple, customs system. As mentioned earlier, procedures. among 160 countries in yet comprehensive national trade this progress has been recognized by • Integration of ICISnet with other the World Bank’s 2018 Greece ranked facilitation strategy. all stakeholders, evidenced by several sources of information. Logistics Performance international studies and reports. th • Implementation of the Union Index Customs Code (UCC) in early 2020. Trading across borders 79 • Α Commission Implementing From 2012 to 2014, Greece’s among 190 countries in the emerges as a major Regulation amended the procedural competitive position in the Logistics competitive advantage for rules, to reflect the gradual Performance Index improved by World Bank’s 2020 Ease of Greece deployment of Import Control 25 positions. Moreover, results for Doing Business Index System 2 (ICS2 – Articles 182 to customs in 2018 were overwhelming, (down from the 65th place in 2015) In fact, several trade facilitation 189), in order to determine which with Greece climbing 52 positions initiatives have been implemented in customs offices are competent th nd (from 94 to 42 ), evidencing the Greece within the last seven years, to release certain low value extensive improvement in customs with great emphasis placed on the consignments into free circulation operations. simplification of customs operations, (Articles 218, 220, and 221), and coordination among government introduced some procedural rules control agencies, as well as on for the use of EU / NATO Form 302 the digitization and automation of on the movement of military goods information exchange. (Article 207, 220a, 220b, 285, 286, and 287). The new rules entered into One major breakthrough was the force on 20 July 2020. implementation of the new Integrated Customs Information System (ICISnet) • Design and implementation of the in 2013, which largely facilitated the NSW. electronic submission of customs declarations, as well as the integration of relevant stakeholders.

110. Authorized Economic Operators, Eurostat, 2020

78 79 Five Free Trade Zones and Greece’s five Free Trade In addition to the FTZs, Free Trade Zones’ advantages The reformed national in Greece but is due to the destination member country. The There are many advantages and legislation ensures the several customs warehous- Zones provide clear benefits customs warehousing same applies to non-Community incentives to companies operating in to importers and shippers services are provided by harmonized implementation goods that are imported from es have been established the FTZs, which can be summarized as of VAT exemption provisions, outside the EU, which will be Four out of the five total Free Trade the majority of the Greek follows: in Greece, where import Zones (FTZ) in Greece have been under Customs Procedure 42. processed before they are re- logistics providers. • Improved cash-flow, since no duty 111 organized in the major Greek ports The legislative framework which exported outside the EU . duties, VAT, and other im- payment is required on merchandise of Piraeus, Thessaloniki, Heraklion In addition to the FTZs, a large regulates the application and brought into the FTZ, unless and port charges do not apply (in Crete), and Astakos (in Western percentage of the 3PL providers and control of Customs Procedure 42 Customs warehouses until the goods enter the Greek Greece), while the fifth one is located freight forwarders in Greece have concerning the VAT relaxation A customs warehouse allows for goods of foreign origin. territory or are removed. in Central Greece, at the industrial and been authorized to operate customs regime, was adopted a few years traders to store goods, with logistics center of Boeotia. warehouses. • Ability to re-export goods from ago. The new framework has put suspension of duty or import VAT within the FTZ, without paying in place clear rules and procedures payments. Goods that are moved Non-Community goods may be These customs warehouses have been customs duties. for the efficient and harmonized from another EU country in duty application of the VAT relaxation brought into these free zones without organized either adjacent to the major • Transit goods may be held in the suspension, can also be stored in regime by customs offices and payment of import duties, VAT, or international Greek ports, or inside FTZ, free of bond. this type of warehouse. relevant stakeholders across the other import charges. Additionally, the main logistics centers of Thriasio Pedio (1) and Oinofyta (5) around • Ability to track and monitor country. The updated legislative Once the goods leave the such goods stored in the FTZs are warehouse, duty must be paid, Athens, as well as at Sindos and inventory more closely, also leading framework is also supported by considered as not yet imported into unless they are re-exported or Kalochori (2) in Thessaloniki. These to the improvement of compliance a set of documented guidelines the Community’s customs zone, until follow another customs procedure. types of warehouses can also support and quality control. and detailed descriptions of the they are released into free circulation. VAT relaxation process, including, traders, for example, in cases where: • If goods are defective or damaged, The amount of work or processing Import and export declarations need but not limited to, an analysis of no duty payment is owed while they allowed on goods held in to be logged only when the goods • Goods imported from outside the EU the new legislation provisions, are being tested, repaired, or stored warehouses is limited, essentially are released into free circulation. In are liable to customs duties or import control activities and procedures, in the FTZ. to keep them preserved, with a addition, if the foreign merchandise VAT. infringements of documentation view to subsequent distribution. is exported or transshipped from the • Goods are moved from another EU • Repackaging, sorting, and relabeling requirements, etc. However, it is possible to process free zone, no customs duty is ever operations may be carried out while country in duty suspension. goods at the premises of a due. the goods are in the FTZ. Customs Procedure 42 is the • The final destination of the goods customs warehouse, under inward • Documents related to the storage or regime an importer follows in when they arrive in Greece is not order to obtain a VAT exemption, processing or processing under known in advance. transfer of goods within the zones, customs control. are also free from stamp taxes. when the imported goods will be • Import licenses or paperwork have transported to another EU member Greece’s Free Trade Zones been delayed, or a duty-relief • Complete VAT-free import of foreign country. VAT is not paid anywhere quota is expected (for example, for origin goods which are designated agricultural goods). for another EU member country.

• Another customs procedure is more 111. European Commission, ec.europa.eu website, 13 December 2011 favorable. For instance, when the 2 Thessaloniki goods are used or consumed within the free zone.

4 Astakos 5 Boeotia 1Piraeus

3 Heraklion

80 81 International trade and 3PL providers and freight This trend constitutes a major forwarders take advantage improvement in the simplification customs operations are of international trade in Greece – in largely simplified with of AEO privileges in customs particular, in the port of Piraeus – since facilitation it has helped companies considerably the appointment of reduce the required paperwork and the In recent years, a significant number of actual inspections on their reliable and experienced percentage of 3PLPs, airlines, and customs clearance procedures. Apart shipping companies in Greece, are authorized economic from this, AEOs are a core element in certified as AEOs. AEOs benefit enhancing the security of the supply operators. both from simplifications provided chain and in minimizing customs by customs rules, and / or from penalties and risk exposure. facilitations regarding security- and safety-related customs controls, However, the current number of depending on the type of certificate existing AEOs can be considered they obtain. insufficient, if we take into account both the estimated growth of A critical mass of 188 AEOs actively container throughput in Piraeus and operated in Greece as of October Thessaloniki, as well as the anticipated 2020, the majority of which are 3PL increase in transit flows toward companies or freight forwarders Eastern and Central Europe. that were certified more than three years ago. These economic operators have proved that they implement Status of AEO certificates in satisfactory management systems and follow appropriate safety and security Greece (as of October 2020) standards, in relation to customs 116 controls.

The Authorized Economic 72 Operator concept is one of the main elements of the security amendment of the Community Customs Code. An AEO can be 0 defined as an economic operator that is deemed reliable in the AEO-C AEO-F AEO-S Advantages of the context of its customs-related operations, and, therefore, As of October 2020, 188 companies AEO certificate is entitled to enjoy benefits in Greece operated as certified • Easier admittance to customs simplifications. throughout the EU. Economic AEOs112: • Fewer physical and document-based controls, leading to reduced operators can apply for an • 72 have opted to be authorized only inspection time and lower costs. AEO status in order to either for various customs simplifications have easier access to customs (AEO-F). • Prior notification in case of selection for physical or customs simplifications or / and to be control. • None opted to benefit from in a more favorable position to facilitations related only to security • Priority treatment at customs clearance. comply with the new security and safety (AEO-S). • Fewer delayed shipments, improved planning, and reduced theft requirements. • 116 benefited from the various and losses. simplifications specifically provided • Improved relations with customs and other government Ten years after the certification of for under the customs legislation, authorities. the first AEO in Greece, Greek 3PL and from facilitations related to providers and freight forwarders have • Possibility to request a specific location for customs controls; customs controls on security and established themselves as reliable most of the transactions may be implemented in-house by the safety (AEO-C). logistics and trade facilitation partners AEO and not in-customs. for major international shippers, • Possibility to fast-track shipments through special safety and manufacturers, exporters, and freight security procedures. forwarders. • Opportunity to combine the import declaration with the declaration summary. • Less and more privileged document controls or examinations. • Possibility of making declarations with incomplete documents.

112. Ibid.

82 At this point, to better e collected the views of the rail network, coupled with a understand the total effect a sample of 142 leading general upgrade and optimization Evaluating Greece Wrepresentatives from at Thessaloniki and other regional of the Greek logistics hub, companies operating in key sectors of airports, are required. the Greek economy, through a survey we conducted an evaluation Road infrastructure which illustrates its strongest conducted between 1-22 June 2019. as a logistics hub Based on the findings of our survey, Road infrastructure has developed 6 and weakest links / knots. we present an evaluation of the substantially over the last years. In order to conduct this strongest and weakest links / knots However, respondents maintain that better pricing and incentives for road evaluation, we collected the of Greece’s logistics hub. Overall, the Greek logistics hub, leaving aside the freight would optimize the country’s views of a sample of leading improvements in the Piraeus port and road infrastructure. representatives from several road infrastructure, still has a long sectors of the economy, who way to go. More specifically: Road transport answered several questions Road freight transport has ways to go Port infrastructure and before becoming a strong link of the regarding the accessibility, operations logistics hub, with respondents being quality and connectivity more optimistic for road transport The Piraeus port has set the development. Nevertheless, they of key infrastructure of foundation for the Greek logistics hub suggest that better collaboration with Greece’s logistics hub. We to achieve excellence. The Thessaloniki ports and the rail network, coupled port constantly progresses and is then proceeded to analyze with a focus on transportation expected to become a strong knot operations, are necessary. their answers and came to of the hub. On the other hand, the some conclusions, which regional ports in Greece have a long we present in the next few way to go. Sea transport pages. Sea freight transport appears to be Rail infrastructure and a strong link of the logistics hub. However, there is a need to create a operations link between various commercial ports Rail infrastructure in Greece is and cargo ships / Ro-Ros. facing many challenges. Rail freight operations appear to be the weak link of the logistics hub, while it is evident Warehousing: Infrastructure, that extended railway lines and better services, 3PL / 4PL connectivity with ports, logistics 3PL / 4PL development remains parks, and the European rail network stagnant, with no further progress are required. observed, so far. Respondents noted that the development of logistics parks Air freight infrastructure and is required, while there is also a need for more synergies / collaborations operations and at a faster pace. Air freight infrastructure and operations appear to be a strong link of the Greek logistics hub. However, Customs infrastructure and respondents perceive that better services connectivity and collaboration with Customs have still many challenges the ports and the railway are required to overcome. Moreover, respondents for the Athens International Airport. suggest that digitalization is required, Additionally, respondents suggested to decrease bureaucracy and simplify that improvement of connectivity processes for all stakeholders. and collaboration with ports and

85 A. Demographics B. Port infrastructure and operations

Our survey was conducted between Companies surveyed represented a Respondents were asked to provide Piraeus 1-22 June 2019 and covered a sample wide range of sectors, including 37% their assessment of infrastructure, The Piraeus port has set the (7%-14%) describe them as “low” or in order to be considered a global of 142 leading representatives from from consumer products, 14% from operations, and future developments foundation for the Greek logistics hub “very low”. By contrast, intermodal competitive maritime center. companies operating in key sectors of transport and 3PL, and 9% from retail. for Greek ports, rail, air freight, road to achieve excellence. With regard to connectivity with other transport the Greek economy. and sea transport, warehousing, and different aspects of the infrastructure modes is seen as “low” or “very low” The most influential factors The majority of respondents either customs. and operations of the port, slightly by 40% of respondents, with 28% downgrading the Piraeus port are: More than three quarters of the trade (74%) or provide services (72%) less than half of the respondents saying it meets standards and only 2% the lack of a stable regulatory companies surveyed have been in within the above sectors, while 60% believe that they meet standards. that it exceeds them. environment, the lack of access operation for more than 20 years, 15% are manufacturers. These include availability and capacity to financial institutions, poor for 10-19 years and 8% for less than (45%), quality of infrastructure (47%), Overall, results show that port infrastructure, and tax issues. These 10 years. quality and reliability of services (43%) infrastructure and operations in factors hamper further progress in and efficient / effective collaboration Piraeus qualify, when it comes to the the Piraeus port, as already evidenced (45%). Around 20% feel that these most crucial characteristics, embracing by EY’s 2017 study, “Re-positioning exceed standards or achieve a positive outlook. However, the port of Greece as a global maritime capital”. Q: How many years does your Q: Which sector do you operate in? excellence, while a smaller number Piraeus needs to be further developed, company operate? Consumer Products 37% Q: How do you evaluate the Piraeus port’s freight infrastructure and operations in terms of: Other Services 20% 8% Transport & Third-Party Logistics 14% Retail 9% 47% 15% 45% 45% Shipping / Port Operations 4% 43% Agricultural Products 4% 35% Financial Services 3% Telecommunications / Technology 3% 28% Diversified Industrial Products 2% 26% 77% 23% Mining & Metals 1% 19% 18% 19% 18% 17% Private Equity 1% 16% 16% 12% 12% 12% Life Siences / Healthcare / Pharma 1% 10% 7% 0-10 years Real Estate, Hospitality & Construction 1% 5% 6% 10-19 years 3% 3% 3% 2% 2% 2% >20 Banking & Capital Markets 1% 0% 1%

Availability / Intermodal Quality of Quality & Efficient / capacity connectivity with other infrastructure reliability of effective Q: Do you manufacture, trade or provide services within the above sector(s)? If yes, at what transport modes services collaboration percentage do you perform the aforementioned operations?

Very low Low Meet standards Exceed standards Achieve excellence N/A

Provide services Trade 72

74

60 Manufacture

86 87 Thessaloniki Regional ports Thessaloniki plays a specialized role this improvement, it is noteworthy those reporting that the port meets or The Greek State’s portfolio includes The respondents’ perception of the in the maritime sector (in comparison that around 40% of respondents exceeds their standards score between 10 ports: Volos, Rafina, Igoumenitsa, regional ports is somewhat more to the Piraeus port), mainly due refrained from expressing an opinion 18% and 34%, with only a very small Patras, Alexandroupolis, Heraklion, pessimistic, with those having a “low” to the importance of its port as a about the port. Of those who did minority (1%-4%) feeling that it Elefsina, Lavrion, Corfu, and or “very low” view of their various gateway to Southeast Europe, as express an opinion, a significant exceeds their standards or achieves Kavala. Already, strong investment aspects, ranging between 37% (for well as the prospects created by its percentage (ranging between 25% and excellence. Once again, connectivity interest has been shown for the efficient and effective collaboration) privatization113. The port’s freight 42%, depending on the question) have with other transport modes is the Alexandroupolis port, both because and 51% (for connectivity). 14%-22% infrastructure and operations have a “low” or “very low” evaluation of its port’s key weakness. of its strategic location and the report that they meet standards, while been progressively improving. Despite infrastructure and operations, while employment opportunities created by 1%-3% believe they exceed standards the TAP project114. or excel.

Q: How do you evaluate the Thessaloniki port’s freight infrastructure and operations in terms of: Q: How do you evaluate the regional ports’ freight infrastructure and operations in terms of:

42% 39% 40% 40% 40% 40% 40% 34% 36% 35% 35% 30% 30% 34% 34% 34% 34% 28% 26% 28% 27% 22% 23% 19% 19% 22% 17% 18% 17% 14% 16% 12% 10% 7% 9% 6% 5% 6% 3% 3% 3% 3% 3% 2% 2% 1% 2% 1% 0% 0% 0%1% 1% 1% 0% 0% 0% 1%1% 1% Availability / Intermodal Quality of Quality & Efficient / Availability / Intermodal Quality of Quality & Efficient / capacity connectivity with other infrastructure reliability of effective capacity connectivity with other infrastructure reliability of effective transport modes services collaboration transport modes services collaboration

Very low Low Meet standards Exceed standards Achieve excellence N/A Very low Low Meet standards Exceed standards Achieve excellence N/A

113. Re-positioning Greece as a global maritime capital, EY Greece, July 2017

Q: Following the previous questions, would you like to make any suggestions regarding the further development of the ports’ infrastructure and services?

Greek regional ports have Privatization of regional ports, similar to the case of Piraeus port, as there is a long way to go. 1 a need for investment in their infrastructure and superstructure. Our findings confirm that • Updated design, quality control and engineering solutions. the regional ports’ freight 2 • Contractors need to emphasize on good quality instead of low price. infrastructure and operations need to be greatly developed • Better cooperation between the ports, in order to share best practices. before they attain a satisfying 3 • Implementation of a single window. performance level. According to respondents to this survey, Intermodal connectivity (especially with freight trains). privatizations, hinterland 4 logistics development, intermodal connectivity, and operational synchronization, are the areas where future development of the regional ports should focus.

114. Greece has high expectations for regional port privatisation, portseurope.com, 11 January 2018

88 89 C. Rail infrastructure and operations

Respondents to the survey confirm However, there are plans for the railway line. The organization is also Respondents take an equally negative concerning connectivity reaching confirming the view that they need that the rail infrastructure in Greece upgrade and development of the looking into extending the suburban view with regard to rail freight 69%. Only one in five respondents further development to be able is facing several challenges. More Greek rail infrastructure, over the railway in Western Macedonia operations. “Low” and “very low” reports that rail freight operations to exceed standards and achieve than two thirds of participants next years. Specifically, regarding (Giannitsa, Edessa, etc.) evaluations exceed 60%, with those meet standards on most of the KPIs, excellence. appear dissatisfied, having a “low” or Northern Greece, OSE has announced “very low” opinion about intermodal plans that include the interconnection connectivity (77%), accessibility (69%) of its railway network with various Q: How do you evaluate the current rail freight operations in and quality of infrastructure (69%), ports (Volos, Kavala, etc.) and the terms of: while only 13%-22% believe they meet completion of the study on the new or exceed standards. Thessaloniki–Amphipolis–Nea Karvali Availability / capacity Intermodal connectivity with other transport modes

Q: How do you evaluate the current rail infrastructure in terms of: Rail freight operations 2% 4% 13% 1% 12% appear to be one of the 4% 21% 21% weak links of the Greek Accessibility 19% 50% 18% 10% logistics hub. 15% 18% Participants suggest that extended railway lines and Intermodal 2% connectivity with ports, logistics connectivity 44% 48% parks, and the European rail with other 27% 50% 11% 10% network are the next steps for transport modes the further development of rail infrastructure and services. 1%2% Efficient / effective colllaboration Quality & reliability of services Quality of 24% 45% 17% 11% infrastructure 1% 14% 18% 20% 2% 24% 2% Very low Low Meets standards Exceeds standards Achieves excellence N/A 1%

18% 23%

40% 36%

Very low Low Meet standards Exceed standards Achieve excellence N/A

Q: Following the previous questions, would you like to make any suggestions regarding the further development of rail infrastructure and services?

Connectivity with the Broader railway lines, European rail network connectivity to the Piraeus port (activation of and optimization of rail Standard cargo train the Thriasio rail center). and road infrastructure, timetable, collaboration accordingly. with ports and logistics parks.

90 91 D. Air freight infrastructure and operations

Athens Thessaloniki and other regional airports Our survey shows that respondents and 79%. Dissatisfied respondents The level of satisfaction with air 29% and 39% – with a significant share of this group of airports. Once again, are quite satisfied with the air freight are limited to single digit numbers, freight infrastructure and operations opting for “very low” – while satisfied more than one third of participants infrastructure and operations of with the exception, once again, of in Thessaloniki and other regional respondents (those who answered chose not to express an opinion on the Athens, with the share of those intermodal connectivity, where 29% airports, is much lower compared to “meet” or “exceed standards”) are no airport of Thessaloniki and the other stating that they meet or exceed describe the quality of infrastructure Athens, with those describing them as more than 34%. Availability, capacity, regional airports, possibly because their standards, ranging between 55% and operations as “low” or “very low”. “low” or “very low” ranging between and connectivity are the weak points they have no first-hand experience.

Q: How do you evaluate the air freight infrastructure and Q: How do you evaluate the air freight infrastructure and operations of Thessaloniki and other operations of Athens in terms of: regional airports in terms of:

1% 2% Availability / capacity Intermodal connectivity Availability / with other transport modes capacity 5% 57% 20% 15% 10% 11%

36% Intermodal 1% Athens’s air freight 36% New investors should 26% connectivity with infrastructure and 28% look to improve other transport 5% 24% 38% 16% 16% modes operations appear to freight infrastructure be a strong link of the and operations in 21% 1% 22% 1% Greek logistics hub. 4% 2% Thessaloniki and other Quality & Asked about the future reliability of 6% 44% 31% 4% 15% regional airports. services development of the air freight Respondents maintain that better infrastructure and services Efficient / effective colllaboration Quality & reliability of services connectivity and collaboration of Athens, respondents with ports and the rail, as well as identify strengthening the the optimization of infrastructure 1% 9% 6% Efficient / ecosystem between the Athens and operations, can improve the effective 9% 48% 21% 5% 16% International Airport, Fraport 22% regional airports’ outlook. collaboration and other transport means, and 39% 20% 38% increased synergies with ports and the rail network, as key priorities. Very low Low Meet standards Exceed standards Achieve excellence N/A 6% 25% 6% 28% 1%

Very low Low Meet standards Exceed standards Achieve excellence N/A

Q: Following the previous question, Q: Following the previous question, would you like to make any suggestions would you like to make any regarding the further development of the suggestions regarding the further air freight infrastructure and services of development of the air freight Thessaloniki’s air Further develop the Athens? Synergies and infrastructure and services of Better connectivity and freight infrastructure air freight ecosystem Thessaloniki and other regional collaboration with ports collaboration with ports and and services should be between the AIA, Fraport airports? and the rail network. the rail network. further developed. and all other means of transport.

92 93 E. Road Infrastructure F. Road transport

Respondents appear rather satisfied meets or exceeds their standards, rating it as “low” or “very low” – is Respondents appear to have a excellence. Relatively high shares of with the current road infrastructure or even achieves excellence (49%- intermodal connectivity. Overall, moderate overall opinion of road respondents (32%-44%) describe their in Greece, which has developed 79%). Availability and capacity is these results are encouraging, while transport infrastructure and level as “low” or “very low”, with the considerably over the last few years. the strongest element of the road the progress that has been achieved operations, as most of them (42%- exception of availability and capacity, The majority of respondents estimate infrastructure, while, once again, the is obvious. Road infrastructure is a 65%) feel that they meet standards, which 22% describe as “low” or “very that the current road infrastructure weakest – with 46% of participants growing field of development. but relatively few (9%-14%) say that low.” they exceed them or have achieved

Q: How do you evaluate the current road infrastructure in terms Q: How do you evaluate the road transport infrastructure and of: operations in terms of:

4% Availability / Availability / capacity Intermodal connectivity capacity 18% 60% 15% 4% with other transport modes Road infrastructure 1%5%2% 1% Road freight transport 1% has developed 5% 9% has ways to go before Intermodal 9% connectivity with substantially. 21% 9% becoming a strong link of 10% 36% 39% 9% 5% other transport Moving forward, respondents the Greek logistics hub. modes suggest that efforts should When asked to suggest areas of focus on rationalizing road 35% future development, participants freight transport costs, 1% 42% mentioned synergies and Quality & limiting toll stations to exit collaboration with ports and reliability of 4% 30% 44% 18% 4% points, creating a road 65% the rail network, as well as the services infrastructure grid that will need to focus on transportation bypass congested areas, and operations and, in particular, connecting infrastructure and door-to-door deliveries. 2% smart means of transport. Efficient / Efficient / effective colllaboration Quality & reliability of services effective 5% 29% 44% 14% 6% 1% 2% collaboration 2% 5% 6% 5% 10% 13% Very low Low Meets standards Exceeds standards Achieves excellence N/A 30% 30%

46% 48%

Q: Following the previous question, would you like to make any suggestions regarding the further development of the road Very low Low Meet standards Exceed standards Achieve excellence N/A infrastructure and road freight services? Q: Following the previous Road freight transport costs should be rationalized. 1 question, would you like to make any suggestions regarding the Operation of exit toll stations only. further development of the road A focus on 2 Synergies and Better pricing and freight transport infrastructure transportation and services? collaboration with Need for a road infrastructure grid bypassing congested areas. incentives for road operations – especially, 3 freight are required. ports and the rail door-2-door delivery. 4 Connection of infrastructure with smart means of transport. network.

94 95 G. Sea Transport H. Warehousing: Infrastructure, services, 3PL / 4PL

Sea transport is a strong link of the it as “low” or “very low”. We conclude 3PL / 4PL infrastructure and reporting that they exceed standards Greek logistics hub. Almost three out that most of the participants are operations present a mixed picture, or achieve excellence are limited to a of four participants have replied that satisfied from the sea transport with six in ten respondents stating minority — between 18% and 21%. sea transport meets or exceeds their infrastructure and operations in that they meet or exceed standards, standards, with a high percentage Greece. This is not at all unexpected, or even achieve excellence (59%-63%). Overall, however, warehousing has set (20%-24%) opting for the latter. Once given that the Piraeus port’s services However, this still leaves one third of the foundation for the Greek logistics again, intermodal connectivity is seen have greatly developed over the past the sample evaluating them as “low” hub to exceed standards in this field. as the weak link, with 38% evaluating years. or “very low” (29%-33%), while those

Q: How do you evaluate the sea transport infrastructure and Q: How do you evaluate the 3PL / 4PL infrastructure and operations in terms of: operations in terms of:

Availability / capacity Range & quality of services 4% Availability/ 22% 47% 23% 5% Capacity 1% 3% Sea freight transport 1% 3% 3PL / 4PL remain appears to be a strong 8% 8% stagnant, continuing to

Intermodal 2% link of the Greek logistics be “just ok”. 32% 27% connectivity with hub. 16% Respondents identify the need 6% 32% 48% 6% 6% 20% other transport With regard to potential to proceed with a synergic modes improvements, respondents concept at a faster pace, invest identify the need of linking in logistics parks, and moving to larger organization schemes 1% 3% various commercial ports with Quality & cargo ships and Ro-Ros. 38% 44% through collaboration and reliability of 18% 49% 24% 5% mergers of small companies, as services key priorities.

Efficient / effective collaboration Quality & reliability of infrastructure 3% Efficient/ 5% 1% effective 3% 19% 49% 20% 6% 1% 3% collaboration 8% 8%

24% 15% 30% Very low Low Meet standards Exceed standards Achieve excellence N/A 18%

43% Q: Following the previous question, 44% would you like to make any suggestions regarding the further development Very low Low Meet standards Exceed standards Achieve excellence N/A of the sea freight transport infrastructure and services? Link various commercial Q: Following the previous question, Investments in logistics parks ports with cargo ships / would you like to make any 1 suggestions regarding the further Ro-Ros. Need to proceed with a synergic concept at a faster pace. development of the 3PL / 4PL 2 infrastructure and services? Collaborations and mergers of small companies, under larger 3 organization schemes.

96 97 I. Customs infrastructure and services J. Progress over the last three years

The level of satisfaction with customs neither of the three questions is there digitalization of customs is a pressing Respondents were asked to assess the with regard to ports’ infrastructure The picture is less optimistic with infrastructure and services emerges a majority that describes the services issue that concerns respondents. progress recorded over the last three and operations, as well as road regard to rail infrastructure and as rather limited, with more than as meeting or exceeding standards. Indeed, it would be much easier for years in each of the different elements infrastructure, with three out of four operations, where 42% believe 40% describing it as “low” or “very both companies and individuals if of the Greek logistics ecosystem. The respondents acknowledging progress, the situation has remained at the low”, a figure that reaches 50% with The customs’ lackluster performance processes were resolved digitally, as overall picture that emerges is clearly of which 31% and 22% respectively same level and 13% believe it has regard to efficient and effective can be attributed to the extensive digital operations and the reduction positive, with participants agreeing report a high level of improvement. deteriorated, against 41% who see collaboration. 27%-37% report that amount of bureaucracy one has to of bureaucracy would considerably that infrastructure and services have 67% of respondents see progress progress. Lastly, 52% of respondents customs infrastructure and services overcome, with processes being improve the sustainability of the Greek improved — in some cases substantially in road transport, 51% in air freight have seen no change with regard to meet standards, while 10%-12% say delayed due to the complexity of the logistics hub. so. infrastructure and operations, 50% in customs and 8% believe things have they exceed standards. In short, on Greek bureaucratic apparatus. The sea transport, and 48% in warehousing deteriorated, while only 30% have According to our survey, the and 3PL / 4PL services. seen progress. greatest progress has been made

Q: How do you evaluate the customs infrastructure and Q: In your opinion, have the following knots improved / deteriorated in terms of infrastructure and operations in terms of: services over the past 3 years?

3% Availability / 38% 37% 10% 12% Ports’ infrastructure & operations 4% 18% 43% 31% 4% Capacity Customs have many challenges to overcome. Road infrastructure 8% 14% 53% 22% 3% Quality & Participants identify the need reliability of 8% 36% 35% 10% 12% to extend working hours and 1% services increasing digital operations Air freight infrastructure & operations 30% 35% 16% 18% to reduce bureaucracy, as top priorities. 1% Efficient / Warehousing: effective 3% 42% 34% 14% 6% 9% 41% 27% 12% 12% Infrastructure, services, 3PL / 4PL collaboration 1% Road transport 9% 21% 55% 12% 3% Very low Low Meet standards Exceed standards Achieve excellence N/A

Sea transport 4% 42% 38% 12% 5%

Q: Following the previous question, would you like to make any suggestions regarding the further Customs infrastructure & services 8% 52% 25% 5% 10% development of the customs infrastructure and services? Rail infrastructure & operations 13% 42% 38% 3% 5%

Greatly deteriorated Slightly deteriorated Remain at the same level Slightly improved Greatly improved N/A

Extend Increase digital operations working hours. in order to reduce the bureaucracy.

The knots of the Greek logistics hub have improved, with the Piraeus port being the high outlier, and rail and customs being the low outliers.

98 99 K. Overall assessment and suggestions for improvement

Respondents were asked to provide excellence, a significant 43% rate it as being low. There are various areas an overall assessment of Greece’s low. that need improvement. Only this way logistics competitiveness as a regional can the country achieve outstanding European freight / transshipment There is no doubt that progress has ratings and become an even more hub. The response was mixed: while been made. However, we cannot competitive regional European freight / 55% reply that the Greek logistics overlook the fact that a considerable transshipment hub. hub’s competitiveness meets or percentage of respondents still assess exceeds standards, or even achieves Greece’s logistics competitiveness as

Q: In your opinion, how does Greece’s logistics competitiveness rank overall, as a regional European freight / transshipment hub?

43% 42%

12%

3% 1% 0%

Very Low Low Meets Exceeds Achieves N/A standards standards excellence

Moving forward, respondents Q: Following the previous question, would you like to make identified four top priorities if Greece any suggestions regarding the further development of the is to strengthen its competitiveness competitiveness of Greece as a regional European freight / as a regional European freight and transshipment hub: transshipment hub? • Making the country’s logistics a key priority, and developing and Logistics need to become a national priority. A specific plan for reinforcing implementing a specific plan to upgrade infrastructure. 1 the country’s infrastructure must be developed and timely implemented. • Collaborating with and studying best practices from other countries. 2 Collaboration with other, more advanced countries, that can share best • Developing international capabilities practices. and improving the organization of customs. 3 Develop intermodal capabilities coupled with the digitalization of customs.

100 7Conclusion

ositioning Greece as an The current expectation is that • Financial and business services: The geographical location and 3. The sizable number of ports that intermodal hub toward Central “international freight center” competition among the major global A strong financial ecosystem, along geopolitical importance of Greece give can play a key role in the cargo and Northern Europe. The current has been an objective of the freight centers will further intensify with the involvement of top tier P the country a significant advantage, movement from Asia. connection of the rail network with Greek State, as well as all relevant over the coming years. As global trade global financial and legal players, is especially as a trade route between the Piraeus and Thessaloniki ports, stakeholders, for several years now. continues to pivot towards the Far a key to complementing the above 4. The large Intermodal logistics Europe and Asia, compared to the rest and the licenses given to new rail It is a realistic objective, offering East, it is very likely that, in the next investments. centers being developed at Thriasio of the Mediterranean and Northern Pedio in Attica and at the Gonos operators, are steps toward the right substantial opportunities to all those twenty years, we will see a number of • Technology / innovation ecosystem European ports. camp in Thessaloniki. direction. involved in the sector, and clear and new freight hubs emerging as leading and human capital: measurable benefits to the country’s powers, outside Europe. This long- Technology and innovation are This has been illustrated by the The 3PL / 4PL services sector is economy and Greek society as a term trend may be affected, but will In parallel, the privatization of the important, as long as there is an continuous growth of Greek ports, defined by stagnation and high whole. not be reversed by the recent (COVID- Greek airport network in recent years availability of capable and trained with Piraeus being at the forefront. fragmentation, with more than 100 19-driven) shift that we see in the has proven beneficial for the sector talent to contribute to developing Currently Piraeus ranks as the top 3PL providers fighting for €368m The purpose of this refreshed survey - global production model and the trend and, especially, for the growth of new business models, and enabling port in the Mediterranean and the 4th revenue. This is a result of the the second of its kind, following the for “near / local sourcing” of part of air freight. The capacity of the AIA the required transformation of in Europe overall in terms of TEUs, sector’s “introvert” outlook, focusing inaugural one published in 2017 - is the production. Through Piraeus and is significant (while also undergoing supply chains. despite the COVID-19 pandemic’s mainly on providing services to providing a detailed overview of the other key ports, Greece will need to considerable expansion works), along impact. The expected growth of with the 14 regional airports being the local market. Considering that state of the Greek T&L industry, right work hard if it is to retain or, indeed, A series of other factors associated Thessaloniki, with aggressive operated by Fraport Greece, where supply chains today (and in the before the onset and in the midst of strengthen its leading status – as will with the broader financial, political, expansion plans in place to achieve investments of €440m, following future) demand strong networking the COVID-19 pandemic. other traditional freight hubs. tax, and social environment, can a fivefold increase of current their privatization in 2015, have been and technology-based excellence, contribute significantly to maintaining throughput (2.3m TEUs annually), the 3PL sector requires immediate Following a period of financial and There are four main factors that completed in early-2021. and boosting Greece’s competitiveness means that Thessaloniki is likely to transformation and important socio-political crisis in Greece, the past make a country or region attractive as an international freight center. While become the second success story after The T&L industry is also getting investments. few years showcased a turnaround as an international freight center or a important steps may have been taken Piraeus, especially when sufficient stronger, with the existence of five in the country’s investment climate, leading regional logistics hub: in recent years toward this direction, progress is made with regards to the free trade zones (FTZ) established something that is evident by the • Connectivity with global trade there is still a long way to go. port’s interconnectivity with other with customs and warehouses, that numerous investments in ports, lanes and other hubs: intermodal forms of transport. help strengthen the country’s position. airports and road transport. Greece has improved drastically in During the past decade, and despite Greece also has the most developed recent years in this area. Of course, the severe financial crisis, Greece has In general, there are four key road network in Southeast Europe, In addition to the strides made in the this progress can be — largely – made tremendous progress in terms of takeaways that contribute greatly to that can serve as a getaway to Central country’s transport infrastructure, attributed to the Greek shipping its connectivity to the global shipping the potential of Greece operating as a Europe, and improves its relative the Greek shipping industry still is, by ecosystem. network – from the 69th place globally major maritime hub: positioning year after year on this far, the most extrovert sector of the back in 2011, all the way up to the • Advanced port and logistics 1. The savings (both in terms of time front. national economy, a leading global 20th currently, which also translates as infrastructure: and cost) that Greece’s geographic player and a major source of income, the No 1 place in the Mediterranean An area where significant private location can offer to the cargo trade Despite the privatization of TRAINOSE, wealth and prestige for Greece. It also region, according to the Liner investments have been made, with from China to Europe and vice versa. there is still a lot of work that needs constitutes the competitive advantage Shipping Connectivity Index. This upcoming investments in logistics to be done with respect to the rail that currently places Greece among is extremely important, as it shows 2. The local presence of the world’s parks looking to strengthen the network, in order to capitalize on the leading maritime hubs of the the untapped potential of the Greek superpower in terms of controlled infrastructure landscape as well. Greece’s potential as a complete world. shipping industry. merchant fleet capacity.

102 103 Related to brand awareness RECOMMENDATIONS 1 2 3 Brand awareness Study / Survey Promote Brand Greece as an “International Conduct studies and surveys Host global roadshows that Freight Center” (IFC) or/and as a that showcase how Greece has promote the brand of Greece as “Trade Gateway from/to Central an economic and qualitative an IFC / Gateway to Central and and Southeastern Europe” competitive advantage in the Southeastern Europe different sectors of the T&L industry Related to ports Related to the road network

Further privatization Rationalization of tolls Related to the rail network Related to customs of ports • Tolls need to be digitized 1 Privatization has proven to 1 • Payment needs to be km-based be beneficial for Piraeus and Constant availability Intermodal connectivity Thessaloniki, and could assist Customs need to operate 365/24/7 other ports in achieving their Finalize rail connection with all in all main gates of the country Improve connections with key / main freight ports, as well as 1 maximum potential 1 infrastructure with select freight centers and industrial areas. Interconnection with Central Europe via the Connections need to be completed for important Digitalization 2 Orient / East-Med corridor, and also through the Intermodal connection with air, infrastructure, such as freight ports, industrial upgrade / construction of essential sections Customs operations need rail and road and logistics concentrations 2 to be 100% digital 2 The intermodal connection of freight ports is crucial for their further development Offer E2E services Rail companies should offer E2E services, 2 including first and last mile Improve hinterland logistics in selected areas 3 Hinterland logistics infrastructure gives Electrification, ETCS and alternative technologies. Infrastructure upgrade and incentives to global players to evaluate completion of maintenance works Greece as an international freight center 3 Finalize investments in the electrification / e-mobility and signage of the rail network, as well as adopt the and start considering it European Train Control System (ETCS), which will allow for cost reduction and productivity increase. Attend to all maintenance matters at hand. Consider appropriate technologies, complementary to e-mobility, such as hybrid and hydrogen Single window implementation Advancement of ports’ community systems 4 (PCSs), based on an integrated E2E approach Related to the 3PL / Related to human capital in the T&L industry 4PL sector Transform supply chain Promote supply chain Synergies Related to air and sea freight professionals professionals as transport Create synergies and joint ventures between companies (3PLs and CEPs), in order to scale them up to “Value Stream Leaders” Business Partners (Business Leaders) Air freight Exports Improve intermodal connectivity with 3PL / 4PL companies need to focus on exporting their “Seanairgy”-type projects Develop supply chain operations and become established players at selected Southeastern European markets professionals who drive process excellence (Operational Sea freight Digital transformation Excellence Leaders) and embed Develop supply chain, logistics Connect with an “intermodality” approach Companies in the sector need to heavily invest in digitally digital transformation (Digital and transport professionals who transforming and automating their operations Transformation Leaders) “take the robot out of the human”

104 105 Final remarks

To summarize, in the years between disrupted global supply chains and and aim for solid targets, such as the first publication of this study, in has highlighted the need to invest entering the top 30 countries in the 2017, and this refreshed publication in infrastructure and achieve digital LPI index in the next five years. At of 2021, the brand of Greece as transformation faster than expected. the same time, it needs to continue an international freight center has At the same time, it creates potential increasing its marketing and branding further consolidated, with significant opportunities for Greece to build efforts, in order to become the efforts in various sectors getting the on the progress already made, and gateway to Central and Southeastern recognition they deserve. operate as a center of excellence and a European markets. This will have recognized International freight center substantial benefits for Greece, and As we have had the opportunity to in this “re-designed” global supply could help integrate it further and present in the preceding chapters, chain. strengthen its contribution to the there remain quite a few points that European economy. need to be improved in the coming In view of the years to come, Greece years. The COVID-19 pandemic has needs to capitalize on its prospects

This report was prepared by (in alphabetical order): Georgios Aligiannis, Emmanouil Karlos, Nikos Liakos, Thanos Mavros, Ira Pappas, Yannis Pierros, Yannis Sarantis, Evangelos-Maximos Scopelitis, Elissavet Vandorou

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