The new dynamics of logistics in Greece

Thessaloniki, January 2018

Since the ancient times Greece has shown a special interest and great success in trade. Taking advantage of its geographical location has managed to play a leading role on the international stage, developing a very strong shipping. In international trade, country’s imports and exports play an important role. Countries are more likely to import goods that domestic industries cannot produce efficiently or cheaply but can also import raw materials or goods that are not available within its borders. Exports are a function of international trade where goods produced in one country are transported to another for future sale or marketing. Exports are what make a country more competitive abroad, contributing positively to the trade balance.

The logistics system plays a catalytic role in these. Logistics deal with product flow management between the point of origin and the point of consumption in order to meet the requirements of customers or companies. Logistics companies, therefore, manage the entire supply chain, and in particular how resources are acquired, stored and transported to their final destination. The importance of logistics is great, as it is the link of all businesses to all sectors of the industries. They contribute to lean production, where the constant flow of goods helps to reduce unnecessary processes and stocks by keeping only what is necessary to create value. The better the supply system a business has, the better and more cost-effective it becomes, since it reduces unnecessary costs throughout the supply chain, mainly associated with delays and the retention of large stocks. As Martin Christopher, Professor of Marketing & Logistics at the Business Administration at Cranfield University, "Supply chains compete, not companies", demonstrating the importance of supply chain management.

The infrastructure of a country plays an important role in the development of logistics companies. In recent years, Greece's road infrastructure has improved considerably, as many new motorway sections (Ionia Odos) have been delivered and are under construction (Olympia Odos), better connecting Greece and reducing distances between key urban centers. At the same time, the construction of the tunnels in Tempe was completed, connecting more efficiently and faster the north with south Greece. As far as port infrastructure is concerned, the privatization of the two largest ports in the country, the Port of Piraeus by COSCO and the port of Thessaloniki by the DIEP GmbH-Terminal Link SAS-Belterra Investments Ltd, gave another potential for the merchant shipping of the country, with many prospects and further development of Greece as transit country. Concerning railway infrastructure, the recent privatization of TRAINOSE by the Italian Ferrovie dello Stato Italiane group, promises more efficient management of all the country's railways. In the aviation sector, the completion of the privatization of the 14 regional airports by Fraport, although targeted at the tourist population, by focusing on the country's strong tourism potential, can be extended to commercial purposes for the carriage of cargo by air. All these are evidence that the country's infrastructure is improving and paves the way for new business opportunities in the transportation and supply sectors.

In the field of geopolitics, the country has strong advantages. Despite the fact that since ancient years it has been considered a crossroad of three continents, due to its geographical location, in recent years it has taken important diplomatic steps with other countries. In particular, Greece's relations with China have been strengthened following the twinning of many cities and the investment of Chinese groups in the country. This is an important conquest for the country, as China wants to include Greece as a milestone in its international “One Belt One Road Initiative” strategy, the revival of the Silk Road and the networking of China worldwide, by funding many infrastructure and logistics development projects. This was particularly perceived recently in the 82nd TIF (Thessaloniki International Fair), where China was the honored country, showing the cooperation between Greece and China. Also, the country's relations with the Arab world have improved and this is proven in practice with various investments that have been made and are planned to be made by Arab countries in Greece. A distinct example of the country's confidence lies in the fact that Greece diplomatically represented Egypt and its Embassy in the recent crisis in Qatar, demonstrating the important role that Greece can play in the region, creating a stable climate for shipping and logistics companies.

In recent years, Greek firms have shown a particular interest in exports. This was triggered by the economic crisis, as businesses found that in order to survive they had to look for new markets for their products abroad, as the domestic consumer market they were operating was weakened. This trend creates the need for companies that will undertake all of these processes and product shipments, strengthening the logistics industry and creating new opportunities for entrepreneurship in the supply chain management. It is no coincidence that during the last year significant logistics discussions are taking place, concerning the joint development and exploitation of the Freight Center in Thriasian Plain by the Chinese company Cosco and the Italian Ferrovie dello Stato Italiane. In addition, the European Structural and Investment Funds through National Strategic Reference Framework programs are financing businesses to develop transportation networks, facilitating access to capital. Therefore, there is room for new companies and the further development of this sector, as well as an opportunity for Greece to take advantage of the present positive circumstances and to play an important role as a hub in the international transport and supply networks.