Sunday August 31, 2014 Search
Weather | Athens
31o C
24o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Greek truckers show plight as groceries show up frozen

By Jonathan Stearns

Alexander Paraskevas is on the front lines of Greece's effort to transform itself into an economy that can compete in the 21st century.

Paraskevas, in charge of ensuring goods get from point A to point B for the country's biggest chain of wholesale stores, Metro SA, has hundreds of complaints about truck services that show how far Greece still has to go.

Trucking, like more than 300 other Greek professions, was ordered deregulated as part of the deal for 240 billion euros ($327 billion) in international aid. The whole revamp has yet to produce the promised benefits because of a combination of Greek political procrastination and a recession that has shrunk the domestic economy by about a quarter since 2008.

"Because Greek authorities dithered over deregulation for three years, demand for services and the market dried up and now it will take longer to show positive results," said Michael Mitsopoulos, senior advisor for infrastructure and the business environment at the Hellenic Federation of Enterprises in Athens. "The risk is the public will say: 'look, we liberalized and nothing happened, so let's go back.' This whole initiative could get discredited."

With Europeís leaders having declared victory in the four-year-old battle to keep the euro area intact and Greek Prime Minister Antonis Samaras asserting the worst is over for his country, the next step of rebuilding Greece's shattered economy remains in abeyance. Euro area policy makers' doubts about the pace of reform are holding up the country's next aid payment.

Protected Market

In the case of Athens-based Metro, that means continuing to rely on its own trucking fleet, which the company created to avoid having to rely on a long-protected public market for road transport in the country.

Most Greek businesses handle their logistics in-house because for decades they didn't want to risk their cash flow at the hands of a strike-prone trucking cartel.

"The problem was and remains the level of professionalism" in Greek public road haulage, Aristotelis Panteliadis, Metroís managing director, said in an interview in Athens. "This hasnít improved because, as a result of the crisis, nobody can make investments."

Greece has fully deregulated 285, or 83 percent, of 345 professions slated for market opening under the nationís rescue program financed by the euro area and the International Monetary Fund, according to the Greek Finance Ministry. Deregulation is in the works for all the rest, says the ministry.

Regulated Professions

These "regulated" professions represent a third of private employment in Greece, according to the Organization for Economic Cooperation and Development. Shuttle buses are another example.

"To date, the benefits from these regulatory adjustments have been modest," the Paris-based OECD said in a survey of Greece published in November. "The benefits of liberalization in road haulage and the occasional passenger transport have yet to make themselves felt."

This threatens to cost the government, clinging to a three-seat majority in parliament, popular support as Samaras fends off attacks from the main opposition SYRIZA party opposed to the aid conditions.

"You need direct investment first to create liquidity in the market and get out of the recessionary spiral," said Theodore Krintas, managing director of Athens-based Attica Wealth Management, which oversees 100 million euros. "Then changes such as the opening of closed professions will reinforce the upward momentum. These are important decisions for the Greek economy and I do believe the benefits will come."

Restricted Rights

Greece has about 33,000 trucks with public licenses to transport goods on behalf of customers and about 1 million vehicles, including vans, with more restricted delivery rights as companiesí private fleets.

Metro, which began business in 1976, has a 38-vehicle fleet of Mercedes-Benz, Iveco and DAF trucks handling 70 percent of its deliveries. These deliveries go to 45 "Cash & Carry" wholesale outlets and 58 "My Market" retail stores located across the country, from northeastern Greece near the border with Turkey to the southern island of Crete.

The Greek logistics market, including trucking, symbolizes how out of step the country's economy is with the rest of Europe. European companies on average outsource 80 percent of their logistics needs, while Greek businesses outsource a mere 20 percent, according to Kostas Theofanides, who worked as transportation manager for the Greek units of US oil producer Exxon Mobil Corp. and Britainís BP Plc for about a decade.

No Light

"The public trucking market in Greece has a huge chance to expand," said Theofanides, who is now a business-development consultant at Projectyou.gr. "But thereís a 52 percent drop in demand. People are depressed. They donít see light at the end of the tunnel."

Beyond the collapse of demand, the obstacles are a lingering lack of private trust in the public market because it used to stage strikes twice a year; internal resistance within companies that have private fleets to giving those up; and a lack of big organizations in the public-trucking fleet, which is owned by more than 29,000 truckers, he says.

George Stergiou, secretary general of consumer affairs at the Greek Development Ministry, said the deregulation drive has been "very painful and time consuming" and will yield tangible results once credit returns to the market.

"We have to stress the interests of the Greek public," Stergiou said. "Gradually, a majority is emerging for these changes. Thereís enormous growth potential."

63 Permits

Greece's previous Socialist government deregulated public trucking four years ago over protests by drivers, abolishing a limit on licenses for outsourced deliveries. Since then, only 63 new public truck permits have been issued, according to the Greek Transport Ministry.

"Nothing has changed since liberalization," said Apostolos Kenanidis, president of the Hellenic Federation of International Road Transport, which opposed deregulation. "Itíll be difficult for anyone else to enter the market as long as we keep our costs low."

For Metro, a move to extra outsourcing depends on more than competitive prices in the public market.

"We have no complaint with pricing, but we too often have a problem with quality of services," said Panteliadis. "That needs investment."

Service Complaints

Paraskevas, Metroís logistics manager, has evidence at his fingertips of subpar service provided by public truckers on whom the company relies for 30 percent of its deliveries.

In his office at a logistics park an hour north of Athens, he pulled up a spread sheet showing 255 complaints by Metro about its outsourced deliveries over the past three years, including 108 in 2013. Averaging one every three to four days, these "claims" relate to such troubles as broken-down trucks, late vehicle arrivals and wrong storage temperatures.

"Sometimes you get frozen groceries," Paraskevas said as several public-market trucks were docked alongside blue-painted Metro vehicles at the companyís warehouse next door. The warehouse, with 56 docks and a 24-hour loading service, is the main structure on a site that employs about 340 of Metro's 4,200 workers and that costs the company 16 million euros a year to operate.

Before showing off an area where Metro cleans its trucks every two days and carries out maintenance on the vehicles, Paraskevas said another common complaint by the company related to inappropriate dress or behavior by public truckers. He pointed out three Metro claims that drivers of outsourced deliveries had urinated in public near the docks.

Market Opportunities

Nonetheless, Panteliadis said "there is a trend toward the public market" in Greek trucking and Metro might boost reliance on these operators to 50 percent of its road shipments in three to five years from the current 30 percent.

That represents an opportunity for Greek trucking companies such as Med Frigo SA.

Med Frigo, which delivers Greek fresh fish to markets outside Greece including Germany, Italy, Spain, Switzerland and the UK, is considering expanding its services to destinations inside the country, according to Sotiris Marinakis, the company's logistics manager.

He said that Med Frigo, whose motto is "Always on Time," is examining options for serving areas around Athens and northwestern Greece and that Metro could be an attractive and interested customer.

Asked whether Med Frigo had contacted Metro about a possible business relationship, Marinakis said that step would take more time.

Marinakis made the remark as Panteliadis walked past on his way out of a logistics conference in Athens. While Greece is desperate for economic change, the country's road transporters are taking time to alter their ways.

[Bloomberg]

ekathimerini.com , Thursday February 13, 2014 (11:40)  
Disappearing inflation heightens Draghi concerns
Ministry launches work experience program for unemployed graduates
Tax burden in Greece among EUís heaviest, study reveals
Coalition bent on protecting weaker groups
Traveling on public transport in Athens gets cheaper
Commuters will pay 20 cents less for tickets allowing them to use all modes of public transportation in Athens as of Monday, though they will be valid for 70 minutes rather than 90 as was th...
Push made for cuts in education as merger scheme fails
Finance Ministry officials are pressing the Education Ministry to cut costs after it emerged that a program for merging university and technical college departments failed to save 68 million...
Inside News
SOCCER
Tough draw for Greek sides in Europe League Greek stage
Following Thursday nightís high, when all three Greek teams competing in the Europa League made it into the group stage of the competition, a harsh reality struck Friday as they found out wh...
JUDO
Greek judoka Iliadis triples up as Aguiar stuns Tcheumeo
Greek star Ilias Iliadis claimed his third world title in the under-90kg category in Chelyabinsk on Friday as Brazilian Mayra Aguiar and Colombian Yuri Alvear won gold in the womenís under-7...
Inside Sports
COMMENTARY
Keeping an eye on international developments
The Ukrainian crisis may herald the start of a second Cold War, while there is no shortage of analysts comparing the current international climate to that of 1914 in the runup to World War I...
EDITORIAL
A few good men
It gives us a great deal of hope that we have a new batch of mayors and regional authorities, as well as university rectors who represent the voice of reason and prudence and are unafraid to...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
†RECENT NEWS
1. Traveling on public transport in Athens gets cheaper
2. Push made for cuts in education as merger scheme fails
3. Govít aims to curb measures, secure loans, allow tax relief
4. DIMAR chief Kouvelis hints about presidency
5. French expert says Crete crocodile in good health, aged 4-7
6. Tensions mar regional ity swearing-in ceremony
more news
Today
This Week
1. Keeping an eye on international developments
2. A few good men
3. Disappearing inflation heightens Draghi concerns
4. Two men drown off Crete coast in strong tides
5. Traveling on public transport in Athens gets cheaper
6. Push made for cuts in education as merger scheme fails
Today
This Week
1. Attack on gay couple in Athens leaves one man needing surgery
2. Purification rituals
3. The battle against progress
4. Thessaloniki mayor Boutaris sworn in wearing yellow star amid Golden Dawn protests
5. Strong undersea quake occurs off island of Milos, felt in Athens
6. Athens finalizes Paris talks goals
†††Find us ...
††... on
Twitter
†† ††... on Facebook ††
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.