Tuesday September 16, 2014 Search
Weather | Athens
28o C
21o 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)  
Job creation is mostly seasonal
Primary surplus at 2.3 bln euros in end-August
Supermarket chains stifling traditional retail food stores
Hardouvelis sees great interest abroad in investing in Greece
Greece at bottom of social justice scale among EU28
Greece ranks last on a social justice scale assessing the performance of all 28 member states of the European Union and compiled by the Bertelsmann Foundation in its annual report. "Greece s...
Greece will not become Weimar, Samaras says
Greece has returned from the brink of collapse, said Prime Minister Antonis Samaras Monday, while lauding the countryís ability to keep going through the damaging effects of the crisis. ďThe...
Inside News
WATER POLO
Greece wins womenīs U19 Europeans in water polo
Greece won the womenís European Under-19 Championship in Italy beating the host in Sundayís final, for what was the countryís second gold medal in the competitionís history. The Greek teenag...
SOCCER
Veria alone on Super League summit
Olympiakos appeared in fine shape ahead of its Champions League premiere against Atletico Madrid on Tuesday, beating visiting OFI 3-0 on Saturday, but Macedonian minnows Veria are those that...
Inside Sports
COMMENTARY
Lessons not learned
One year since the assassination of rapper Pavlos Fyssas by a member of Golden Dawn in Keratsini, southwestern Athens, we now know a lot more about the activity of the neo-Nazi partyís hit s...
EDITORIAL
Promises, promises
Main opposition SYRIZA leader Alexis Tsipras was given the opportunity to set himself apart from his predecessors and their catastrophic practices during his recent appearance at the Thessal...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
†RECENT NEWS
1. Greece at bottom of social justice scale among EU28
2. Job creation is mostly seasonal
3. Primary surplus at 2.3 bln euros in end-August
4. Supermarket chains stifling traditional retail food stores
5. Hardouvelis sees great interest abroad in investing in Greece
6. Bourse quiet as investors sit and wait
more news
Today
This Week
1. Greece at bottom of social justice scale among EU28
2. Lessons not learned
3. Promises, promises
4. Central Athens traffic restrictions back in force on Monday
5. Democracy under Pressure | Live Streaming
6. Lost in the fog
Today
This Week
1. A Greek God
2. Greece on standby
3. Avramopoulos appointed Commissioner for Migration and Home Affairs
4. Central Athens traffic restrictions back in force on Monday
5. EU bank tests may miss trillion dollar risk, study finds
6. Pavlos Fyssas murder trial expected to start before the end of the year
†††Find us ...
††... on
Twitter
†† ††... on Facebook ††
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.