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Piraeus port has ‘geostrategic’ edge as Greece pushes logistics

The Greek port of Piraeus could become one of Europe’s top five container-shipping hubs as the government spurs logistics activities in a bid to kick-start economic growth, said Development Minister Kostis Hatzidakis.

Piraeus, now the 11th-largest container-shipping port in the European Union, is expanding as China-based Cosco Pacific Ltd. operates one of two piers, builds a third and prepares to offer cargo-train shipping to multinational companies including Hewlett-Packard Co. and Huawei Technologies Co.

“Piraeus could become one of the four to five biggest ports in Europe very soon,” Hatzidakis said in a Feb. 20 interview in Brussels.

Greece’s No. 1 port is the focal point of a logistics push by the Greek government as it tries to steer the country out of a six-year recession, battles 28 percent unemployment and seeks to wean itself off 240 billion euros ($329 billion) of international emergency aid.

To help stimulate demand for sea and rail transport near the crossroads of three continents, Greek Prime Minister Antonis Samaras’s ruling coalition is also preparing to sell a 67 percent stake in Piraeus Port Authority SA and all of rail operator Trainose SA.

PPA runs Pier I at Piraeus -- the first major European container port for ships entering the Mediterranean Sea through the Suez Canal -- and will be responsible for the western side of the planned Pier III.

“The geostrategic position of Greece is such that we can have development in the area of logistics,” Hatzidakis said. “What the state can do is to give incentives.”

Greece’s economic crisis has helped focus domestic policy makers’ attention on the potential benefits of being a regional transport hub in the way the Netherlands is in northern Europe, according to Sotiris Trichas, president of the Athens-based Greek Logistics Association, a non-profit organization that promotes the industry’s development.

Trichas said the logistics industry including transportation contributes around 10 percent to 12 percent to Greek gross domestic product, which has shrunk by about a quarter since 2008, and can help revive economic growth. He cited the importance of making Greece a transit route for goods.

“Because Greece is a small market, we must take advantage of the shipments that can come here not as a final destination,” Trichas said. “We have a big opportunity with the port of Piraeus. A whole industry could develop around Piraeus looking to more container traffic.”

A model is a March 2013 agreement by California-based HP to use Cosco Pacific’s Greek unit, Piraeus Container Terminal SA, to move goods manufactured in Asia into Europe. This became possible after the Greek government rushed to complete a long- delayed 17-kilometer (10.6-mile) link from the port to the national rail network following Cosco Pacific’s arrival on the Greek scene.

Piraeus, which has been the port of Athens since antiquity, is the 11th-biggest container port in the EU based on rankings for 2011, the most recent year for which data are available, according to European statistics agency Eurostat.

In 2011, Piraeus had year-on-year growth of 98 percent, the largest increase of any port in the top 20, according to Eurostat, which lists the top five as Rotterdam, Hamburg, Antwerp, Bremerhaven and Valencia.

Hatzidakis said taking full advantage of Piraeus’s potential to become a bigger trade gateway will require further development of the Greek railway network and greater exploitation of port and rail links in the country. He also cited the need to improve highways and regional airports.

In that context, he said legislation is in the works to encourage investment in the logistics industry.

“It will make life easier for investors in logistics,” Hatzidakis said. “It will modernize the institutional framework, mainly by simplifying the licensing framework.”

Trichas said the main priorities should be to make the whole national rail network double-track and electrified; to build a “freight village” in the area of Piraeus for companies to rent storage space and offer services; to upgrade existing road corridors with more fuel stations and parking areas; to abolish limits on storage space; and to introduce a logistics degree at Greek universities.

“We are on a good path, but we need to reinforce our efforts in this sector,” Trichas said. “We could have made much more progress earlier. It would have eased the current crisis.”

[Bloomberg]

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