The gradual improvement in transport infrastructure, higher investments in basic equipment, and stronger external trade that is directly linked to investments by the public and private sectors all create a positive context for development of the cargo transport and storage sector (better known as logistics), according to a survey by Hellastat. However, while increased demand for more and specialized services leads to the continual entry of new enterprises in the market, logistics in Greece still has a long way to go before converging with service standards in the rest of Europe. «The number of companies in the sector today is big, mainly due to the many transport companies,» says Maria Koronaki, a property consultant specializing in logistics. «I believe the market will soon enter a consolidation process through mergers and acquisitions, a process that will open the door to major foreign companies,» she predicts. The Hellastat report stresses the strong growth rate of logistics companies during the last four years, which reaches double-digit figures. «The stabilization signs that the sector presented in early 2005 go hand in hand with the slowdown of growth rates that the Olympic Games and the increasing household borrowing had sustained,» the report notes. The rapid growth of the sector began in the early 1990s and is accompanied by an outsourcing trend, allocating jobs to third parties. The need to save funds and human resources, economies of scale and the optimization of distribution networks were the main reasons why so many corporations are linking up with companies specializing in transporting and storing goods. For 2004 the sector’s company results are considered satisfactory. Out of 172 companies, 166 are profitable but less than 50 percent of them (81 companies) showed higher profits compared with 2003. Another 56 show a drop in profits, while 19 turned profitable in 2004 after showing losses in 2003. On the contrary, out of the 26 companies that incurred losses last year, 15 were profitable in 2003. Still, the market’s value keeps expanding in number of players and turnover (from 850.17 million euros in 2001 to 1,258 million euros in 2004), which explains why the share of the top 10 companies in total revenues is just 32.8 percent. Logistics and real estate The restricted availability and therefore high cost of land, along with town-planning restrictions and deficient land usage are the main problems the logistics sector is suffering from. Particularly in Attica and Thessaloniki, spaces available are gradually exhausted, to say nothing about the insufficiency of road, railway and port infrastructures. Illustrating the problem is that of all warehouses in Attica the constructions meeting international quality standards and attracting foreign companies’ interest cover no more than 100,000 square meters. The presence of foreign companies in the domestic market is considered limited, while most of them cooperate with strong Greek firms such as Proodos, Omega International Transport and Beinoglou Transport. The most important foreign companies in Greece are TNT, Kuehne&Nagel, ACR Logistics, Shenker, Exel, DHL and DFDS. On the other hand, there is significantly stronger interest among foreign companies in entering the Greek market. A case in point is Prologis, one of the biggest companies in the sector internationally, which shows intense interest in participating in the development of the goods station at Thriasion Pedion, west of Athens. Koronaki believes that the entry of big logistics chains with huge storage needs will bring changes to the market and requires the acceleration of procedures for the operation of goods centers, which is the only way to cover the demand created, although this will emerge when chains develop their sales and distribution networks. «The lack of land available for development as well as the lack of quality constructions are the most important problems foreigners have. Serving customers from various points increases operation costs and reduces the market’s attractiveness,» observes Koronaki. She adds that «after all, most Third Party Logistics companies (3PL) would rather rent storage spaces than develop some themselves, in order to control the fluctuation of their needs better. There is also a problem with the uncertainty of title deeds due to the lack of a land register,» reflects Koronaki.