Greece rising: An international freight center

EY Greece partners Yannis Pierros and George Panagiotopoulos analyse the competitive advantages of Greece as a strategic transport and logistics hub

By Anastasia Vamvaka

What is Greece’s status as a maritime hub today, and how can it ensure an even more important role in the international freight market? 

Greece is a true maritime superpower, with Greek-owned vessels accounting for 21% of the global fleet in terms of dead-weight tonnage capacity, as per the Union of Greek Shipowners data. 

However, that, by itself, cannot guarantee the country’s future as a global maritime hub, in light of an increasing global competition – and at a time when global trade is shifting steadily to the eastern hemisphere. 

Along with a key role in the international freight market, there is also need for strong financial, legal, and other specialized business services, significant port and supply chain infrastructure, and a tradition of maritime technology, related to innovation, R&D, education, and the availability of a skilled workforce. 

Greece possesses all of the above, but we need to work hard to safeguard and enhance these competitive advantages. This means maintaining and improving the current favorable business environment, and ensuring a stable regulatory framework and tax regime, along with a fast and transparent judiciary function, which will increase the influx of new, added-value business activity and foreign investments.

Can Greece emerge as the "Southern Gateway of Europe” for freight and what does it take to do so? 

Greece stands out in Southeast Europe, due to its strategic geographic location at the crossroads of Europe, Asia, and Africa. As a critical intermodal connector, Greece offers significant value within global trade and transportation networks. 

The port of Piraeus, Europe’s fifth-largest container port according to PortEconomics, remains Greece’s flagship seaport and stands as a symbol of its maritime resurgence. Piraeus is offering faster, more cost-efficient connections between Asia and Europe, compared to Northern European ports. 

The port’s privatization –and subsequent investments– has led to volume increases and expanded connectivity to destinations within and beyond Greek borders. Moreover, substantial planned public investments underscore the commitment to transforming Piraeus into the undisputed "Southern Gateway of Europe”.

Meanwhile, Thessaloniki port is undergoing transformative modernization to become a crucial gateway to Southeast Europe. An ongoing investment is expanding its operational capacity and enhancing its efficiency. The port is also strategically expanding its reach through investments in other Greek ports, including the recent acquisition of the port of Volos. 

Along with over 25 other commercial seaports, including Kavala and Igoumenitsa, a robust maritime network is being created, while the European Union’s designation of five Greek ports as strategic components of the Orient/East-Med (OEM) Corridor, highlights Greece’s growing role in facilitating efficient East-West trade flows. 

By leveraging its extensive port infrastructure, well-developed transportation networks, and proximity to major international shipping lanes, Greece has the potential to become a key trade flow hub, facilitating the efficient movement of goods and enhancing supply chain connectivity across Southeast Europe and beyond.

The reshoring trend that started during the pandemic –and has been further accentuated by recent geopolitical developments– is clearly boosting the country’s potential to become a gateway for trade from and to Southeast Europe. As countries and corporations seek to reduce their dependence on remote and less stable jurisdictions, a trend of moving production lines and logistics operations to the periphery of Europe is becoming apparent. 

To capitalize on this trend, Greece needs to continue investing in four key areas: port privatizations and modernizations, road network expansion, developing advanced hinterland logistics capabilities, and modernizing the railway network.

You’ve mentioned the reshoring trend; what should Greece do to capitalize on this opportunity for its T&L sector? 

Reshoring by itself will not automatically lead to Greece developing into a gateway. Competition is rife, and we cannot be certain that this trend will persist in the long-term. Thus, to able to draw in more logistics investment, we need to build on the country’s strengths, focusing on certain key areas. 

One, is improving the accessibility of transport hubs. This also means enhancing the quality of the supporting infrastructure –among others, utilities, communication networks, etc.– and providing suitable facility features, as increased storage capacity and layouts for efficient flow. These are intertwined with ensuring the availability of land and infrastructure, which is pivotal to scaling operations.

These, in turn, can help Greece capitalize on its proximity to target-markets in Europe, the Middle East and North Africa, by further reducing shipping times, as well as operational expenses and costs. 

Maintaining a favorable regulatory environment, streamlining bureaucracy and providing government incentives are additional focus areas. We also need to ensure technological readiness, by investing in modern communication networks, digital infrastructure, and automated supply chain operations.

But to make all the above work, the most crucial component is ensuring the availability of skilled human capital, which means investing in training, reskilling, and upskilling initiatives. 

How can the State support the growth of the T&L market in Greece? Is the regulatory framework suitable for that?

We have seen significant progress in recent years, as the T&L industry has worked closely with the public sector, to develop a long-lasting transformation plan, to support the sustainable development of the logistics market and international trade. This resulted in a comprehensive legislation reform in 2014, culminating in the introduction of the National Transport Plan five years later, which aimed to enhance the sector’s competitiveness and upgrade the country’s transport infrastructure and services.  

Thanks to its ongoing efforts, Greece sits at 19th place globally in World Bank's 2023 Logistics Performance Index, with a score of 3.7. 

Meanwhile, the National Strategic Reference Framework (NSRF), with a total budget of €20 billion for 2021-2027, of which 15.3% has been allocated to T&L, will help the State achieve several key objectives. These include enhancing the country’s transportation infrastructure, promoting a safe and high-quality rail transport system, and making the best use of Greece’s motorways, seaports, and airports by building necessary sections and connections. In parallel, the NSRF will also focus on creating a modern, digital environment for citizens and businesses, with investments in advanced digital technologies, such as 5G networks, which are essential for improving traffic management, supporting advanced logistics and infrastructure, and allowing for the adoption of new fleets and autonomous vehicles within the transportation sector.

Looking forward, which are the steps needed for Greece to further capitalize on its competitive advantage as an international freight center?

In our view, to increase its attractiveness as an international freight center or a leading regional logistics hub, Greece will need to focus on four priorities.

First is improving connectivity with global trade lanes and other hubs –primarily, but not exclusively– by leveraging its competitive advantage; that is, the Greek shipping sector. Secondly, Greece needs to improve port and logistics infrastructure, with investments in logistics parks to match the progress made in port infrastructure. Third is strengthening its financial ecosystem to provide top-level financial and business services. And last, but not least, is upgrading technology, innovation, and human capital, to allow the development of new business models and the required transformation of supply chains.

At the same time, however, we need to work on improving customs and the regulatory environment, developing the skills of our human capital in the T&L Industry, promoting sustainable logistics, and, finally, effectively branding Greece as an "International Freight Center”.