Flag­ging de­mand and ris­ing costs are sink­ing ferry sec­tor

Kathimerini English - - Focus - BY NIKOS ROUSSANOGLOU

Coastal shipping in Greece is in dire need of a life­line as its com­pa­nies have been fac­ing in­creas­ing fi­nan­cial prob­lems in re­cent years, ac­cord­ing to a survey by the Foun­da­tion for Eco­nomic and In­dus­trial Re­search (IOBE) pre­sented yes­ter­day in Pi­raeus.

The survey also il­lus­trated the sec­tor’s sig­nif­i­cant con­tri­bu­tion to the econ­omy, es­ti­mated at 1.5 bil­lion euros in 2013, while ac­count­ing for 21,400 jobs in­clud­ing some 5,000 of­fice po­si­tions in the in­dus­try’s firms. When tak­ing into ac­count the in­di­rect im­pact of coastal shipping on the econ­omy through the growth of tourism and the support of the is­lands’ pri­mary and sec­ondary sec­tors, the to­tal con­tri­bu­tion amounted to 15.4 bil­lion euros or 8.5 per­cent of the coun­try’s GDP last year.

The fi­nan­cial prob­lems that have ac­cu­mu­lated in re­cent years are threat­en­ing even the big­gest coastal shipping com­pa­nies. The IOBE re­port showed that de­mand for con­stant shipping ser­vices has been in con­stant de­cline in Greece since 2010. From 2009 to 2012 the to­tal num­ber of pas­sen­gers dropped from 16.8 mil­lion to 12.8 mil­lion per year – i.e. a 24 per­cent drop over three years. Sim­i­larly the num­ber of pri­vate cars shipped went down by 29 per­cent to 1.7 mil­lion, and trucks car­ried also de­clined by 29 per­cent to 618,000.

Along with the drop in de­mand, op­er­a­tion costs soared due to the con­stant rise in fuel prices in re­cent years, send­ing coastal shipping com­pa­nies’ losses soar­ing.

As a re­sult of that the cur­rent fi­nan­cial pic­ture of the sec­tor is par­tic­u­larly bad, with par­tic­u­larly re­duced cash flow and loan pres­sure high. IOBE stressed the need for an im­me­di­ate re­duc­tion in the cost of ferry op­er­a­tions (through crews that meet the re­quire­ments of fer­ries) or the re­duc­tion of the oblig­a­tory char­ter­ing of fer­ries on reg­u­lar lines.

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