Will the World’s Top Shipping Nation Save Itself?

At a time where the debate over whether Greece should or shouldn't leave the euro zone reaches boiling point, shipping could prove critical for Greece's drive for sustainable growth.


Shipping isn't just an area of pride for Greek nationals and a playground for magnates such as the billionaire Latsis and Niarchos families.

"Greece is the world leader in shipping," John Faraclas, writer at allaboutshipping.com, said. "It's an industry that generates over $20 billion a year."

According to the Institute of Shipping Economics and Logistics, Greece is the top nation in shipping judging by tonnage figures for its controlled fleet, totaling 193 million deadweight tons in 2010. Greece is followed by Japan, Germany, and China.

At Piraeus, Greece's biggest port, the signs of industry and momentum are there for all to see. It's in Perama, a suburb next to Greece's famously smoggy and congested shipping hub, where global freight conglomerates from Taiwan's Evergreen to China's Cosco load and unload their containers.

"They moved the entire cargo terminal here," Faraclas said of the Piraeus Port Authority (PPA).

On the basis of the volume of containers handled, Piraeus ranked 18 in the top 20 ports in the European Union in 2010, according to Eurostat data. Rotterdam in the Netherlands, Antwerpen in Belgium, and Hamburg in Germany were the top three.

The European Union, the European Central Bank and the International Monetary Fund (IMF), also known as the "troika" of lenders looking to save Greece from the crisis, have told the country to privatize its assets to build up its depleted finances.

Crown Jewel

The PPA hasn't been left out of Greece's privatization process, with the Greek state putting its 74 percent shareholding in the port of Piraeus up for sale.

Cosco's investment in the region has been more than just symbolic, with the Chinese company spending approximately $4 billion on a 35-year lease. The shipping giant operates Piraeus's pier 2 and is planning the construction of another pier altogether.

With Greece's strategic position in the Mediterranean, the industry will continue to attract interest, as a planned 50 billion euro ($63.2 billion) privatization program for Greece has never really got started.

The target for the overall asset sale program has been downgraded to just 19 billion euros ($24 billion) by 2015, and it looks as if shipping may yet be the jewel in Greece's crown.

In the EU, Dutch ports handled nearly 15 percent of the total tonnage of goods in 2010, followed by U.K. ports with 14.1 percent, and Italian ports with 13.6 percent. Spain was in fourth place, with France fifth, according to Eurostat figures.

In terms of passenger transport, Italy was the overall leader, with close to 88 million passengers embarked and disembarked in 2010, the year for which latest figures were available. Greece was in second place, with 84 million passengers.

The largest passenger port in Europe remained Dover, with more than 13 million passengers embarking and disembarking, followed by the Greek ports of Paloukia Salaminas and Perama.

Included in the country's privatization program was the sale of stakes in up to 12 ports, including Piraeus, something that Faraclas has difficulty coming to terms with.

"Privatization is a difficult word for me," he said. "People have to realize that something is going from public to private hands. It no longer belongs to the state."

—Antonia Oprita, CNBC.com, contributed to this story