Challenges and Chances Ahead for Greece’s Coastal Shipping

Greece’s coastal shipping sector suffered a blow in the last year due to the ongoing Covid-19 pandemic with the renewal of its fleet being an urgent priority, said the 2021 Greek shipping report released this week by XRTC Business Consultants.

According to the report’s findings, fleet renewal will cost shipping companies nearly 3 billion euros in the next decade. A Hellenic Chamber of Shipping (NEE) and the Greek Shipowners Association for Passenger Ships (SEEN) study found that in 2030, 32.7 percent of the country’s fleet will be older than 40 years of age, while 18 ships older than 50 – which means that in the next decade Greece will have to replace at least half of its passenger ferry fleet.

At the same time, loan liabilities are at 683 million euros up by 2 percent against 2019, the XRTC report found. And all this while the health crisis and measures continue to take a bite out of coastal shipping services, which were up by 60 percent over 2020 but still not near pre-pandemic 2019 levels and further impacted by a 50 percent increase in fuel prices.

The sector is now faced with yet another challenging year due to the uncertainty surrounding the Covid crisis and tourism traffic as well as domestic travel, which “feeds” and supplies Greek island communities. Indicative of the decline in transport activity, according to the Hellenic Statistical Service (ELSTAT), passenger transport services dropped by 53 percent in 2020 against 2019 and of vehicles by 28 percent.

In June, Greek ferry operators called for immediate support measures and compensation to cover 200 million euros in losses suffered as a result of the Covid-19 pandemic.

Looking ahead, the report identifies a growing dynamic driven by established shipping investors. Analysts add that the period through to 2030 will offer opportunities for the sector to adapt to the new business environment and global conditions thanks in large part to EU recovery and resilience funding set to be channeled into sustainable growth.

Additionally, report analysts suggest the need for newbuilds made in Greece and serviced here which will accelerate shipbuilding activity with new constructions scheduled to start in three years’ time.

“Greek shipping is facing a time of disruption,” said XRTC Business Consultants founder and owner George Xiradakis, adding that the state has an “obligation to support” a sector that has and continues to contribute considerably to the economy and society.

Earlier this year, a report by the Foundation of Economic and Industrial Research (IOBE) found that it was vital for the sector to improve port infrastructure, comply with international environmental standards and accelerate fleet renewal.