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Recently released market study: Greece Freight Transport Report 2013

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2013-02-24 15:19:57 - Fast Market Research recommends "Greece Freight Transport Report 2013" from Business Monitor International, now available

BMI View: The Crisis Rumbles On

The 2013 outlook for the Greek freight sector is 'more of the same', as the country struggles through its fifth consecutive year of recession. To state the obvious, this is not a good environment for the freight transport industry. BMI expects GDP to contract by 6.9% in 2012, and to fall again by a further 4.1% in 2013. However, there is reason to believe that the country will begin to turn the corner during the course of 2013 and in fact we are predicting that 2014 will see the economy growing for the first time since the onset of the crisis, with expansion of 1.7%. One small but important change in 2013 will be that

foreign trade will grow by 3.4% in real terms, the first positive growth number to come through on this front after three years of contraction. We take the view that exports and, eventually, investment, will lead the recovery when it comes (private consumption and government spending will remain in the doldrums for years). Our medium-term outlook is for the Greek economy to grow by an annual average of 0.6% to 2017.

Full Report Details at
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Looking at specific transport modes, the good news is that there is some upside. The port sector has sidestepped the worst of the crisis, given the importance of transhipment business and some critically important new investment. And while the other transport modes such as road, rail, and airfreight have been severely battered by the crisis, we think that over the medium term they will be able to grow at a faster-than-GDP rate.

Headline Industry Data

* Air freight cargo set to drop 1.3% in 2013 to 68,100 tonnes, the fifth consecutive year of contraction.
* 2013 will see moderate growth in tonnage throughput at the country's two main ports: Thessaloniki (up 2.4% to 16.071mn tonnes) and Piraeus (up 4.8% to 13.638mn tonnes).
* Rail freight volume set to fall 1.5% to 2.654mn tonnes in 2013.
* Road haulage will be down by 1.6% to 465.570mn tonnes.
* The real value of Greek trade (imports + exports) will grow by 3.4%, following three years of contraction.

Key Industry Trends

Piraeus Shows Smart Footwork In A Tight Spot

The Port of Piraeus is showing how to come through a recession in style. A deal between terminal operator COSCO Pacific and Hewlett Packard means the port is being used as a distribution hub for the computer manufacturer. This has led the Greek Development Ministry to suggest cargo volumes could increase by as much as 50%. Hewlett Packard's choice of the port of Piraeus as its distribution hub supports BMI's long-held view that the facility's location offers it the ability to develop into a transhipment hub for the EMEA region. It is situated close to the mouth of the Suez Canal, and therefore the major Asia-Europe trade route offering transhipment options for goods into the Black Sea, the Mediterranean, the Adriatic and North Africa.

Russia Expresses Interest in Rail Privatisation

Although the process of privatising Greece's two state-owned train companies, track and infrastructure group OSE and train operator Trainose, looks like being lengthy, there are some interested buyers, including Russian Railways. Separately there were reports that private Romanian rail operator Grup Ferroviar Roman (GFR) was interested in the cargo business. The sale of the two Greek rail companies is included in the government's wider privatisation programme secured in return for the first EUR130bn Greek financial rescue package. Under the European Union timetable, the tender process for the sale of Trainose was due to open in Q412, with the hope that a transaction would be completed by the spring of 2013.

Consolidation In The Air As Aegean Takes Over Olympic

Privately-owned Aegean Airlines has taken over Olympic Air as part of a EUR72mn (US$94mn) transaction. A merger attempt by the same two Greek airlines in early 2011 had failed because the European Commission blocked it on the grounds that it would have created a dominant player in the domestic market. This time round, however, analysts believed regulatory approval would be forthcoming, as the regional market has become more competitive with the expansion of Cyprus Air. Aegean's chairman Theodoros Vassilakis pointed out that the two airlines had spent in recent years US$2bn to renew their fleets, but their small scale, combined with the domestic economic crisis, had limited their ability to compete against rivals in Europe and globally, leading them to further losses and reduced size and scope.

Key Risks To Outlook

There remains a significant downside risk to our freight transport outlook, based on the danger that the macroeconomic situation may worsen further. While BMI argues that the worst is now over, in practical terms Greece may suffer a relapse at various points. First, Greek politics will remain volatile and any breakdown in the governing coalition may call the austerity programme into question, alarm the markets, and risk a steeper downturn. Second, a break-up or realignment of the current eurozone cannot be excluded; depending on how it may play out, Greece could again end up worse off. Thirdly, the evolution of industrial relations also must be considered, as a resumption of protest strikes could have a major downside impact on the highly unionised freight industry.

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at

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