Boston, MA -- (SBWIRE) -- 06/06/2012 -- Greek shipping, like other sectors, face a tough operating environment. Domestic demand is stymied by the economic outlook, with Greece estimated to remain in recession for another year, its fourth in a row. Unemployment is at a high and consumer spending, understandably, is down.

Total tonnage throughput at the country's ports highlight the tough economic environment in Greece, with BMI forecasting total tonnage at the ports of Piraeus and Thessaloniki to decrease by 1.1% and 3.5% respectively following an estimated throughput decline of 2% at Piraeus in 2011 and volumes at Thessaloniki dropping by 15%.

Box growth, although forecast to slow in 2012, is holding up well considering the demand conditions. The country's container sector is benefiting somewhat from the fact that it has diversified its role away from domestic demand, with its facilities also playing transhipment and transit roles. We forecast that container throughput at Piraeus will increase by 25% in 2012 and that container volumes through the Port of Thessaloniki will increase by 5.54%.

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BMI highlights the Port of Piraeus' container throughput as the outperformer, with the facility benefiting from COSCO Pacific's operations at the port. We note the 'COSCO Effect', with box volumes at the port increasing by 152.7% since the Chinese port operator began operations at the facility in 2009.

The inclusion of global port operators, which bring investment and expertise, in container operations traditionally drives up container throughput growth. We therefore highlight that Greece's plans to privatise stakes in both Piraeus and Thessaloniki offers medium-term upside risk. So far global terminal operator ICTSI has expressed interest in the privatisation drive.

While privatisation will in the long run be beneficial for Greece's container shipping sector, we note the short-term risk associated with it. The awarding of the Piraeus concession to COSCO Pacific led to rolling strikes, which severely damaged the port's box throughput, with container levels declining by 68.4%. Greece's privatisation plans have been condemned by unions, and a strike over the issue took place in June 2010. We believe that as the privatisation drive moves forward, further industrial action is likely.

Headline Industry Data

- 2012 Port of Piraeus tonnage throughput forecast to decrease 1%, over the medium term we project a 0.7% increase.
- 2012 Port of Piraeus container throughput forecast to increase 25%, over the medium term we project a 39.3% increase.
- 2012 total trade growth forecast at -2.14%.

Key Industry Trends

China Offers Greek Owners Cheap Credit To Order At Yards

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