GIG: What are the basic priorities of Greece’s shipping policy under the new government? What steps will the ministry take to develop Greece’s role in global shipping?
Plakiotakis: The maritime industry is the backbone of globalisation and international trade. The Greek maritime sector is one of the country’s most important sectors and a major creator of jobs. However, the industry is faced with tough competition in the world market: namely, a market undergoing rapid changes as a consequence of increased protectionism, but also changes to global trade patterns, the need to comply with new environmental rules, and a need to adapt to the digital era.
In order to sustain its leading position in global and fiercely competitive markets, the Ministry of Maritime Affairs and Insular Policy (MMAIP) attaches great importance to the implementation of a stable institutional environment for shipping activities; the adherence to the principles of free and fair competition; but also to the talent of Greek seafarers at sea and their high professional expertise. Efficiency in the provision of shipping services and the non-negotiable adherence to international standards on safety, security, and environmental performance underline the quality characteristics of Greek shipping. Those elements today constitute solid foundations on which the Greek shipping industry continues to thrive, despite the mounting competition from third countries.
The Greek Maritime Administration attributes great importance to the work of international organisations, as well as to the benefits of bilateral and multilateral maritime cooperation and diplomacy, in maintaining open and accessible maritime markets. To this end, Greece supports efforts for the further liberalisation of international maritime transport services in the context of the World Trade Organization (WTO), as well as negotiations at an EU and bilateral level, aiming at the conclusion of trade agreements securing access to global maritime markets.
In addition, we attach great importance to the adoption and effective implementation of uniform international shipping rules. In that context, the Greek Maritime Administration has constantly supported the International Maritime Organization’s (IMO) work as the only competent institution for achieving a level, global regulatory playing field on shipping matters to address operational, safety, and environmental issues. For those measures to be effective, they need to be based on sound socio-economic analysis, respecting the need to avoid unnecessary over-regulation. In the same vein, we firmly oppose trends of regionalisation, which do not pay a good service to a global industry.
GIG: What is your outlook for the sector? What are the key challenges that lie ahead?
Plakiotakis: The shipping industry is, by far, the most extroverted sector of the national economy, a leading global player, and a major source of income, wealth and prestige for Greece.
Greek shipping leads the international shipping industry by providing high-quality maritime services with a modern fleet and by operating with the most up-to-date management techniques as well as the highest safety and environmental standards.
The Greek merchant fleet counts more than 670 ships, and it is placed 8th on a global level. In addition to the national fleet, Greek shipowners control a total number of more than 4,536 vessels of various categories, with a carrying capacity of about 349 million DWT – distributed among different flags around the globe. The Greek-owned fleet ranks first, accounting for 18% and 53% of the global and EU DWT respectively.
The Greek shipping cluster is a uniquely successful bright spot in the Greek economy. More than 1,430 shipping companies – active in ocean-going shipping – and an additional 3,674 maritime companies – mainly active in cabotage and short-sea shipping – operate in Greece. This highlights Piraeus as a worldwide maritime centre and a base of expertise in the technical and commercial management of vessels. These companies offer direct employment to over 16,000 employees and constitute the driving force for the entire maritime cluster, employing, directly and indirectly, 190,000 people. The key contributing factor to the cluster’s competitiveness is the fact that it boasts the highest degree of experience and expertise in what is a genuinely competitive environment.
Greek shipping remains a reliable strategic provider of quality maritime transport services for its trading partners, at both a governmental and a private level. The average age of the Greek-owned fleet is 11.74 years, whilst the average age of the world fleet is 15.2 years. Greece remains a confirmed party to the UN IMO International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW) and on the White List of both the Paris and the Tokyo Memorandum of Understanding, while it is one of the safest fleets worldwide with only 0.43% of the fleet and 0.11% of total tonnage being involved in minor accidents.
In general, the receipts in the services balance of payments (BOP) from maritime transport are estimated at approximately €16,629 million for 2018, representing 9% of the national GDP.
The contribution of Greek shipping to the country is as important as it is diverse, going beyond the receipts in the services BOP from maritime transport services. It ranges from indirect economic investments to employment opportunities. And it also includes raising the profile of the country internationally by being an essential and strategic trade partner of major economic and political forces, with 22.5% and 20.3% of the Greek-owned fleet’s activity being dedicated to U.S. and European trade respectively, and with the greatest share of the Greek-owned fleet’s activity, i.e. 31.8%, taking place in Asia and serving the fast growing Asian economies.
GIG: What will you do to boost the number of vessels carrying the Greek flag?
Plakiotakis: The Greek-owned fleet is placed 1st on a global scale and 8th considering only the vessels that are under Greek flag. Greek shipowners control a total number of more than 4,536 vessels of various categories, with a carrying capacity of 349.19 million DWT approximately distributed among 40 different flags around the globe. As a result, the Greek-owned fleet ranks 1st, accounting for 18% and 53% of the global and EU DWT respectively.
At the MMAIP, our strategic objective is to strengthen the Greek registry. In a fleet of about 4,536 ships, the Greek flag represents about 14%. The Greek merchant fleet counts 670 ships. The Greek flag needs to be reinforced.
The numbers are low, and our goal is to strengthen this area. The Greek flag is a strategic choice, and it means strengthening Greek values, principles, culture, and history.
Our ministry is focused on creating a competitive fleet. We need to reduce bureaucracy, and we will make difficult decisions if we have to. This move is also linked to unemployment, which many young people face, and will make the maritime profession even more prominent in a maritime country such as Greece.
Our shipping policy priorities to enhance the attractiveness of the Greek registry can be summarised as follows:
- The existing legislative framework for the registration of ocean-going vessels to the Greek register enjoys higher ranking within the national legal order (Article 107 of the Greek Constitution) and guarantees the necessary stable legal environment for shipping investments. In order to register a vessel under the aforementioned provisions, an irrevocable administrative act is issued establishing the concrete terms and conditions for the operating of a particular vessel throughout the period during which the Greek flag will be flown.
- Maritime operations are subject to a stable taxation regime, which aims at enhancing the dynamics of the marine economy, preserving maritime know-how, and enhancing employment opportunities for Greek seafarers and in shipping companies ashore.
- Digitalisation, optimisation, and the promotion of electronic procedures to further facilitate ship and company registration is among the prime priorities for the MMAIP.
- The further development of Piraeus as the centre of Greek shipping is a major priority of the MMAIP and is directly linked to the strengthening of academic and professional education facilities to maintain and further enhance Greek maritime know-how. In this context, the aim is to establish structures that promote specialisation and further contribute to the development and dissemination of the rich maritime knowledge base, factors that will finally result in broadening the competitive edge of Piraeus and Greek shipping as a whole.
- The expertise and professionalism of Greek seafarers contribute to the competitiveness of the Greek and Greek-owned shipping. The preservation and expansion of those features is also a main priority for Greece as part of our commitment to Greek human capital. As a consequence, investing in the training of the human element in shipping – the Greek seafarer – is the necessary requirement for shipping to remain competitive on the global stage and constitutes the most important growth driver for Greece.
- Τhe Greek Maritime Administration also attributes great importance to the work of international organisations, as well as to the benefits of bilateral and multilateral maritime cooperation and diplomacy. To this end, Greece continues to play a significant role in the development of safety, security, and environmental standards and actively seeks to promote the consensual spirit within the International Maritime Organization, pre-empting trends of regionalisation.
GIG: Greece has launched an ambitious plan to develop its ports across the country. Can you tell us a little bit about this? What will the ministry do to make Piraeus the world’s leading maritime centre?
Plakiotakis: COSCO’s investment in Piraeus is perhaps the most significant foreign direct investment (FDI) in Greece nowadays. It could also be considered as a pilot for other FDIs. COSCO is a well-known global player in the market, with profound know-how as a global terminal operator and a shipping company as well. Due to COSCO’s presence, Piraeus port is gradually becoming one of the largest European ports and one of the most significant ports of the Mediterranean Basin.
COSCO’s strategic movement to invest in Piraeus shows the importance of the port and its prospects. The investment put Piraeus on the global transportation map, since Piraeus is being transformed from a regional hub into a global transport corridor and a key player in logistics chains. This becomes evident within the context of great transport initiatives such as the Trans-European Transport Network and the Belt and Road Initiative (the Maritime Silk Road). It should be stressed that the Port Authority of Piraeus has developed bilateral relations and has signed memoranda of understanding with the Chinese ports of Shanghai, Tsingtao, and Guangzhou, as well as with the port of Alexandria in Egypt.
The revised Master Plan of the Port of Piraeus submitted by the Piraeus Port Authority (OLP S.A.) envisages investments of €610 million. The Port Planning and Development Committee recently approved most of the projects of the revised Master Plan and will examine the new proposed projects (the construction of the fourth pier and the car terminal).
The Piraeus Container Terminal is a flagship project that marks the beginning of a significant collaboration that we expect will continue to evolve at many different levels in the coming years, always being a focal point for the New Silk Road. The government of Prime Minister Kyriakos Mitsotakis really wants to promote investments. We are working towards this direction and this is evidenced by the early adoption of COSCO’s Master Plan in the Port of Piraeus, which was implemented in a short period of time. This investment marks the start of a new era for the Port of Piraeus.
The Hellenic Republic Asset Development Fund (HRADF) will present sustainability studies in the coming period for all ten major ports in the country. Greece is a crossroads between three continents. We must take advantage of the political situation in Greece because for the first time in years we have a strong government and a strong prime minister who has a specific strategy from the beginning. We will do our best, and I believe we will change the course of the country.
GIG: What scope do you see for greater maritime cooperation on the international front?
Plakiotakis: Recognising the contribution of shipping to the national economy and to the Greek society in general, Greece supports – on a constant basis – shipping activities. It does this through a coherent institutional framework with positive measures aimed at fostering the competitiveness of the maritime sector on the international scene, ensuring high-level representation in the EU and international organisations while guaranteeing a stable business environment for the further development of the Greek fleet and maritime cluster.
Greek shipping leads the international shipping industry by providing high-quality maritime services with a modern fleet and operating with the most up-to-date management techniques and the highest safety and environmental standards. The Greek flag is generally recognised as a ‘quality flag’, with a fleet of both traditional (mainly bulk carriers and tankers) and specialised (LNG, LPG) ship types of state-of-the-art technology. It offers specific advantages and quality characteristics that render it competitive in the international maritime field.
From our side, we are closely following international developments in shipping and adapt our strategy with a view to securing the long-term competitiveness of our maritime industry.
Around a large shipping cluster with shipyards and a management centre, as Greece is, a network of ancillary services is being developed that can make a strong contribution to the national economy such as:
- Freight forwarding services;
- Brokerage services;
- Boat power supplies;
- Ship equipment;
- Radio telecommunications;
- Legal services.
For these reasons, what is needed is competitive and quality services. The state seeks to simplify the regulatory framework and achieve political alignment with the objectives of the relevant European policy.
GIG: Can you tell us more about Greece’s new relationship with China after the visit to Greece by the Chinese premier in November? What benefits will this bring?
Plakiotakis: The strategic relations between China and Greece are multiannual, especially in the shipping sector, as they have been around for almost sixty years. Even today, approaches of Greek ships to Chinese ports are numerous. Indicatively, it is reported that in 2018, 35% of Greek ships approached a Chinese port at least once.
Of particular importance is the Chinese shipbuilding industry, which Greek shipowners have a firm trust in, contributing decisively to their worldwide leadership in new shipbuilding, repair, and the installation of new equipment. Over the past 15 years, Greeks have built nearly 1,000 ships in China, worth more than €60 billion.
During the contacts, the bases were set for the Chinese shipbuilding industry to include Greek equipment and Greek manufacturers among its suppliers.
Of particular interest is the exchange of know-how on port organisation and operation. After all, the accession of our country to the New Silk Road and the 17 + 1 initiative clearly demonstrates that the Greek ports, because of their strategic geographical location, can serve as focal points for the transit of Chinese and Asian products to EU market countries, the Balkans, and the Black Sea in general.
Specifically, the Port of Piraeus has become one of the most important investments of COSCO, with the aim of transforming it into the largest container port in Europe while being a strategic hub on the New Silk Road.
Investments in recent years create a new momentum in the port industry of our country. Currently, new investment opportunities are being opened in the port sector, combined with transport development, logistics, and cruising.
During our meeting, the President of COSCO, Captain Xu Lirong, reiterated the group’s intention to invest vigorously so that the container terminal station would have the capacity to handle at least 10 million TEUs per year. Achieving this goal would bring Piraeus into the top three of Europe’s largest trading ports.
As for the remaining ten ports in Greece, there are investment prospects that are expected to be more clearly defined after the completion of the ongoing viability studies. These are the ports of Patras, Igoumenitsa, Heraklion, Kavala, Volos, Elefsina, Lavrion, Rafina, Corfu, and Alexandroupolis.
Apart from the port sector, we look forward to our cooperation in other areas such as infrastructure, energy, maritime relations, and tourism.
GIG: What more can you do to encourage more young Greeks to seek a career in the key shipping and maritime sector? Are Greece’s maritime educational facilities adequate for the future needs of the sector?
Plakiotakis: The enhancement and modernisation of maritime education is a high priority for our government as well as the revival of Greek seafaring. The maritime know-how we possess as a nation must be preserved, and there must be a sufficient number of highly trained officers. At the same time, the maritime profession, even in the lower crews, can be a way out of the high unemployment that exists in our country. In this context, a holistic plan is needed to address the weaknesses of the existing maritime educational system. At the same time, we should not demonise private marine training. Other neighbouring countries, without our maritime tradition and know-how, have established private maritime academies, and it is regrettable that Greeks do choose to study there, as in Greece the maritime academies accept a limited number of students and lag behind with regard to the number of teachers and infrastructures.
We inaugurated the Executive Training Centre of Merchant Marine (KESEN) in Macedonia, which started operating immediately, while in parallel – and with the valuable contribution of the Union of Greek Shipowners (UGS) – we renovated most of the premises of the Merchant Marine Academy of Aspropyrgos, which were damaged by the recent earthquake. Day by day, we make every effort to enhance the country’s merchant marine academies.
GIG: The European Commission predicts pollution from ships will account for 17% of global emissions by 2050. The IMO’s Marine Environment Protection Committee (MEPC) has established ambitious objectives, including the reduction of at least 50% of greenhouse emissions by 2050 as compared with 2008. What are your views on this initiative? How would you describe Greece’s position and participation in the decarbonisation of the shipping industry?
Plakiotakis: The reduction of CO2 emissions from shipping constitutes one of the major challenges of our time. In this respect, Greece submitted to the UN IMO’s Intersessional Working Group in November, 2019, on the Reduction of Green House Gas Emissions from Ships (ISWG – GHG), a proposal of short-term prescriptive measures appropriate for the business model of bulk/tramp shipping. Such prescriptive measures, which can greatly assist the IMO in achieving its strategic emission reduction targets, should fully involve ships’ commercial operators (namely the charterers) who are usually ultimately responsible for the type and quantities of cargo, for the vessels’ service speed, and for purchasing bunker fuels.
Our aspiration is to have our proposal included in the list of short-term measures to be further considered and evaluated by the IMO’s competent bodies, particularly taking into account that an exclusively goal-based approach, which includes mandatory operational efficiency indexing of individual ships, is inappropriate and unworkable for bulk/tramp shipping.
Having reached the date, in January 2020, of the universal application of 0.5% as the maximum sulphur content of marine fuels, the need to ensure the availability and adequacy of compliant fossil fuels, as well as the need to resolve issues related to compliance, quality, and safety requirements, are of major importance to mitigate the concerns of the international maritime community.
Concerning ship safety issues, the international implementation of the recommendations of IMO Maritime Safety Committee Decision MSC.465 (101) is particularly important as it is directly connected with the new threshold and the primary role of fuel suppliers. On this basis, we are already promoting the necessary laws and regulations with a focus on the provision of sanctions for non-compliant fuel suppliers.
Alternative means of compliance to the 0.5% limit are required because scrubbers are not an overall solution. The overall solution will only come about by ensuring the global adequacy of safe, compliant fuels through the commitment of the oil industry. The IMO has already opened the debate on the environmental impact of scrubbers within the corresponding committee of experts – in which our country has appointed an official from the Massachusetts Institute of Technology (MIT). We keep a close eye on developments and look forward to the findings of the next steps.
There must be a commitment to the implementation of the goals of the initial IMO-GHG strategy, which are the only realistic ones (40% energy efficiency improvement by 2030 and 50% absolute GHG emission reduction by 2050). To achieve the first goal, our country submitted a proposal for consideration at the IMO’s 6th Working Group on Reduction of GHG Emissions from Ships
The proposal is on short-term measures to improve the energy efficiency of existing ships, focusing mainly on compulsory compliance with the Ship Energy Efficiency Plan (SEEMP), the obligation to reduce the maximum engine power to vessels of the same class, and the adoption, through the International Convention for the Prevention of Pollution from Ships (MARPOL), of mandatory measures.
Innovation and the development of alternative fuels is the ultimate solution to the GHG issue. Most of the weight falls on alternative fuels which will make a significant contribution in the long run. We need to focus on research (the proposal we have submitted is supported by a research study) looking at most appropriate measures for each category of ship. The MMAIP is particularly aware of environmental objectives. My ambition is to demonstrate that Greece deserves to and must have a leading role in forming the shipping agenda at a global level.