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Ferry Sector Suffers from Rising Costs and Flagging Demands

ploioCoastal shipping in Greece is in danger as companies face serious financial problems in recent years, according to a survey by the Foundation for Economic and Industrial Research (IOBE) presented on Tuesday in Piraeus.
According to Kathimerini daily, the survey also shows the sector’s significant contribution to the economy, estimated at 1.5 billion euros in 2013, while accounting for 21,400 jobs including almost 5,000 office positions in the industry’s firms. The indirect impact of coastal shipping on the Greek economy through the growth of tourism and the support of the islands’ primary and secondary sectors is very significant, as the total contribution of coastal shipping amounted to 15.4 billion euros or 8.5 percent of the country’s GDP last year.
The economic crisis has generated financial problems that have accumulated in recent years and pose a serious threat even to the biggest coastal shipping companies. The IOBE report shows that demand for constant shipping services has been on a constant decline in Greece since 2010. From 2009 to 2012, the total number of passengers dropped from 16.8 million to 12.8 million per year, or a 24 percent drop over three years. Similarly, the number of private cars shipped went down by 29 percent to 1.7 million, and trucks carried also declined by 29 percent to 618,000.
Along with the drop in demand, operation costs soared due to the constant rise in fuel prices in recent years, creating increasing losses to coastal shipping companies.
Right now, the sector has a serious cash flow problem and at the same time creditors put more pressure on loans. The IOBE report stresses the need for an immediate reduction in ferry operations costs, with less but more qualified staff, or the reduction of the obligatory chartering of ferries on regular lines.

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