82569 Greek Logistics Unlocking Growth Potential through Regulatory Reform and Complementary Measures November 2013 Greek Logistics Unlocking Growth Potential through Regulatory Reform and Complementary Measures November 2013 Contents | iii Contents Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi CHAPTER 1: Logistics in Greece: Importance to the Economic Recovery, Opportunities and Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Economic recovery and the role of logistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 How well is Greece doing in logistics compared to others? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Trade costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Logistics performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Maritime connectivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Logistics practices and network in Greece . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 CHAPTER 2: A Detailed Review of the Greek Logistics Setting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Institutional challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 A complex regulatory framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Fragmented implementation and enforcement of logistics policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 The transport industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Road transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Rail transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Ferry shipping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Ports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Logistics services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Third-party logistics providers (3PLs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Warehousing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Logistics Zones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Trade facilitation and transit issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Trade facilitation challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Challenges in Customs Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Road and Rail Transit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Other challenges affecting supply-chain operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 CHAPTER 3: Recommendations and Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Overcoming institutional hurdles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Prepare a National Logistics Strategy and institutionalize the private-public sector, results oriented dialogue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Simplify procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 iv | Greek Logistics Improve the coordination between key agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Develop a monitoring and evaluation framework for greater transparency . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Develop a consistent and coherent training and certification system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Encourage the private sector to promote Greek logistics domestically and abroad . . . . . . . . . . . . . . . . . . . . . . 47 Transport industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Road transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Rail transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Ferry shipping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Ports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Logistics industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Legal and regulatory changes to enhance investment in modern logistics facilities . . . . . . . . . . . . . . . . . . . . . 50 Reduce deviations from mainstream EU practices in supply chain management . . . . . . . . . . . . . . . . . . . . . . . 53 International trade and transit issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Suggested improvements relating to customs issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 The Logistics Permanent Committee: scope of the work and Appendix 1:  collaboration with the World Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 The Logistics Permanent Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Working groups of the Logistics Permanent Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Regulatory barriers in logistics service provision and supply chain management . . . . . . . . . . . . . . . . . . . . . . . 59 Stimulating professionalism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Pre-conditions for logistics centers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Enforcement of transport regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Enhancing competitiveness – Operationalizing the National Logistics Strategy . . . . . . . . . . . . . . . . . . . . . . . . 62 Mapping, monitoring and evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 World Bank’s Suggestions on the Scope of a Appendix 2:  National Logistics Strategy or Master Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 National Logistics Strategy vs. a Master Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Timeframe covered in a National Logistics Strategy and a Master Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 The scope of a National Logistics Master Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 The Timeline for producing a National Logistics Master Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Appendix 3: Roadside enforcement in Greece . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Appendix 4: Road infrastructure in Greece - a brief overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 Contents | v List of Figures Exports will drive growth in the near future (percent change) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Figure 1.1:  Greece ranks poorly on clustering and value chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Figure 1.2:  Greece ranks low in border administration and transport infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . 2 Figure 1.3:  Trade and GDP can increase drastically with improvements in trade facilitation . . . . . . . . . . . . . . . . . . . . 2 Figure 1.4:  Figure 1.5: Sea transport is doing well in Greece . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Figure 1.6: Bilateral trade costs for Greece and comparator countries (ad valorem equivalent) . . . . . . . . . . . . . . . . . 5 Greece ranks low in logistics compared to its neighbors… (LPI ranking, 2012) . . . . . . . . . . . . . . . . . . . . 6 Figure 1.7:  …And performs below countries with similar per capita income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Figure 1.8:  Logistics performance is below Western Europe in all its components in 2012… . . . . . . . . . . . . . . . . . . . 7 Figure 1.9:  …and has deteriorated since 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Figure 1.10:  Greece ranks 25th in the world on container shipping connectivity . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Figure 1.11:  Greece shows a large improvement in container shipping connectivity in 2012 (base=100 in 2004) . . . . . . 8 Figure 1.12:  Big potential ahead: container volumes of Piraeus still small compared to Greece’s neighbors . . . . . . . . . 9 Figure 1.13:  Figure 1.14: Logistics services in a typical supply chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Distribution network of a single consumer product in Greece: not an easy matter . . . . . . . . . . . . . . . . 10 Figure 1.15:  Greek logistics services (in billion Euros) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Figure 1.16:  Rail: the big absent (volume and value of exports using various modes of transport) . . . . . . . . . . . . . . 10 Figure 1.17:  An industry dominated by own-account trucks across the country . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Figure 2.1:  The trucking sector in Greece and its neighboring countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Figure 2.2:  Figure 2.3: Greece (HR) ranks low against other European countries in rail transport of goods . . . . . . . . . . . . . . . . . 21 A declining trend in ferry shipping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Figure 2.4:  Figure 2.5: The Adriatic-Aegean ferry routes in May 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 The Adriatic-Aegean ferry market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Figure 2.6:  Tight competition between Attica Group (owner of Superfast ferries) and ANEK Lines S.A. . . . . . . . . . . . 24 Figure 2.7:  Figure 2.8: The permit system applicable to warehouses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 TIR Carnets dropped drastically in Greece . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Figure 2.9:  TIR Carnets in Greece and its neighbors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Figure 2.10:  Examples of issues at operational, tactical and strategic levels in Greece logistics environment . . . . . . . . . 41 Figure 3.1:  Figure 3.2: Example of transport data collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Figure 3.3: A Suggested Framework to Help Define Useful KPIs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Figure 3.4: Types of Certification in Logistics and Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Figure 3.5: Proposals of simplification for the establishment of organized logistics parks . . . . . . . . . . . . . . . . . . . . 51 Figure 3.6: Proposed simplifications of licensing for warehouses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Main roles of the Ministry, private sector and The World Bank in the logistics strategy work . . . . . . . . . . 57 Figure A1.1:  vi | Greek Logistics Emphasis of work by the Logistics Permanent Committee and its short and medium Figure A1.2:  term working groups by May 2013 in view of the issues outlined by The World Bank team in February 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 The main elements in the Logistics Strategy work in Finland 2009–2012, Figure A2.1:  Ministry of Transport and Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Figure A4.1: E-roads network in Greece and neighboring countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 Figure A4.2: TEN-T Network: Comprehensive and Core Road Network for Greece . . . . . . . . . . . . . . . . . . . . . . . . . 81 List of Boxes Box 1: Voices of the Private Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Box 2. Logistics: What Matters to Improve Supply Chains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Box 3: Understanding the logistics regulatory maze: Examples of complexity . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Case study - Number of certificates needed for selling a second-hand truck in Greece . . . . . . . . . . . . . . . . 17 Box 4:   xamples of the sequence of administrative processes for warehouses under licensing for Box 5: E industrial activities and for licensing for freight-forwarding activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Box 6: The National Trade Facilitation Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Box 7: New legislation on Customs Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Box A1.1: Previous Experiences of National Logistics Committees in Greece . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Box A1.2: Guidelines for the work of the project groups and sub-committees of the LPC . . . . . . . . . . . . . . . . . . . 60 Box A2.1: Tentative Structure of the Logistics Master Plan for Greece . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Box A2.2: Examples of national logistics/transport strategies, Master Plans, or equivalent . . . . . . . . . . . . . . . . . . . 69 List of Tables Table 2.1: Fees have three components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Policy maker/regulator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Table A3.1:  Table A3.2: Current legislation on inspection of roadside transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 Acknowledgements T his report was prepared by the World Bank’s International Trade Unit in the Poverty Reduction and Economic Man- agement Network (PRMTR) and by the World Bank’s Transport Unit of the Europe and Central Asia Vice Presidency (ECSTR) upon the request of the Ministry of Development, Competitiveness, Infrastructure, Transport and Networks (currently split into the Ministry of Development and Competitiveness and the Ministry of Infrastructure, Transport and Net- works). The report is part of a technical assistance package provided by the World Bank Group to the Government of Greece on enhancing the business environment and trade logistics. The package has been facilitated by the Task Force for Greece (TFGR, an arm of the European Commission), which arranged the financing from the EC technical assistance budget. The report was prepared by Daria Taglioni (Task Manager and Senior Trade Economist, PRMTR), Baher El-Hifnawi (Co-Task Manager and Lead Transport Economist, ECSTR), Jean-Francois Arvis (Senior Transport Economist, PRMTR) and Lauri Ojala (World Bank Consultant and Professor of Logistics at Turku School of Economics) under the overall guidance of Dirk Reinermann (Program Manager, Europe and Central Asia Vice Presidency), Paloma Anos Casero (Sector Manager, Europe and Central Asia Finance and Private Sector; ECSF1), Mona Haddad (Sector Manager, PRMTR) and Juan Gaviria (Sector Manager, ECSTR). The engagement with Greece was initiated and supported by Philippe Le Houerou (Regional Vice Presi- dent, World Bank). Substantial contributions to the assignment from Julia Burr Oliver are kindly acknowledged. The report also benefited from contributions from John Arnold, Jean Pierre-Carre, Frans Copini, Alvaro Gonzalez, Thomas Haven, Yves Lafargue, and Virginia Tanase. Comments received from peer reviewers and other experts including: Marc Juhel, David Rosenblatt, Jordan Schwartz, Aristomene Varoudakis, Christos Kostopoulos and Robin Carruthers, greatly enhanced the quality of the report. The team would also like to acknowledge the support of Nikos Schmidt and Aris Molfetas in liaising with the different stakeholders and coordinating with the client. We are also grateful to Shienny Lie for her assistance on ad- ministrative issues. The proposals contained in the report were discussed at length with the Greek Logistics Permanent Committee, its topical working groups and a wide range of other public and private sector stakeholders in Greece. This includes general managers and logistics executives of major providers and users of transport and logistics services, representatives of category associations as well as civil servants from the Ministry of Development and Competitiveness, the Ministry of Infrastructure, Transport and Networks, the Ministry of Finance, the Ministry of Environment, the Hellenic Statistical Office, the Fire Department, the Taskforce for Greece. The sole responsibility for the proposals rests however with the World Bank. The Greek government, the Logistics Permanent Committee, or the private sector in Greece do not necessarily share the views presented in this report. Executive Summary I n a detailed review of Greece’s logistics environment, this report finds that the Greek government could act in a number of ways to improve the efficiency and viability of its transport and logistics sectors. While there is not one single, major reform that will act as a silver bullet, the report identifies realistic reforms that could significantly improve Greece’s business environment. These fall in two basic categories: (1) reforms to transformational sectors, which would be “big wins,” but are politically difficult and require significant investment; and (2) smaller “micro-initiatives,” that will help to boost the viability of existing businesses and encourage competition and efficiency gains in Greek logistics. In the first category are improvements to the trucking, railway, and port industries. Ongoing efforts to liberalize the trucking industry could be accelerated by reducing or eliminating unnecessary administrative restrictions. For example, the govern- ment could lift limits on the number of trailer units that can be attached to a tractor, or simplify the process of change of property of trucks. Other measures that could be reduced or eliminated are those moderating the pace of reform, including a concession to industry advocates that allows for better conditions in the sale and transfer of trucking licenses issued under the old, closed regime. Rail has the potential to grow into a private sector artery between the privately run Piraeus container port and markets in Europe. Therefore, immediate priorities may be the full electrification of the main train lines, the privatization of TRAINOSE, the state-owned rail operator, and infrastructure investment to enhance the EU transport corridor—known as “Corridor X”—that connects Greece to Central Europe through the Balkans. The ports could continue to facilitate this strate- gic connection with the rail line. In the second category are factors holding back the modernization of the logistics industry. These are primarily related to the design and implementation of government regulations. In particular, the government may want to consider simplifying and speeding the execution of licensing for warehouse construction, including revising onerous fire safety regulation to align more closely with European standards. The Government may want to also simplify and clarify steps required to become a third-party logistics provider. To help modernize the sector, the Government may consider establishing a comprehensive legal framework for logistics oper- ations, based on outcomes rather than prescriptions, as is currently the case. In addition, because these reforms will take time, the Government may make concerted efforts to institutionalize a nimble and flexible vehicle for executing them, such as an advisory body that will survive changes of government. In short, the report recommends that the Government collaborate with the private sector to: 1. Look at the big picture: Develop concrete logistics priorities, set in place a mechanism for sustaining the policy action over time with coherence and flexibility, simplify procedures, improve coordination between agencies and communication with the public, promote professionalism in the sector, and enforce regulations in a systematic and predictable manner to minimize costs and delays. 2. Invest strategically: Ensure that logistics infrastructure does more to connect Greece to Europe through the most cost-effi- cient routes, and place emphasis on the rail and port sectors. x | Greek Logistics 3. Target medium- to long-term market demand and build a reputation for high-quality service and reliability: Support the modernization of logistics service providers, promote the phasing-out or the reconversion of low-quality informal clusters into well-developed logistics parks, enact regulations that simplify licensing, encourage investment in logistics and the use of outsourced logistics services, align legislation on the safety and security of establishments with best European practices, clarify scope, taxation, and conditions of operation of logistics services and required qualifications, and make the Greek logistics industry more competitive and sophisticated overall. 4. Facilitate international trade: continue to streamline customs and fiscal procedures. Introduction T he World Bank Group (WBG) wrote this report as part of a project designed to assess the competitiveness of the logis- tics sector in Greece and to develop policy recommendations. The World Bank is carrying out the project at the request of the Greek Ministry of Development, Competitiveness, Infrastructure, Transport, and Networks (currently split into the Ministry of Development and Competitiveness and the Ministry of Infrastructure, Transport and Networks). The report is part of a technical assistance package provided by the World Bank Group to the Government of Greece on enhancing the business environment and trade logistics. The package has been facilitated by the Task Force for Greece (TFGR, an arm of the European Commission), which arranged the financing from the EC technical assistance budget. The document is structured in the following way: First, it provides an overview of the state of logistics in Greece, comparing the country to its peers and highlighting some of the important features that distinguish the country’s situation. Second, it pro- vides detailed, technical observations on specific aspects of the logistics environment in Greece. Third, the report describes key actions—drawn from both expert observations and the working groups’ conclusions—that the Greek government may want to undertake to improve its logistics performance. Finally, in the Annexes it describes the intensive, consultation process that is allowing key stakeholders within the business and policy-making communities in Greece to provide inputs for a National Logistics Strategy. CHAPTER 1: Logistics in Greece: Importance to the Economic Recovery, Opportunities and Challenges Economic recovery and the ter foreign markets. Small and medium enterprises (SMEs) role of logistics account for the bulk of manufacturing firms in Greece and are often unable to realize the economies of scale needed for G reece’s economic recovery will take time and new trade, since according to the Hellenic Federation of Enter- sources of growth. Exports will likely play an im- prises (SEV) only 27 percent of manufacturing firms have portant role in that recovery, especially through more than 250 employees. While the predominantly small 2014, according to International Monetary Fund projections size of Greek manufacturing firms may have cultural roots, (Figure 1.1). Raising exports will not be easy, however, giv- part of the phenomenon can be attributed to a constraining en continued weak demand in major European Union (EU) and often distortive regulatory framework that possibly lim- markets. In addition, goods exports have to grow from a low its firm growth. Efficient logistics can promote scale econo- base and diversify. On the services exports side, shipping mies and clustering of activities, helping firms overcome size is highly dependent on the global economy, and tourism is disadvantages. unlikely to grow dramatically. However, positive signs are already emerging. After exports contracted by 0.3 percent Currently Greece ranks relatively poorly in indicators mea- in 2011, export growth is forecasted at 3.2 percent for 2013 suring the sophistication of value chains, as well as exter- and an annual average of 3.9 percent in 2014–17. This should nalization of supply chain and logistics activities, which are strengthen a fragile economic recovery from 2014 onwards. expected in advanced economies. This is based on the indi- cators proposed by the Global Competitiveness report un- Efficient logistics can play an important role in Greece’s re- covery in several ways: It can reduce the costs of importing and exporting; it can contribute to GDP growth as a service Figure 1.1: Exports will drive growth in the near sector; and it can reduce the fragmentation of the domestic future (percent change) economy, thus improving economies of scale and productiv- ity. Greece is geographically and economically well-located. 6 Piraeus Port, the deepest seaport on the Mediterranean, is 4 close to the Mediterranean maritime route and has already started developing as a significant trans-shipment center. 2 Both Piraeus and Thessaloniki have the potential to evolve 0 into gateway ports to South East Europe and Central Europe. –2 Provided that a long-distance, reliable railway connection –4 can be established, Greece can take advantage of the eco- –6 nomic growth in Eastern Europe and the regional produc- –8 tion networks established between Eastern and Western Eu- –10 rope. Becoming a regional gateway will require competitive –12 logistics along the whole supply chain, in addition to efficient –14 ports and railway connections. 2012 2013 2014 2015 2016 2017 2018 2019 2020 Real GDP Total domestic demand Better logistics will also reduce the extent of fragmenta- Exports Imports tion of Greece’s supply chain. A fragmented supply chain makes it particularly difficult for smaller businesses to en- Source: IMF 2013. 2 | Greek Logistics der its Pillar XI “Business Sophistication” (Figure 1.2). It also increase by 21 percent (Figure 1.4). Those numbers would ranks at the lower end, from the same source, in quality of not be attained by the measures proposed here alone, and border administration and transport infrastructure among implies a convergence on the long term. However, they give countries in Europe (Figure 1.3). an indication of the significance of the gap with the best EU performers. Reducing supply-chain barriers lowers costs and prices, both to consumers and to firms that import produc- Figure 1.2: Greece ranks poorly on clustering and tion inputs. Workers benefit as well from better supply-chain value chain efficiency, as the boost to GDP is likely to stimulate employ- (rank among 144 countries) ment growth. In the long run, improved trade facilitation promotes a shift in resources to more productive industries Willingness to delegate authority and firms, thereby increasing productivity and wages (World Extent of marketing Bank-WEF report January 2013). Product process sophistication Control of internal distribution Value chain breadth Nature of competitive advantage Figure 1.4: Trade and GDP can increase drastically State of cluster development with improvements in trade facilitation Local supplier quality Local supplier quantity 50 0 20 40 60 80 100 120 140 40 Source: Global Competitiveness Report 2012–2013. 30 Percent Figure 1.3: Greece ranks low in border 20 administration and transport infrastructure 10 Average: border administration; Availability/ 0 Current scenario Modest scenario Ambitious scenario 7 quality of transport infrastructure, 1-7 (best) 6 Exports Imports GDP 5 Note: Potential growth in GDP and trade if border administration and transport infrastructure in Greece moves to Belgium level (modest scenario) or Denmark 4 level (ambitious scenario). 3 Source: Courtesy of Marinos Tsigas, USITC. 2 1 Can Greece’s logistics reach such levels? There are challenges, 0 especially under the current economic conditions, in which Romania Bulgaria Poland Hungary Greece Slovak Republic Lithuania Latvia Italy Czech Republic Cyprus Slovenia Estonia Portugal Belgium Spain Ireland Austria Luxembourg Germany Finland France United Kingdom Sweden Netherlands Denmark structural rigidities and economic austerity place a drag on swift change. However, there are also opportunities for re- form that can build on existing successes. Many sources of inefficiency can be traced back to regula- Source: Global Competitiveness Report 2012–2013. tion. Greece is one of the most highly regulated countries in Europe. The same constraints that hold back the overall busi- ness environment, also affect logistics (Box 1). It will take a In theory, based on those indicators, improving supply-chain efficiency by bringing border administration and transport infrastructure to the level of Denmark (the highest score 1 Estimations by Marinos Tsigas, based on the GTAP model used in the WEF competitiveness report. Marinos Tsigas is affiliated with the in Europe for the average of these two indicators) could in- USITC; his analysis is not meant to represent the views of the USITC or crease Greece’s exports by 46 percent.1 GDP, in turn, could any of its commissioners. Logistics in Greece: Importance to the Economic Recovery, Opportunities and Challenges | 3 Box 1: Voices of the Private Sector • “Greece is the country of logistics, but the logistics culture does not exist.” • “There is no way you can comply with the law.” • “Enforcers checks are more frequent on firms that try to comply with the law, rather than focusing on firms operating in the large grey area.” • “We told the workers (in Thessaloniki port) that if they continue the strike and we lose shipping lines they won’t come back; it’s gone forever.” • “We need to use the train more, we need them (the rail company) to do business and they need us to survive; if we don’t make it we both die.” • “I call the train station to ask why customs has stopped my shipment; they say there is no one around to answer the question, call back tomorrow. How can I do business like this?” Source: World Bank team interviews to private sector stakeholders, January 2013. major reform effort by the Greek government to improve its means that most shipping activity is detached from domestic logistics sectors to a measure of quality and efficiency suffi- logistics markets or operations involving transit or merchan- cient to successfully compete regionally. dise trade in Greece. However, with reforms, there is poten- tial to attract these offshore companies to Greece. This can Greece is a superpower in shipping. Greek ship owners provide a boost to the sector, not only in shipping, but also control the world’s largest merchant fleet—measured at 225 along the whole supply chain. This would make it possible million deadweight tonnage (DWT)2 or 16 percent of world for Greece to achieve its vision of becoming a regional hub. total in 2012 (UNCTAD 2012). Most Greek ships are used Greek prominence in shipping is already visible in services in spot and time charter markets—typically for shipping dry trade data (Figure 1.5). Its export revenues from sea/ocean and liquid bulk goods between third countries (not involving Greece as an origin or a destination). Most of the Greek ship- ping business is managed through offshore companies. This 2 DWT is a measure of the weight that a vessel can carry safely. Figure 1.5: Sea transport is doing well in Greece 20 7 6 15 5 Share of GDP US$ billion 4 10 3 2 5 1 0 0 Export Import Export Import Sea transport Tourism Source: UN and World Bank. 4 | Greek Logistics transport were larger than revenue from tourism, reaching discontinuity in Greek supply chains has isolated Greece US$13 billion (about 6.5 percent of GDP) in 2010.3 from mainstream European practices and has led to idio- syncrasies that resulted in the relatively poor performance of key logistics services. The trucking industry has not been How well is Greece doing in logistics embedded in the rest of the EU network and did not have compared to others? much opportunity to develop. At the same time, it was rel- atively protected domestically. Because Greece did not have Economic growth and prosperity depend on how effectively land borders with the EU until Bulgaria’s membership to the a country’s supply chain operates and connects to its neigh- EU, Greece’s Customs Authority faced far less operational bors and to global markets. While geography plays a role, pressure to maintain EU standards than did countries in the policy matters for logistics performance, whether it is for EU heartland. infrastructure investment and operation, licensing, imple- mentation, enforcement, or trade facilitation at the border. As the Greek government puts in place reforms to address In short, policy matters for creating an overall conducive en- weaknesses in the performance of the supply chain, it could vironment for logistics services (Box 2). best take care to look at the connectivity of Greece relative to that of its neighbors. This allows policymakers to assess lo- Greece has been part of the European Union for a long time, gistics performance and improvement within Greece, but it but had no contiguous borders with any EU member until recently. Even today, Greece’s trade with the Western part of the EU—its largest trading partner—relies on shipping ser- 3 Statistics on services trade differ in some respects from merchandise trade statistics (e.g., the nationality of a vessel determines whether a vices or transit through non-EU countries, such as Serbia or certain service provision is regarded in national statistics as import, the Former Yugoslav Republic of Macedonia (FYROM). This export, or not at all). Box 2. Logistics: What Matters to Improve Supply Chains In 2007, the World Bank launched the now widely-accepted concept of logistics performance. It also introduced a framework, which has become a standard, to analyze national supply chains. Logistics performance captures the different dimensions of supply chain efficiency, including how supply chains connect globally and regionally, and how each is influenced by national endowments and policies. The three pillars of logistics performance include: • Availability and quality of trade-related infrastructure: ports, airports, roads, railroads. • Friendliness and transparency of trade procedures implemented by customs and other border control agencies. • Development and quality of logistics services such as trucking, warehousing, freight-forwarding, shipping and customs clearing, and value-added logistics services (third and fourth party logistics). Thus, logistics performance and the ability of countries to connect to international markets depend upon a range of policy interventions that can be implemented at the national or, increasingly, at the regional level. Priority areas for logistics performance improvement in most countries include: • Regional integration and development of trade corridors: border crossings and transit regimes; • Customs reform and trade facilitation; • Border management extending beyond customs; • Port reform; • Regulations and development of logistics services (such as trucking, third party logistics, freight forwarding, and warehousing); • Development of performance metrics; and • Building public-private coalitions for reforms. Logistics in Greece: Importance to the Economic Recovery, Opportunities and Challenges | 5 Figure 1.6: Bilateral trade costs for Greece and comparator countries (ad valorem equivalent) Vis-à-vis Western EU members Vis-à-vis large non-EU countries 120 250 103 100 100 200 86 86 83 82 80 82 80 78 69 70 150 67 60 100 40 50 20 0 0 GRC BGR ROM TUR GRC BGR ROM TUR DEU FRA ITA DEU FRA ITA USA CHN BRA JPN Source: Trade Costs Database, World Bank (data for Greece is 2008). also allows them to compare Greece’s performance to major though Greece is much closer to Italy and more easily con- competitors and peers. nected to it. With distant markets, Turkey does unambigu- ously better than Greece, which has the same broad cost-pat- Trade costs terns as Bulgaria and Romania, despite the fact that Greece is much better located than the Black Sea countries in terms Differences in size and endowments of national economies of shipping connections (Figure 1.6, right panel). Compared are not the only explanations for differences in the volume to the older members of the EU, Greece has double the trade of trade. Distance, supply-side constraints (such as poor lo- costs that Germany, Italy, and France have, regardless of gistics), and inefficiencies (such as those created by tariff and whether the destination is the USA, Japan, China, or Brazil. non-tariff barriers) also play a large role in determining the cost of trade between two countries. Calculations of bilateral Logistics performance trade costs capture the price-equivalent of unrealized poten- tial trade. That is, they calculate the reduction of internation- The nation’s relatively high trade costs are associated with al trade, as compared with the potential implied by domestic inefficiencies in the supply chains connecting Greece inter- production in the origin country and consumption in the destination markets.4 Higher bilateral trade costs result in smaller bilateral trade flows. 4 The recently published World Bank-UNESCAP dataset (Arvis et al., “Trade Costs in the Developing World,” Policy Research Paper Greece has higher trade costs than other countries in the WPS6309, The World Bank 2013) proposes comprehensive measures of trade costs for 178 countries over the 1995-2010 period using region (Figure 1.6, left panel). Trading with EU markets is the inverse gravity methodology described in Novy (2013). The more costly for Greece than for Turkey, though Turkey is far- trade costs are ad valorem equivalent computed from trade and ther away from the EU than Greece and economically less production data. There are two main sources of trade costs: (i) exogenous, such as geographical distance, common features integrated into the EU. Over the same distances, Greece does between trading partners such as language, common history, not perform much better than Romania and Bulgaria, which sharing a common border, or participation in the same economic are countries in transition, less wealthy, and only recently community; and (ii) endogenous, such as logistics performance in cost, delay, and reliability, and trade facilitation bottlenecks resulting joined the EU. Greece, Romania, Bulgaria, and Turkey have from border control, and transit systems with third countries, about the same level of bilateral trade costs vis-à-vis Italy, international connectivity, and tariffs and non-tariff measures). 6 | Greek Logistics Figure 1.7: Greece ranks low in logistics compared Figure 1.8: …And performs below countries with to its neighbors… (LPI ranking, 2012) similar per capita income Singapore 1 4.5 Hong Kong 2 Finland 3 Singapore Germany 4 Netherlands 5 4 Germany United States 8 South Africa Spain Canada LPI Score France 12 Italy China Turkey Spain 20 3.5 Portugal Korea 21 Poland South Africa 23 Thailand Bulgaria Croatia Italy 24 India Brazil China 27 3 Morocco Romania Portugal Ukraine Greece 28 Turkey Georgia Kazakhstan 29 Poland 30 Russian Federation 2.5 Azerbaijan Cyprus 35 Moldova Bulgaria 36 Saudi Arabia 37 10,000 50,000 Thailand 38 GNI per capita 2011 $ Hungary 40 Tunisia 41 Croatia 42 Source: LPI 2012. Czech Republic 44 Brazil 45 India 46 Romania 50 Morocco 51 Greece does not compare well with its neighbors or its Slovakia 52 Egypt 56 competitors in logistics performance. Greece tends to Ukraine 69 perform less well than Turkey, Romania, Bulgaria, or even Greece 71 Israel countries from the Southern rim of the Mediterranean 72 Serbia 77 (Figure 1.7). The comparison is even less favorable when Albania 78 the LPI is adjusted for the level of development as measured Georgia 81 Syria 98 by GNI per capita. Greece performs relatively less well than Russia 99 countries with similar per-capita income (Figure 1.8). In Lebanon 103 FYROM 108 fact, there is a substantial gap in logistics performance be- 0 20 40 60 80 100 120 tween Greece and other EU countries. This gap is in part Country rankings due to the fact that Greece’s supply-chain-related reforms and improvements did not follow the pace of economic Source: LPI 2012. growth in previous decades. nationally. To obtain an assessment of how efficient and com- Greece is on par with Eastern European countries across petitive each nation’s logistics network is, the performance of various components of the LPI, although it ranks better in international supply chains is measured using the Logistics infrastructure. It underachieves when compare to Western Performance Index (LPI). It is based on the assessment of European countries and Turkey in every component of lo- logistics professionals located in the country’s major trading gistics, particularly border control and quality of logistics partners, and is a weighted average of six components that are services (logistics competence) (Figure 1.9). Since 2007, critical for logistics performance: efficiency of the customs logistics performance has declined, including customs, (border) clearance process; quality of trade and transport-re- timeliness, and in logistics services competence (Figure lated infrastructure; competence and quality of logistics 10). Worsening performance can partly be explained by the services; ease of arranging competitively priced internation- global crisis and the economic crisis in Greece, and partly, al shipments; ability to track and trace consignments; and as the indicator is relative to the fact the other countries timeliness and frequency with which shipments reach the have improved substantially, when improvement in Greece consignee within the scheduled or expected time (see Box 2). are more recent. Logistics in Greece: Importance to the Economic Recovery, Opportunities and Challenges | 7 Figure 1.9: Logistics performance is below Western Figure 1.10: …and has deteriorated since 2007 Europe in all its components in 2012… LPI Score LPI Score 5 4.5 Timeliness Customs Timeliness Customs 4 4 3.5 3 3 2.5 2 2 1.5 1 1 0 0.5 0 Tracking & Infrastructure Tracking & Infrastructure tracing tracing Logistics International Logistics International competence shipments competence shipments Spain Italy Turkey Greece Europe & C. Asia 2007 2010 2012 Source: LPI. Source: LPI. Maritime connectivity economic centers. Figure 1.15 indicates the logistics for the distribution of a single product (beverages) in Greece. It re- Greece fares much better in maritime connectivity than quires central and peripheral nodes of distribution involving in logistics performance and trade costs. According to the transportation services (via truck, rail and shipping), ware- Liner Shipping Connectivity Index (LSCI)—an assessment of housing, third party logistics, supply-chain management, how well a country is served by container shipping—Greece insurance, inventory management, and border controls. Per- ranks 25th in the world in maritime connectivity (Figures formance in each activity partly depends on performance in 1.11–1.12).5 Its LSCI indicates a significant improvement the upstream activities. from 2011 to 2012, reversing the negative trend since the be- ginning of the crisis. This improvement in maritime connec- Efficient global logistics providers operate in Greece, but tivity reflects the success of the reforms. These reforms have they are only partially integrated with the rest of the Greek led to the growth of trans-shipment activities in Piraeus and economy. Global players in logistics are present in Greece, a larger offering of shipping connections brought by the re- and include Kuhne & Nagel, DHL, Shenker, Geodis, Panalpi- cent development in the Piraeus Container Terminal (PCT) na, and Express. Along with few large Greek operators, they operated by COSCO. The potential is still large. Container operate efficient supply networks and provide their clients volumes in Piraeus are relatively small compared to the larg- with timely and cost-effective deliveries between Greece and est European ports, and rather modest, even compared to the the rest of Europe, into and from their logistics centers in the nearby eastern Mediterranean ports (Figure 1.13). Attica and Thessaloniki regions. However, this modern lo- Logistics practices and network in Greece 5 The LSCI (produced by UNCTAD) aggregates information such as volumes of containers for the economy relative to its size, number of shipping lines and maximum boat size serving the country. Countries The complexity of the supply chain is exacerbated by with high activity or hosting shipping hubs have a high score. The reference number 100 corresponds to the highest score country Greece’s fragmented geography. In general, logistics ser- (China) in 2004. The LSCI includes trans-shipment activities, and vices involve an intricate set of interdependent activities, hence is higher for countries hosting regional hubs. The LSCI does as well as many private and public actors (Figure 1.14). In not include other maritime services such as ferries or Ro-Ro, which play an important role in connecting Greece to its main markets. Greece, this complexity is exacerbated by geography: the Countries that rely heavily on ferry and Ro-Ro shipping include country is made up of thousands of islands with few, large Albania, Finland, Ireland, and Norway, which score low in the LSCI. 8 | Greek Logistics Figure 1.11: Greece ranks 25th in the world on container shipping connectivity China 1 156 Hong Kong 2 117 Singapore 3 113 United States 6 92 Germany 7 91 Netherlands 8 89 United Kingdom 9 84 Belgium 10 79 Spain 11 74 France 12 70 Taiwan 13 67 Italy 14 66 Egypt 18 57 Morocco 19 55 Turkey 20 25 53 Greece 46 Malta 26 45 Russia 38 37 44 Israel 31 Romania 52 23 69 Cyprus 16 0 20 40 60 80 100 120 140 160 Rank 2012 Score 2012 Source: UNCTAD. Below the international logistics companies, the current Figure 1.12: Greece shows a large improvement organization of nationwide logistics to serve the final cus- in container shipping connectivity in tomer is sub-optimal and fragmented. There are several 2012 (base=100 in 2004) layers (and quality levels) of distribution services in Greece. 180 Distribution to the provinces and the islands tends to be of lower quality than international distribution. International 160 and large Greek companies typically contract an interme- 140 diate layer of medium-size domestic third-party logistics providers (3PLs) to ensure distribution to warehouses in the 120 provinces. Local distribution within provinces and ware- 100 housing is carried out by small companies, which operate 80 small trucks on “own account” and “own logistics” facilities. These are businesses that are not clearly differentiated; they 60 do retail as well as logistics for others. Small-scale logistics is 40 also dominant for distribution in the islands. The quality of 20 these services is far from the state-of-the-art services found in the EU. For example, no attention is given to dangerous 0 goods in ferry transport. 2004 2005 2006 2007 2008 2009 2010 2011 2012 China Greece The use of outsourced logistics services is comparatively low in Greece. The level of outsourced logistics in Greece Source: UNCTAD. stands at 23 percent compared to 49 percent in Europe, ac- cording to SEV. This is partly due to regulatory constraints that hinder the development of modern commercial trans- port and logistics services, as well as other factors. These fac- gistics industry does not have strong linkages with the rest of tors include the preference of many (typically family-owned the Greek economy; the rest of the logistics industry operates and family-run) Greek companies for carrying out their at a much lower quality and reliability level than is required warehousing, and transport and logistics services in-house. by these international and large firms. Typically, outsourced logistics account for 80–90 percent of Logistics in Greece: Importance to the Economic Recovery, Opportunities and Challenges | 9 Figure 1.13: Big potential ahead: container Promoting consolidation and increasing outsourcing of volumes of Piraeus still small logistics will improve the efficiency of the supply chain. compared to Greece’s neighbors The use of outsourced logistics services is not a goal in its (largest European container ports in own right, but its prevalence in Western European countries 2011 by TEU volume) demonstrates that it is an effective way of managing supply chains. It provides a high level of service and reliability while keeping costs relatively low. In Greece, increasing the use of outsourced logistics services is not going to be easy, as many Greek firms have already built their operational practices and invested in facilities and equipment around the in-house model. Such an operational model often has lower produc- tivity levels than a specialized third party logistics provider can offer. It is due to the fact that equipment and facilities can hardly be used at full capacity, as a specialized provider can do. This is because a specialized provider would handle several types of merchandise with different storage cycles at once. However, as currently there is excess supply of logistics services capacity, the pressure to increase the efficiency and competitiveness of operations among logistics users seems to be forcing part of them to look for outsourced, or 3PL, services. This also means that the current cost level for such services is low by any measure, by international comparison. The average productivity of Greek truckers is notably low, but Source: Eurostat, Colliers 2012. it is unlikely that it will deteriorate further. Losses in market share will take place if the trucking sector does not reform, but this is not an immediate risk. Finally, the use of rail trans- all transport expenditures. In Greece, it is about 20 percent. port can remain minimal—carrying a scant two percent of Similarly, the share of outsourced warehousing and invento- the total Greek exports (Figure 1.17)—without much change ry management expenditures is typically around 50 percent to the export picture in Greece. However, not advancing on within manufacturing and trading, whereas in Greece it is the reforms and capitalizing on the available opportunities below 20 percent. will come at a large opportunity cost. Figure 1.14: Logistics services in a typical supply chain Domestic transport Export gateway International Import gateway Producer Consolidate, load, Intermodal transfer, transport Intermodal transfer, deliver, unload storage, clearance Load, transport, unload storage, clearance Domestic transport Distribution centre Domestic transport Domestic transport Deconsolidation, storage, Distributor/ Consolidate, load, Consolidate, load, Consolidate, load, deliver, unload inventory, management, deliver, unload Wholesaler deliver, unload packaging, labeling Retailer 10 | Greek Logistics Figure 1.15: Distribution network of a single Figure 1.16: Greek logistics services consumer product in Greece: not an (in billion Euros) easy matter 2500 2000 1500 1000 500 0 2006 2007 2008 2009 2010 Note: This image depicts the distribution network of a beverage company Forwarding Transport Handling Warehousing in Greece. The squares are the major distribution centers and the lines are the distribution channels. The black arrows show the international shipping Source: SEV. connections of the largest distribution centers. Greece has a choice: it can maintain this status quo, or it Figure 1.17: Rail: the big absent (volume and can leverage the good performance of shipping and the value of exports using various modern logistics operators in the country to become a modes of transport) regional gateway. In shipping, in particular, not only can Greece establish itself as a trans-shipment hub and gateway over the medium term, but it can also generate important spillovers in terms of logistics competence and services avail- Volume able in the country. These synergies are achievable. They ma- terialized in nearby countries: in the 2000s, the development of Tangier Med in Morocco (about three times the size of Piraeus) helped attract international logistics providers and investments in logistics zones for the European and African Value Markets. 0 20 40 60 80 100 120 Percent of total Shipping Railway Road Air Other Source: SEV. CHAPTER 2: A Detailed Review of the Greek Logistics Setting T Institutional challenges his section looks in detail at various sectors of the Greek logistics environment. It focuses largely on the regulatory environment, with an eye toward le- Both the design of logistics-related policies and their im- gal loopholes, flaws in market structure, and distortions. The plementation pose challenges in Greece. Over the years, the goal of this examination is to identify changes that could Greek public policy framework has remained rather static make the market more predictable and cost-competitive with respect to creating an efficient regulatory environment for operators, while also cheaper for consumers. Given that for logistics, in contrast to practices from EU member states the objective of the report is to identify priority reforms to with the best logistics. Greece has differed in at least two improve significantly Greece’s business environment in the ways. First, the country has seen a proliferation of ad hoc short to medium term, the section discusses some topics regulations applied to logistics activities on top or in place (i.e., horizontal hurdles, road transport, logistic services, and of the EU-Acquis (i.e. accumulated legislation, legal acts, issues of trade facilitation) more in detail. Regulatory reform and court decisions which constitute the body of European in these areas appears to be fairly viable and able to lead to Union law) with much duplication, overlap of administra- efficiency gains by boosting the competitiveness of existing tive responsibilities, and unnecessary constraints. Second, businesses while also encouraging competition and market Greece has exhibited relatively weak implementation and contestability. Other areas (e.g., ferry shipping, ports, rail- enforcement capacity in several areas. This situation gen- roads) are discussed in a more concise manner. Reforms in erates distortions, including incentives that encourage in- these areas can lead to “big wins,” but they may be politically efficient practices, weak compliance, or non-compliance difficult or require significant investment. with regulations and missing or underdeveloped markets for some logistics activities. Ultimately, these distortions Since the economic downturn means that large, expensive slow the transition of the sector to modern, world-class projects are not a priority, the focus is on areas that can be standards. fixed with little up-front investment. One essential compo- nent of modernizing logistics is structuring the market so that businesses choose to outsource services (transportation, A complex regulatory framework logistics, etc.) and focus on their core functions. This section first gives an overview of some of the institutional hurdles to As in many countries, responsibility for regulating logis- improving logistics in Greece. Second, it examines a range of tics-related activities does not fall to a single ministry. More- transport sectors, focusing on obstacles to efficiency that re- over, some areas are regulated at the sub-national level. The quire little infrastructure or other large investments. Weak- nature of supply chains means that improving logistics per- nesses include elements of the regulatory framework and formance cuts across many policy areas. Take, for instance, enforcement of regulations. Third, it looks at logistics ser- the case of a 3PL, whose job it is to integrate most activities vices—in particular, warehousing and third-party logistics along the supply chain. Such companies may have to deal providers—and some of the issues that are related to product with the following regulations, some of which are not spe- distribution in Greece. Finally, it examines logistics concerns cific to logistics: that are specific to an international context, focusing on ▶▶ Investment financing, including regulations for conces- trade facilitation hurdles and issues related to supply-chain sions and private-public partnerships (PPPs) if the op- efficiency. In each case, the goal of the analysis is to make the eration is on a public land, EU subsidies (such as co-fi- business environment more predictable and competitive, not nancing of specific sectors and activities through EU only for transportation and logistics providers, but for the structural funds), national grants, and access to private businesses that use those services. funds. 12 | Greek Logistics ▶▶ License to engage in an economic activity; establishing a a legitimate purpose to safeguard an environmental, social firm (e.g., trucking, warehousing). or fiscal concern. A 3PL in any country will have to com- ▶▶ Truck registry regulation (new and second-hand vehi- ply with a number of national-level regulations, often taken cles) and truck license regulation. in application of an EU directive. The type of regulations is consistent across the EU. However it is less easy of complying ▶▶ Land use and zoning regulation for (logistics) facilities, with them. Their implementation by public agencies on the including spatial planning, forest, and archeological ground makes the process of permit and license more com- permits. plex with more administrative steps and delays. ▶▶ Warehousing regulation, including establishment, oper- ation, construction, environmental, safety, sanitary, and The challenges of “doing business” across the country are fire regulation. mirrored in the logistics sector. These challenges include ▶▶ Import and export regulations, including fiscal regula- over-regulation, excessive cost of—and long delays in— tion, customs broker regulation; customs code for spe- opening a business; difficulty of hiring workers and ending cial regimes; commercial code for transport transaction their employment, etc. Significant reforms to the labor laws (CMR). in the past three years have introduced a lower minimum wage, lower compensation, and a shorter notification period Coordinated and coherent regulations are required for the for ending employment while some areas of legislation, such efficient functioning of many aspects of logistics: transport as the regulations for industrial activities, have been stream- (road, rail, and water), storing of merchandise, managing lined and modernized (European Commission, 2013). How- goods at the border, the value-added services associated to ever, little awareness about the new procedures and lack of the activities above, and the development of durable im- adequate information on how to interpret them meant that port-export relationships. In Greece, the logistics regulatory implementation remains weak. framework is a maze, creating a sub-optimal logistics sector characterized by uncertainty, obstacles, poor compliance, Fragmented implementation and perverse incentives, and a reduced ability to attract foreign enforcement of logistics policies investors expecting similar rules and practices to those found in other EU countries. Examples of complex regula- Coordination between enforcement agencies is also a tions abound (see Box 3). problem and largely explains weak enforcement of regu- lations. In many areas of logistics, there is no formal link The complexity of the regulatory problem is exacerbated by between the technical agencies in Athens and the enforcing the nature of the logistics sector, since logistics services along agencies on the ground (except for customs, fiscal agencies the supply chain interact and intersect in many ways. There and police). It is often the case that the central agency pre- are logistics centers, warehousing, road haulage/trucking, pares and monitors policies and regulations, but enforce- domestic or islands shipping, forwarding, handling, 3PLs, ment needs to be carried out by the local agency. Yet, the couriers, and other advanced logistics services. Such services connection between the central and local agencies is not can be provided by individual firms that focus on one service always well-defined or well-established. In some areas, the only or by firms that combine several services (large logistics local agency is not accountable and does not report back to companies integrate transport and warehousing, work di- the agency in Athens. For example: rectly with the customs administration, invest in and devel- op key infrastructure, such as ports, to provide high quality ▶▶ The regional and vice-regional governors (who are and global logistic services from the point of production to elected) often have substantial discretion over the in- the point of consumption). Logistics activities, such as ware- terpretation and implementation of central government housing, have a large footprint on land and environment, policies. which means that zoning, environmental, and safety regu- ▶▶ The policy makers do not have data and cannot properly lations apply. assess their legislative proposals or improve implemen- tation. They, therefore, tend to rely on data from private The number of regulations in itself is not the problem. It consultants or third parties, which might be biased or in- is the lack of coherence and consistency among the regu- accurate. This creates quality problems for legislative ac- lations and their inconsistent implementation that create tion and for the output produced by the agency in charge inefficiencies and distortions. Regulations typically have of preparing the parameters for implementation. A Detailed Review of the Greek Logistics Setting | 13 Box 3: Understanding the logistics regulatory maze: Examples of complexity • There are three distinct regulatory frameworks under which a warehouse can be established. The industrial legislation (Law3982/2011), the legislation for εμπορευματικός σταθμός that can be loosely translated as stations for trucks, freight car parks, cargo terminals (Presidential Decree 79/2004) and the municipal regulations, which govern the establishment and operation of warehouses attached to a retail activity and for own use. Moreover, while most licensing is the responsibility of regional and municipal authorities, this is not the case for facilities located in business parks or freight villages, which are regulated directly by the ministry or for facilities with high environmental impact. Having different frameworks is not a problem per se, as it reflects the fact that warehouses have different purposes (storage near a production or transformation site, storage for redistribution which needs frequent loading and unloading of trucks, storage of merchandise feeding large distribution chains). The problem is due to the fact that in some cases it remains ambiguous under which law an operator should get licensed. Moreover, the steps to get licensed under each law are different and so are the regulations and conditions of operation. This generates uncertainty and leaves scope for interpretation on specific issues. As a consequence licensing procedures can be lengthy and require several interactions between the operators and the public authorities. According to the private sector, to establish a warehouse, there are typically 15–20 different permits that need to be acquired from several authorities, including the fire department, the forestry authority and the archeological office. The total process time is typically 15–18 months or more. • Lack of a clear framework, based on modern concepts of risk-based assessment, obliges authorities to carry out 100 percent checks for compliance on a number of requirements. This leads to long waiting times to get licensed. The problem has grown more severe since the crisis, as many public sector offices are severely understaffed. • There are separate procedures for establishing logistics facilities, obtaining the necessary building permits, and for operating the facilities, with some of the steps duplicated in the different procedures. • The existing legislation on the use of land is complex and sometimes is contradictory. With nine different zoning categories, it leaves scope for ambiguities on where logistics activities (mostly warehouses and logistic centers) can be established. This has led to a situation where warehousing facilities exist without a proper and coherent legal status, have been established in areas with different types of destination (commercial, industrial, etc.), sometimes in unregulated areas lacking adequate infrastructure and subject to very low construction coefficients (10 percent of total land), and require different permits. Retroactive changes in land use appear not to be possible either. • The specific requirements written in a law for warehousing facilities of certain size, the detailed legislation requirements on logistic centers and their connections to ports, airports, or rail terminals to establish intermodality functions (Law 3333/2005), and some of the legislation regulating the trucking activities appear to complicate rather than help new investment in this area. Law 3333/05, its amendment 3773/08 and the related Circular dated October 2010 prepared by the then Ministry of Transport exist, but have not been used a single time. • Some regulations, such as the one for 15,000 m3 (or 1,500 m2) maximum size (area) of compartments within a warehouse, are outdated in view of modern equipment, or redundant, and substantially hamper the logistics efficiency and productivity within warehouses. • A firm providing warehousing or Third Party Logistics (3PL) services cannot own and operate trucks unless it establishes a transport company. While Law 3887/2010 allows 3PL to receive a license and therefore own and operate public-use trucks, as long as they comply with the relevant legal requirements, such division of activities hampers the efficiency and effectiveness of logistics operations. Furthermore, such restrictions are seldom found elsewhere in the EU. • Until October 2013, for each individual road transport shipment (and even for transactions between subsidiaries within the same warehouse), an official paper-based delivery note needed to be issued by the tax authorities, creating a lot of possibly unnecessary paperwork. This requirement will change on November 1, 2013, as electronic payment of customs duties, taxes and other charges will become possible upon the entry into operation of ICISnet, the new integrated customs information system. • While the recently-passed law on customs brokers liberalized access to the profession breaking the monopoly enjoyed earlier by customs brokers and allowing access to anybody meeting clear professional and financial criteria, logistics integrators and large traders still lament difficulties in hiring a customs broker as their employee, a common practice in other EU countries. 14 | Greek Logistics ▶▶ Municipalities may duplicate national or regional proce- “one-truck, one-owner” model. The trucking market was dures. Some municipalities issue truckers’ licenses and closed until recently, leading to deep-seated inefficiencies the operator has to follow two identical and parallel pro- and high rents to licensed truckers. The opening up of the cedures to obtain the license—one with the local authori- sector in 2010 will take time to have a positive impact, as ties and one with the Department of Transport. existing operators will benefit from protective licensing ▶▶ The process for obtaining a license for warehousing is regulations for another decade. Unless the trucking sector subject to duplications, in particular some of the steps completes its transition towards consolidation and high- necessary to obtain pre-licensing certificates for archeo- er quality services, in addition to ensuring a level-playing logical, forestry, and environmental compliance are then field through better enforcement of trucking laws, its ineffi- required again for obtaining the permits to license the ciencies will ultimately translate into further losses in mar- warehousing establishment. Similarly, the process for ob- ket shares for Greek truckers, to the advantage of foreign taining a building permit by the municipality is similar competitors. They will also continue to drag on the rest of to the process to obtain an establishment license by the the logistics supply chain and will hamper efforts to make regional authorities (this latter is a pre-condition to re- Greece a logistics hub. quiring and obtaining the building permit). The trucking industry structure Effective enforcement of road transport regulations is also limited due to problems of fragmentation. Although no The Greek trucking sector is of low quality, dominated systematic statistics exists, an estimated three-fourths of all by “own-account” transport operators, and fragmented. roadside checks of heavy goods vehicles (HGV) in Greece Own-account operators, who primarily use their vehicles to are conducted by the Police under the Ministry of Interior. transport their own goods, account for over 90 percent of These appear to be conducted independently by each Po- the trucking industry in all parts of the country (Figure 2.1). lice District and little nation-wide coordination or training These operators typically fall under less stringent regulations seems to take place within the police force on this issue. The remaining one-fourth of roadside checks of HGV’s are con- ducted by teams comprising staff of more than one agency, Figure 2.1: An industry dominated by own- which responds to the regional government. Finally, addi- account trucks across the country tional checks are under the responsibility of agencies located (total number of trucks/percentage in the ports and at the borders (such as the Customs author- commercial trucks/percentage own- ities under the Ministry of Finance or the Port Police, which account trucks) is under the Ministry of Shipping). The lack of a comprehen- sive collaborative agenda between agencies limits the ability of enforcement. The transport industries Road transport Road transport is the primary mode used for freight do- mestically; it is also critical for international trade with the rest of the continent. Greece is excessively reliant on road transport of goods, which accounts for 98 percent of all land transport by volume and value, compared with 72 per- cent for the EU. The Greek trucking sector is of low quality and is dominated by operators who primarily use their ve- Note: According to professional associations, there are 33,000 trucking companies “for hire” (28,000 of which are one-man-one-truck) and 1,270,000 “own account” hicles to transport their own goods. The commercial sec- trucking companies. According to the Ministry of Infrastructure, Transport and Networks there are 30,752 trucking companies “for hire” and 1,431,618 “own tor is small and fragmented—few companies have more account” trucks. than 20 trucks, while two-thirds of the operators follow the Source: Hellenic Statistical Authority (2010). A Detailed Review of the Greek Logistics Setting | 15 than professional transport companies. Moreover, over 80 the operators follow the “one-truck, one-owner” model. The percent of their fleet is more than 15 years old (Figure 2.2). volume of new-vehicle registrations dropped between 2010 The commercial sector is small and fragmented. There are and 2011, and continues to be well below that in Greece’s few companies with more than 20 trucks, while two-thirds of neighbors. Figure 2.2: The trucking sector in Greece and its neighboring countries Private trucks dominate but are small in size… and old share of trucks in total share of trucks by age of vehicle eet 100 100 90 99 80 70 98 Percent 60 97 Percent 50 40 96 30 95 20 94 10 0 93 Own account trucks Trucks “for hire” 0–5 years 5–15 years 15–30 years 30+ years (“private use”): (“public use”, total 1.4 million commercial): Trucks “for hire” (“public use”, commercial) total 31,000 Own account trucks (“private use”) Category N3 max. mass more than 12 tons Category N2 max. mass 3.5 to 12 tons Category N1 max. mass less than 3.5 tons Greece is lagging behind its neighbors in the number of light and commercial vehicles… …and the gap worsened after the crisis new vehicle registrations, 2011 new vehicle registrations 14,000 18,000 12,000 16,000 14,000 10,000 12,000 8,000 10,000 6,000 8,000 6,000 4,000 4,000 2,000 2,000 0 0 Light Commercial Heavy Greece Romania Hungary commercial vehicles commercial 2010 2011 vehicles <3.5 tons >3.5 tons & vehicles < 16 tons >16 tons Greece Romania Hungary Note: N1, N2 and N3 refer to the EU general classification of vehicles used for the carriage of goods. Source: Ministry of Infrastructure, Transport and Neworks; EU Transport (2012). 16 | Greek Logistics There are several possible reasons for the abundance of and costs 600 Euros. This, combined with a cultural pref- own-account operators: erence for self-employment creates no opportunity for ▶▶ An over-regulation of trucking companies, requiring for economies of scale. instance that even the small pick-ups be licensed. This ex- ▶▶ In Greece, for each tractor unit only three trailer units planation is based on the big number of N1 trucks, repre- can be registered. In practice, this limits unaccompanied senting 83 percent of the total “private use” trucks; unit transport and the use of intermodal transport. ▶▶ Legislation that is more relaxed with “own account” li- censing: the person requiring a license must prove that he Unfair competition adds to the trucker’s lack of needs a truck for his own business by showing a certain competitiveness: turnover. The license is given for the carriage of specific ▶▶ Informal competition from “own account” truckers that goods; illegally transport commercially, due to lack of effective ▶▶ Financial and other advantages for own-account opera- roadside enforcement; and tors, such as lower effective taxes on profit and stream- ▶▶ Payment of transport services with post-dated checks lined contracts; and became the rule, creating significant financial prob- ▶▶ Stricter enforcement with public use, commercial li- lems with a snowball effect: a trucker would provide the censed operators compared to “own-accounts.” post-dated checks to his bank as collateral for a loan. The bank would approve the loan with an interest rate 50 per- The cost of operating a truck is high, partly due to ineffi- cent higher than normal and if the bank could not cash ciencies in the trucking industry and partly due to high the check when it was due it would file a case against the vehicle-operating costs. These make Greek road transport trucker. operators expensive and unable to compete with Turkish, Moldovan, Bulgarian, or Romanian competitors. They are The costs per kilometer of a Greek trucker operating inter- subject to the following fees/charges: nationally are almost the double of those of a French trucker (1 Euro/km against 0.52 Euros/km). According to interviews ▶▶ Twenty-six to thirty-six percent tax on revenue and conducted in early 2013, the price/km often does not cover twenty-three percent VAT, compared to ten percent tax the operating costs, which indicates that Greek haulers have on revenue and twenty percent VAT in Bulgaria, and a serious difficulties to maintain their profitability especially tax-free regime in Cyprus. in international transport. Moreover, there is non-level play- ▶▶ One of the most expensive fuel prices in the EU: the ex- ing field with Turkish trucking companies and from Greek cise only is 670 Euros (per 1000 liters), compared to 363 companies established in other EU countries with a more Euros (per1000 liters) in Bulgaria. favorable business environment (Bulgaria), as well as from ▶▶ Expensive insurance, with levels differentiated depend- nationals of other EU countries. ing on the region where the company operates and on the type of transport. For example, for the same type of truck Barriers to the development of the road transport pro- (40 tons, tractor and trailer) the trucker going on interna- fession tional routes pays 6,100 Euros per year, while the trucker carrying in Greece pays 1,800 Euros per year. Insurance A closed profession for more than three decades remains rates can be 20 percent more expensive for Athens than marred by inefficiencies. The privilege to carry goods be- for provinces, and they can be 40 percent cheaper for longed historically to the State, which passed this on to “own account” than for “hired” trucks. truckers by selling them a limited number of licenses every ▶▶ Road user charge: 925 Euros per truck per year while in year. The license gave the right to carry goods internally and Bulgaria it is 75 Euros per year. internationally. In 1970 the Government decided that the 33,000 licenses on the market were enough to perform the ▶▶ Cost for a driver (insurance and social contribution, wage country’s commercial transport of goods and stopped issuing not included) is 630 Euros per month, while in Bulgaria it additional licenses. The commercial road transport became a is 300 Euros per truck per year. “closed profession.” As a consequence, the selling price of the ▶▶ Creating a transport company (SA or Ltd) takes between licenses rose continuously, and reached as much as 250,000 three and eight months and costs 4,000 Euros, compared Euros per truck in 2010. A license was seen as a long-term to Bulgaria where the same operation takes three hours investment and a secure source of income. At the same time, A Detailed Review of the Greek Logistics Setting | 17 this system protected the profession from stiff competition dustry. High levels of bureaucracy, steep security deposit re- that new entrants would present, which translated into lack quirements, lengthy procedures affect the secondary market of incentives to innovate. for trucks, the issuance of new permits, and the transfer of li- censes to new owners. In addition, the number of certificates The transport of goods “for own account” was not subject to required for selling a truck is relatively high. All required the same rules. As a consequence, there are more than 1.4 fees released by different authorities or even by independent million vehicles (smaller or bigger trucks) that are supposed bodies (see Box 4). While there is ample scope to cut bu- to carry only their own business products or raw materials. reaucracy and simplify procedures, the current regulations This leads to low capacity-utilization. It also means that there reduce the incentives for selling old trucks and transitioning are low economies of scale and unregulated use of vehicles. to trucks that comply with higher environmental standards. Finally, important barriers remain that hamper the de- The standards that applicants must meet to accede to the velopment of a competitive trucking sector in Greece. The profession—measures put in place as part of the recent barriers touch upon many dimensions of the trucking in- liberalization—effectively mean no change will take place  ase study - Number of certificates needed for selling a second-hand truck in Greece Box 4: C (as of May 2013) Certificate Required Issuing Agency • Certificate that road tax has been paid for last and TAX OFFICE current year. • Certificate that seller and buyer have settled all SOCIAL SECURITY OFFICE obligations against the responsible body insuring drivers and truckers. • Certificate that the vehicle in question has ABS INDEPENDENT MECHANICS WORKSHOP system despite construction date. • Certificate issued by local engineer that the vehicle INDEPENDENT ENGINEER is in accordance to the legal dimensions • Certificate from local weigh bridge regarding the LOCAL WEIGH BRIDGE tare weight of the vehicle. • Certificate from any local tachograph workshop INDEPENDENT TACHOGRAPH WORKSHOP that the tachograph is operating according to legislation. • Agreement arranged by a public notary regarding NOTARY the transfer of number plate from one owner to the other. • Certification from local transport ministry MINISTRY OF INFRASTRUCTURE, TRANSPORT AND department that the certificate of ownership is NETWORKS valid and an original. • Receipt that transfer taxes are settled. TAX OFFICE • Certificate from local technical control (MOT test) ANY TECHNICAL CONTROL STATION that the vehicle is technically suitable. 18 | Greek Logistics for some time. Recognizing that the industry structure was have facilitated a speedier transition to the new regulatory distorted, the Greek government in 2010 decided to liberal- system, but are currently not possible under Greece’s fiscal ize access to the profession. It decided to liberalize gradually. constraints. However, this process was slowed down, in agreement with the so-called “troika” of the European Central Bank, the Eu- Enforcement of regulations in the trucking sector ropean Commission and the International Monetary Fund. There were two main motivations for a gradual liberalization. Enhancing road transport enforcement practices in First, there was the willingness to ease the transition for own- Greece is a necessary pre-condition to improving the qual- ers of old licenses by allowing them more time to adjust (as it ity of logistics services in the country as it improves timeli- happened in France in the 1980s); and second, the intention ness, and reduces uncertainty and risks for the users of the to impose an entry selection criterion that would allow to logistics supply chains. Better transport enforcement also keep out of the sector the so-called “necessity entrepreneurs,” represents an important public good to the entire EU, given (e.g., players attracted to the sector because of lack of oppor- that Greece is a geographically important and sensitive entry tunities elsewhere). Accordingly, the measures included a point from third countries to the EU. transition period allowing companies to transfer licenses un- til 2022. New candidates (non-SA companies or individuals) While most Greek legislation on road transport enforce- were required to meet higher financial requirements than ment is compliant with the EU Aquis, provisions and reg- the levels foreseen by the EU-Acquis. For example, 18,000 ulations are scattered around a large number of laws, min- Euros would be needed for the first truck and 9,000 Euros isterial decrees and circulars (see Appendix 3, Table A3.2). for each subsequent truck. This is compared with 9,000 Eu- The current fragmentation of the regulatory setting creates a ros and 5,000 Euros as foreseen in the EU-Acquis and ap- sub-optimal economic environment characterized by uncer- plied in Greece only to SA companies. These amounts are to tainty, obstacles, poor compliance, perverse incentives, and a be deposited in the Deposits and Loans Fund and are only reduced ability to attract foreign investors and clients. These returned when the business ceases to operate and permits are deterred by the information costs of assessing how rules are returned to the Ministry. A bank guarantee of 5,000 Eu- and practices in Greece compare to those found elsewhere, ros per truck is also foreseen under the new regime. A case and in particular in other EU countries. The Greek author- in point is the following: Despite the introduction of new ities are well aware of this problem and indeed the Ministry trucking licensing requirements, some trucks have kept the of Infrastructure, Transport and Networks (MoIT) is lead- old licenses to avoid meeting the higher requirements of the ing an effort of drafting a new framework law to consolidate new licenses. and reorganize the legislation on transport enforcement in one comprehensive law, while also improving the problem- While the fragmentation of the industry into small truck atic areas. An important objective of this effort is to simplify operators may have been useful in providing more flexi- and make more transparent the current regulations defining bility in the past, it is no longer an industry structure that roadside control for freight while also eliminating coun- can support a modern logistics system. The title-transfer terproductive specificities in the major laws regulating this for public use trucks in circulation is a compromise between activity. an instant opening and the transition measures described above. As of today—2.5 years after the reforms—there are A main problem in enforcing road transport regulations almost no new entrants on the market, which may be ex- is the lack of collaboration between enforcement agencies. plained partly by the subdued economic situation of Greece Roadside enforcement is regulated by a variety of agencies and partly by the strict requirements for new entrants. Nev- and bodies: the regions, traffic police, port police, finan- ertheless, on a more positive note, recently there has been a cial police (SDOE), and customs authorities. All these have sizeable decrease in the value of licenses on the secondary policymaking and regulatory powers, but coordinate little market, which may catalyze consolidation of the trucking in- with each other. Each of them disseminates transport reg- dustry and its transformation into a modern fleet. ulations and advises on the interpretation and application of the law. They are affiliated with different ministries, their Additional measures, however, could have facilitated and competence is sometimes limited to certain geographical accelerated the transition to the new regime. Some of areas (e.g., port police to port areas and customs mostly to those applied in other EU countries—such as remuneration, customs premises), but in most cases it is overlapping (i.e., tax-incentives, funding for upgrading a truck fleet—would regions and traffic police both are competent over all public A Detailed Review of the Greek Logistics Setting | 19 roads and spaces used for public traffic), while SDOE can ▶▶ Gaps in the procedure for verifying infringements and intervene everywhere (see Appendix 3, Table A3.1 for de- collecting fines. tails). An old-fashioned management style, with hierarchical ▶▶ Inability to collect fines from foreign defaulters. working practices, mandates with small space to collaborate ▶▶ Lack of a system for certified training of enforcers. with other organizations, and lack of space for initiatives in all enforcement agencies hinder the possibility of creating ▶▶ Coordination problems between control authorities in synergies and collaboration between agencies. the regions and lack of a national control strategy. ▶▶ Need for a codification and simplification of transport Enforcement of transport laws is applied, as a rule, by regulations and definition of clearer guidelines for Com- teams composed of representatives of Traffic Police and petent Authorities’ enforcement units and staff. Regional Units. Though no systematic or reliable statistics exist, an estimated three-quarters of all roadside checks of Currently, the main problems of enforcement of the heavy goods vehicles (HGV) in Greece are conducted by trucking sectors seem to be systemic but it could be miti- the police authorities. The remaining quarter of the road- gated by a collaborative agenda across enforcing agencies: side checks of HGV’s are conducted by regional government A severe understaffing of the Road Freight Directorate; lack teams. Some checks are also made by authorities at ports, of financial resources to devote to training activities; coun- such as customs under the Ministry of Finance or Port Police, terproductive specificities in the major laws regulating the which is under the Ministry of Shipping. Little nation-wide sector; and disincentives for the teams composed of repre- coordination across agencies and almost no training for the sentatives of Traffic Police and Regional Units to perform enforcing staff appear to take place. field activities are all problems that run through the system of public administration. Some of the problems are related to Enforcement of transport laws is therefore inconsistent. recent reductions in government spending. For one, the joint This is the result not only of the above mentioned regulatory teams were not compensated for their field activities through fragmentation and lack of coordination, but also of practical the summer of 2013, due to the spending cuts required by difficulties and lack of incentives on the ground. According the fiscal consolidation of the public sector. Even the Road to the private sector, some enforcers lack comprehensive Freight Directorate is severely understaffed (four staff mem- knowledge of the legislation, procedures, and documents bers only) and possibilities of hiring or permanently trans- they are supposed to check, as well as motivation to perform ferring staff to the civil service are extremely limited. Ac- intensive checks. Moreover, the private sector perceives an cording to the 1/10 rule, for every ten people leaving the civil inequity in the treatment of domestic and foreign vehicles. service, only one new staff member can be hired. Enforcing officers are perceived as being more tolerant of possible violations when checking foreign trucks at the bor- Lack of proper incentives may also be an important reason der. For example, comparing invoices with documents for the for inconsistent enforcement. The level of fines is compar- International Carriage of Goods by Road (CMR) and transit atively high, and many of these fines end up not being paid documents is apparently not a common practice, leading to by the truck drivers, providing further disincentives to apply distortions in the market via triangular transport without fines at all. As previously mentioned, with foreign traffic, the proper permits, and in many cases permits that would not enforcement officers interviewed complained about obsta- be allowed. Similarly, enforcement of the rule of “max 200 li- cles ranging from “language barriers” to feelings of “resigna- ters fuel” is not carried out, leading to unfair competition by tion” due to the fact that the procedures are complicated and foreign truckers buying their fuel from less expensive places even more prone to failure than when dealing with trucks abroad. It is likely that corruption exists, but this does not having domestic number plates. seem to be the main cause for lenient enforcement. The prac- tical problems in checking the foreign trucks include: i) lan- Rail transport guage barriers and the inability to check documentation that has not been translated, including its authenticity, ii) legally Rail is an important and competitive mode of transport a driver that has been fined has five days to ask for appeal. for medium- to long-term shipping and it is essential While waiting for appeal he can continue to circulate with to enhance Greece’s chances to become a gateway to the no obligation to pay the fine. In conclusion the main areas rest of the EU. The importance of having an efficient and identified by Greek stakeholders as needing improvement of freight-friendly rail system in Greece goes beyond the pro- enforcement include: vision of transport services. The availability of an environ- 20 | Greek Logistics ment-friendly transport mode enhances the overall com- private sector is interested in using train transport to move petiveness of Greece, as a gateway for Eastern and Central heavy goods domestically. Europe. This is particularly the case as modern logistics services increasingly move to green modes of transport. In While further progress in these reforms will help it inte- addition, this trend is particularly strong in Europe, with in- grate more smoothly with plans for an EU-wide rail sys- novations in green transport attracting financial support. tem, the railroad is still marginally used for national and international freight transport. The container volumes Greece has made great strides in reforming its state- transported through rail in Greece are still modest com- owned railway company. In November 2012, the Govern- pared to the main ports in Europe (Figure 2.3), and the actu- ment restructured the railways by separating activities in al transit flows of containers through Greece towards Central several entities: TRAINOSE (passenger and freight traf- Europe or parts of the Balkans are still relatively small and fic), Hellenic Railways Organization or OSE (infrastruc- experimental. Currently, most freight traffic is bulk cargo ture manager), Rolling Stock Maintenance SA or ROSCO for export or transit. However, in part because of a recent (maintenance unit), and GAIOSE (real estate). It also trans- rail connection to the country’s container port, Greece could ferred the rolling stock activities from the OSE group to the face demand for 100,000 TEU9 by 2015. Currently the rail state (Cabinet Act 237/A/5-12-2012), and restricted OSE’s system does not transport containerized cargo. competencies to non-commercial activities only. In 2013, fully EU-compliant regulations for public service are being In conclusion, despite the substantial improvements in adopted, the powers of the regulatory authority RAS are the sector, a number of problematic issues remain. These being extended, and the privatization of TRAINOSE and include: ROSCO are well underway (European Commission, 2013). ▶▶ Users lamented lack of reliability and commercial orien- Privatization of TRAINOSE is expected to help develop the tation to freight customers, despite very significant im- use of rail for freight transport and multimodality, while provement and progressive change of mentality recently. the privatization of ROSCO is expected to help improve The railway system was developed primarily to handle the efficiency of rolling stock maintenance services while passenger traffic. Loading and unloading freight in facil- reducing costs. Overall, this would improve the competi- ities that have not been properly designed for this func- tiveness of the Greek railway system.6 tion result in considerable difficulties and delays. Several potentially large customers complained about lack of a In recent years, TRAINOSE has been undergoing a signif- icant reform process, but improvements in profitability emerged mainly from cutting costs. The railway transport 6 The government expects that one additional feature of the service in Greece is provided by “TRAINOSE,” a state-owned privatization plan will help ensure third-party use of the rail system. Namely, transferring all the rolling stock from OSE to the state company. Other companies’ access to railway infrastructure will allow to lease it on market conditions (through tendering became possible in July 1991,7 and the liberalization of rail procedures). This means that any party is now able to participate freight transport has been applied in principle since 2012. and lease the rolling stock managed by the state, eliminating any advantage for the incumbent provider of transport services While the quality of Greece’s rail infrastructure caused the TRAINOSE. Both the establishment of ROSCO and the handing over country to slide from 57 to 69 in the Global Competitiveness of rolling stock to the state are Memorandum of Understanding Report (World Economic Forum 2013) rankings between obligations and part of the DG COMP state aid files. 2009 and 2013, there have been improvements to the sector. 7 After the adoption of Council Directive 91/440 with the 324/96 Presidential Decree. With the backing of the government, TRAINOSE succeeded 8 In achieving full cost-recovery of operations in 2012, TRAINOSE in cutting costs and erasing an operating loss of 180 million developed a pragmatic business strategy that led to the cancellation Euros in 2010.8 of unprofitable services (about one-third of its services), including international passenger services. Other measures adopted included the renegotiation of potentially profitable services with customers; TRAINOSE has recently attracted new business, including setting its tariffs using a yield management system; and the a much-touted, soon-to-be-signed agreement for block renegotiation of its union agreements. TRAINOSE received state support in reducing its staff by 620 employees (a little less than one train service carrying components for Hewlett-Packard third of its staff ) and transferring its debts. These changes were part (HP) twice a week to the Czech Republic. This deal calls for of TRAINOSE’s new Business Plan and were linked to the restructuring transport of 20,000 TEUs annually and reinforces the idea of of the Hellenic Railways Organisation (OSE), the railroad’s infrastructure manager. Greece as a potential trans-shipment gateway that can offer 9 Twenty-foot equivalent units, a measure of a container ship’s cargo competitive multimodal transport services. Moreover, the carrying capacity. A Detailed Review of the Greek Logistics Setting | 21 Figure 2.3: Greece (GR) ranks low against other European countries in rail transport of goods DE PL FR SE AT IT UK LV CZ LT RO TR CH FI HU ES SK EE NL* BE PT NO SI BG HR DK GR LU** IE LI 0 10 20 30 40 50 60 70 80 90 100 110 National International Transit *NL: Only the total transport of the country is presented. The breakdown between national and transit transport is not available due to confidentiality. **LU: 2009 data. Note: In billions of ton-kilometers. Source: EUROSTAT, 2010 data. positive reception to proposed ideas for customized solu- same freedom that a private operator would have. For ex- tions (including dedicated full trains). As a result, rail is ample, a private operator would have the right to invoke underused for freight. Such issues may become less prob- contractual penalty clauses with the state owner of the lematic if the ongoing privatization is well designed and infrastructure if operating at half the posted speed due to succeeds in creating the conditions for greater attention the poor quality of tracks in some sections. to the needs of freight customers. ▶▶ Dependency on OSE for obtaining carriage rights in in- ▶▶ Rail transport is also underused for freight because ex- ternational traffic with other railway operators is creating pansion, rehabilitation and electrification plans (which problems. From late 2012 until March 2013, OSE was in are the responsibility of OSE) are not being developed in a legal limbo due to problems of completing its Board, consultation with operators.10 The latter are likely to have which has been unable to pursue and sign necessary con- a good sense of the markets and the nature of demand. tracts for usage of rail infrastructure in border crossing The practice of consultation with users, when investment traffic. plans are being developed or implemented, may help fos- ter a more freight-friendly rail system. In general more clarity in the planning process would be useful. 10 On the other hand, the legal requirement in the arrangement is that no interconnection between OSE, the infrastructure manager, and ▶▶ State ownership of operations may be inhibiting expan- TRAINOSE, the rail operator should take place, as the government is sion. TRAINOSE, as a state company, does not have the pointing out. 22 | Greek Logistics Ferry shipping Figure 2.4: A declining trend in ferry shipping Total Adriatic Sea market by a) vehicles Ferry operations provide a crucial service for domestic (passenger cars and buses); b) passengers; tourism and passenger transport, but also for international and c) trucks in 2005 (1) to 2011 (7) trade with Italy, as well as with Turkey and other countries beyond the EU. Coastal and short-sea shipping—mainly VEHICLES TRAFFIC REPORT 2005–2011 ferries carrying passengers, cars and trucks—is crucial to 600,000 Greece and an important part of its logistics. Ferries carry 500,000 +5.76% –3.63% +2.60% trucks loaded with imports, exports and goods transiting –7.24% Greece to reach other destinations in the EU or merchan- 400,000 –1.41% –1.23% +0.58% dise destined to and originating from the Greek islands. 300,000 Despite being subject to regulatory restrictions for both freight and passenger transport, the ferry market has tra- 200,000 ditionally had a number of operators, and competition has 100,000 been intense, including between Greek and foreign oper- 0 ators. In recent years, economic hardship has increased 1 2 3 4 5 6 7 pressure on ferry lines and brought to the surface questions about international competition. PAX TRAFFIC REPORT 2005–2011 2,500,000 +9.69% –4.31% –2.98% Greek ferry operations for freight are mostly destined for It- 2,000,000 –9.71% +2.30% –0.37% aly. Ferry operations between Greece and other EU countries –0.68% 1,500,000 are regulated by the Schengen agreements, so border controls are minimal. Security is a primary concern, but checks are not 1,000,000 a major burden. The main constraint remains the liability of 500,000 the trucking companies in case the truck is caught with illegal immigrants in the cargo area. Approximately 2,000 trucks are 100,000 stopped at Patras or in Italy every year, endangering the reli- 0 ability of the transport route. The government is also spending 1 2 3 4 5 6 7 8 about 93–94 million euros per year in subsidies to maintain TRUCKS TRAFFIC REPORT 2005–2011 shipping connections to the islands, and is therefore also look- 600,000 ing for ways to increase cost effectiveness and serve the islands –2.36% +5.46% in the best possible manner. 500,000 –16.11% +3.20% 400,000 +2.73% –9.33% Over the past few years, the overall demand in the Adriat- –6.25% 300,000 ic Sea market has been declining (Figure 2.4). As a result, consolidation increased in the market, and several small op- 200,000 erators have been squeezed out of business and have joined 100,000 operations. The economic conditions have increased pres- sure on the industry’s three main shipping lines—Minoan 0 1 2 3 4 5 6 7 (Grimaldi), Superfast Ferries (Attica Group) and ANEK lines (Figure 2.5), which together account for 85 percent of Source: EUROSTAT. traffic calling at Greek ports—to cut costs and increase ef- ficiency (Figure 2.6). It has also increased tension between Grimaldi, an Italian company, and the two Greek operators does benefit from some tax provisions applied to seafarers, (Figure 2.7). it is following a practice frequently used by other European The Greek Attica Group has lodged an official complaint with the European Commission arguing that Grimaldi is 11 Shipping Herald, October 30, 2012. (http://www.shippingherald. com/Admin/ArticleDetail/ArticleDetailsShippingNews/tabid/98/ unfairly benefiting from state subsidies.11 While Grimal- ArticleID/7132/Attica-files-complaint-to-EU-Commission-against- di, currently the largest ferry shipping operator in Europe, Grimaldi.aspx). A Detailed Review of the Greek Logistics Setting | 23 Figure 2.5: The Adriatic-Aegean ferry routes in May 2013 (from left to right: Minoan Lines, SuperFast ferries and ANEK Lines) Joint operation by Superfast and ANEK on the Ancona-Igoumenitsa-Patras route, and Piraeus-Iraklion routes Source: Attica Group. Figure 2.6: The Adriatic-Aegean ferry market (market shares by operators in January–November 2012) 40 35 30 25 Percent 20 15 10 5 0 MIN.–GRIMALDI SUPERFAST ANEK ENDEAVOR VENTOURIS AGOUDIMOS 2012 PAX 2012 Vehicles 2012 Cargo Source: Attica Group. firms. The subsidies include the remuneration of seafarers’ due to trade union requirements. Hence, the root problem taxes and social security fees to ship owners—both practices and the solutions to enhancing the competitiveness of the that are in line with EU regulations. The inquiry before the Greek shipping operators seem to lie in modifying the Greek Commission is still pending. manning levels, requirements, and rules. This is indeed under way. The Government has recently reviewed the legal frame- A second issue in the dispute is the staffing levels on Greek work of the domestic ferry industry, with particular attention ships. Compared with Greek ships, the Italian shipping oper- to increasing flexibility of the manning requirements and of ator has substantially smaller, but technically sufficient, crews routing. Moreover, a Ministerial Circular was in preparation on their vessels. Though the Greek ships are similar to those in June indicating that individual labor contracts can be ne- used by the Italians, the Greek crews are larger and all-Greek gotiated freely, once the collective agreement has expired. 24 | Greek Logistics Figure 2.7: Tight competition between Attica their own dedicated facilities in specific locations. As in oth- Group (owner of Superfast ferries) er areas, the tendency for overregulation and administrative and ANEK Lines S.A. overlaps takes its toll on the timeliness and costs of connect- ing private infrastructure to a public network. For instance, 300 the revamping of a pier at a private port took three separate authorizations (coastguard, environment, and local munici- 250 pality) and lasted over one year. 200 150 Million Euros Logistics services 100 50 Efficient and reliable logistics services are essential to the ef- 0 fective distribution of goods in a market. Companies in this sector transport goods, keep track of storage space and op- –50 erate storage warehouses. They also carry out ancillary ser- –100 vices—such as insurance and inventory management—that Attica Attica Group ANEK Lines ANEK Lines are vital to making goods regularly available to consumers. Group Net Pro t Turnover Net Pro t Typically, companies that produce goods outsource logis- Turnover tics. For a business in a modernized logistics scenario, out- 2011 2012 sourced logistics account for 80–90 percent of all transport Source: Annual reports, Attica Group. expenditures. In Greece, however that number stands at only about 20 percent. Improvements to logistics outsourc- Ports ing could make distribution and supply chains more reliable while keeping costs low. Current port modernization projects and the efforts to move to landlord port models in Greece’s two largest ports, Piraeus Fragmentation and excessive regulation of the logistics and Thessaloniki, are welcome initiatives. services market have been detrimental to a wide range of businesses that transport and distribute goods—both do- Piraeus hosts a trans-shipment activity not serving the lo- mestically and internationally. The fragmentation has hin- cal market directly, and Thessaloniki plays a natural gate- dered efforts to develop modern warehousing, to integrate way role for the regional economies (Bulgaria, Romania, services, to speed transactions, and to benefit from a more and the Former Yugoslavian Republic of Macedonia- FY- intensive use of information technology. This condition, ROM). Container volumes for the local markets in Pirae- which has led to the proliferation of small or informal logis- us and Thessaloniki are comparable (300–400 thousands tics-providers, has limited the ability of Greek businesses to TEUs), and dry bulk volumes are higher in Thessaloniki, focus on their core products and the services they perform which has a good railway connection to the hinterland and best. It has also limited the number of enterprises that are in a strategic positioning near the border. In addition, over 1.5 a position to benefit from modern supply chains. million TEUs go through Piraeus as trans-shipment cargo on its way to other ports. As Thessaloniki is essentially on the Third-party logistics providers (3PLs) same feeder routes on the Aegean Sea as Piraeus or Izmir, it serves as a natural European gateway. A lack of clarity in both regulations and the authorities responsible for enforcing them hurts efficiency in the A recently completed railway connection between Piraeus logistics sector. The logistics provider is not given a com- and Thriasio will increase multi-modal container traffic prehensive and exhaustive list of regulations to comply with going through the Piraeus container terminal. This more and documents to produce (see Box 3). There also is lack of efficient connection between land and sea has the potential to clarity about which department or agency in government is attract supply-chain operators and others in manufacturing. responsible for specific policy areas. The confusion trans- lates into higher information costs and sub-optimal private Connecting private ports to a public network is not easy. economic decisions. This requires the logistics operators to Some large scale activities, such as extractive industries, need produce a rather high number of certificates even for sim- A Detailed Review of the Greek Logistics Setting | 25 ple transactions, such as selling a truck. It also leaves a wide sulted in a diversification of operators’ customer bases. On berth for interpretation. For example, the distinction be- process innovation, operators of larger warehouses have built tween commercial and own-account operation is not always automated warehouse systems (AWS), allowing for more ef- clear; and the use of own-account vehicles is reportedly rath- ficient picking of orders and management of labor. Although er widespread in commercial or in “for hire” transport. point of sale (POS) data remains limited, most suppliers have improved their forecasting methods to avoid over-orders. At Over-regulation in some areas coexists with gaps in reg- the same time, they have adopted a dual strategy of maxi- ulation in other areas, and old regulation sometimes mizing loads to reduce transport costs: by adopting a mix coexists with new regulation. New regulations are a step of delivery frequencies to meet the needs of retailers trying forward, but need additional support measures and coher- to limit their stock they avoided adding significantly to the ence with the wider regulatory environment to achieve the costs for transport. Such market-driven improvements risk targeted reforms. For example, the new industrial legislation being undone if demand picks up before regulatory reforms (3982/2011) streamlined and simplified the procedures to locks in the efficiency gains achieved. open warehouses. However, warehouses can also be licensed under different legislation (i.e., Presidential Decree 79/2004 Regulations inhibit logistics-sector performance. To date, or according to municipal regulations, for small warehous- the sector continues to be hindered by regulations that re- es which are part of a retail activity). Improvements and in- quire frequent reporting on physical activities and on the use novations of Law 3982/2011 have not been applied to other of labor. Regulations also restrict efforts to introduce more types of legislation and grey areas of application remain. For flexible allocation of labor and assets, including co-location example, it is not clear if a 3PL equipped with packaging ma- of storage, and mixing loads in trucks. They also place im- chinery should license its warehouses for operation under pediments on the transfer of assets from less efficient enter- law 3982/2011 for industrial activities, under Presidential prises to more efficient ones. Decree 79/2004, or under both regulatory schemes. The un- certainty in the law leaves great scope for interpretation by The problems fall in the following categories: authorities and public officers. 1. The licensing and permitting system to open and operate a warehouse. While the current contraction of economic activity 2. Technical standards applied to warehouses. brought a rationalization of distribution channels in the retail sector and forced service-providers to improve their 3. Safety measures. operations significantly, these efforts of the market oper- 4. Relationships with local authorities: land planning and ators to improve business practices risk being temporary local fees and taxes. unless the regulatory environment also improves. As the 5. The opportunity to cluster logistics into logistics zones. sector continues to squeeze out inefficiencies, the use of 6. The problem of the legacy of logistics activities with third-party logistics service-providers for both transport non-compliant facilities. and warehousing is increasing rapidly, and firms are forced to focus on their core activities in order to survive. On the 7. The case of bonded warehouses. demand side, the collapse of consumer demand has led to a consolidation in the retail sector, with only sufficiently large Most large 3PLs that are based in Greece enter international and efficient firms able to survive. The result is the rational- partnerships to operate logistics bases to distribute brands in ization of distribution channels through strategic placement Eastern and Central Europe. Lower rates and improvements of distribution centers along the supply chains. Turning to to ports and their connectivity to land infrastructure are be- the supply-side of logistics services, the economic downturn ginning to make Greece a true gateway to Europe. has pushed efficient third-party logistics operators to seek ways to enlarge their customer base to other (smaller) users Warehousing and to introduce process innovations. The lack of liquidity resulting from the financial crisis has forced a dramatic re- Warehouses are no longer just simple storage sites. Ware- duction in inventory while the percentage of direct deliveries housing is indispensable for companies to balance supply and has increased. While the recession has led to substantially demand on the market place. Their geographical location, higher unit costs for distributing, and picking and packing access to facilities and transport networks, and construction (which require more manual work per unit sold), it has re- are strategic elements that have important implications for 26 | Greek Logistics firm performance. Efficient warehousing decreases costs, in- in the law For example, the new legislation indicates that the creases reliability, and improves customer service. Without authorities should respond to a request for a building per- storage, companies cannot manage when and where to move mit within three days, but effectively it can take up to nine goods along the supply chain. Warehousing is also a com- months. There are essentially three phases for this process: mercial service provision in its own right and allows more efficient consolidation and storage of inventory. This is es- a. Pre-permit procedures: The investor must deal with pecially important for companies that are part of global pro- preliminary authorizations that may influence the de- duction networks and those that participate in e-commerce sign of the project. Procedures regarding archeologi- and sell to consumers directly from a warehouse. cal clearance and forestry are not unique to Greece, but some procedures are cumbersome (such as the Reflecting the growing importance of logistics, ware- process of requiring separate clearance from the air houses have evolved from simple storage sites into stag- force or civil aviation on the heights of the building). ing platforms for a multitude of functions. They can be b. Permits with two main steps in sequence (though bigger than 100,000 square meters. These platforms allow other procedures, specific to related components of the handling of a great diversity of products simultaneous- the projects, may be required, such as road or rail ly and the profitable management of the complex flows of connections, water pipes, generators, etc.): diverse goods. Such platforms allow this by covering—with i. Environmental authorization given by the region- increasingly sophisticated methods and machinery—sev- al authorities on the basis of an impact study and eral functions of the distribution chain, including prepara- for large or high impact establishments by the tion, conditioning, storage, loading, unloading, and trans- Ministry of Environment. port, as well as the management of the distribution activity ii. Establishment license, given by the regional au- itself. thorities. Licensing procedures to open and operate a warehouse are iii. Building permit, which also requires providing conceptually similar to other EU countries, but coordina- certificates or information from specialized ser- tion among intervening agencies lags and there is scope vices such as the road department (national, re- for streamlining and simplifying procedures. Licenses for gional or municipal depending on the category of opening and operating a warehouse can be obtained through the road), fire department, electricity company, three different types of legislation: Law 3982/2011 for indus- etc. The building permit is provided by municipal trial activities, Presidential Decree 79/2004 for 3PL activi- or other local authority in charge, based on urban ty and, in the case of warehouses attached to a retail point, and regional zoning. municipal regulations. Procedures can be cumbersome, the c. Operating clearances, which are essentially two: i) attribution of competences can be ambiguous and best prac- certificate from the fire brigade, and ii) operating li- tices introduced in one type of legislation do not necessarily cense from the regional authorities. extend to other types of legislation (see Box 5). The existence of all these different steps is justified but the The steps needed to open a warehouse are broadly similar time delays in the process of obtaining all the necessary to those needed to open a manufacturing plant (Figure 2.8 permits could be reduced and the process streamlined. summarizes them schematically). They are in line with the The sequence is logical and is similar in most EU countries. practice found in other countries in Europe, with as many The problems are two. First, there are important time delays safety concerns. Procedures are implemented by local au- in obtaining the permissions envisaged in each step. Obtain- thorities at the regional and municipal levels. ing the pre-permits, and in particular the forestry authori- zation, appears to be the most problematic and is criticized. Companies are concerned with the lack of consistency and In particular, it appears excessive and outdated. Second, coordination among intervening agencies. They also com- there are a number of redundancies and overlaps on the re- plain about the time it typically takes to get clearance from all quirements for different steps. This is particularly the case individual agencies to get a permit and the considerable un- for requirements for the establishment license. It duplicates certainty of the duration of the process, overall. New regula- some of the procedures already necessary for obtaining the tions and laws indicate time limits, but lack of staffing means pre-permits and the environmental authorization and slows that authorities are not able to comply with the requirements down the process of licensing. A Detailed Review of the Greek Logistics Setting | 27  xamples of the sequence of administrative processes for warehouses under licensing for Box 5: E industrial activities and for licensing for freight-forwarding activities Example 1: The first example describes the administrative steps for licensing a warehouse in the Veotia regional unit. This example has been provided by a company for an investment, which was licensed in 2010 under Law 3325/2005. While scope for simplification and rationalization remains, the major structural reforms implemented since 2010 have already brought about important improvements, which will be perceived by the market once demand picks up again. This law has been now replaced by Law 3982/2011, which has simplified the procedures for Steps 3 and 5. Moreover, the example indicates a number of approvals to be carried out by the prefecture. However, the Kallikratis Plan (Law 3852/2010) has brought about a major overhaul of the administrative structure of the Hellenic Republic, which has replaced prefectures with regions and regional units as of January 1, 2011. Finally, it should also be noted that some of the steps described below are specific to the location (e.g., Air Force approval due to proximity to the Athens-Lamia highway) or the design (connection to the railways). 1. Permission from Archaeological department. There had to be a separate preliminary and a final approval (request for the final approval sent on 15-07-2008 and approval received on 16-07-2008). 2. Permission from Forestry department. There had to be a separate preliminary and a Final approval (request sent on 25-08-2005 and approval received on 12-12-2005). 3. Preliminary study about environmental impacts, approved by various departments and ministries, such as departments of Agriculture, Environment, Ministry of Development and Competitiveness, etc. Had to be approved by: Ministry of Environment—Special Environmental Department (ΥΠΕΚΑ-ΕΥΠΕ), Ministry of Development and Competitiveness—Environmental Department (Υπουργείο Ανάπτυξης—Διεύθυνση Χωροθεσίας και Περιβάλλοντος), Ministry of Environment—Country Planning Department (ΥΠΕΚΑ—Διεύθυνση Χωροταξίας), Prefecture of Viotia Urban Planning and Environment Department (Δ/νση Πολεοδομίας and Περ/ ντος Νομαρχιακής Αυτ/σης Βοιωτίας), Prefecture of Viotia Agricultural Department (Δ/νση Γεωργίας Νομαρχιακής Αυτ/σης Βοιωτίας) (request sent on 04-04-2006 and approval received on 28-06-2006). 4. Building height approval by Hellenic Air force (request sent on 10-11-2006 and approval received on 20-12-2006). 5. Approval of Environmental Study by Hellenic Ministry for the Environment, Physical Planning and Public Works. Only valid for 5 years, and needs constant renewal. Had to be approved by: Ministry of Environment—Special Environmental Department (ΥΠΕΚΑ-ΕΥΠΕ), Ministry of Development and Competitiveness—Environmental Department (Υπουργείο Ανάπτυξης—Διεύθυνση Χωροθεσίας και Περιβάλλοντος), Ministry of Environment— Country Planning Department (ΥΠΕΚΑ—Διεύθυνση Χωροταξίας), Prefecture of Viotia County Council (Νομαρχιακό Συμβούλιο Βοιωτίας) (request sent on 08-08-2006 and approval received on 26-01-2007). 6. Approval of connection with service road of Athens-Lamia National Highway. (request sent on 15-11-2006 and approval received on 02-03-2007). 7. Permission for Building and Mechanical installation by specific department of the Prefecture. (request sent on 29-11-2006 and approval received on 05-03-2007). 8. Building permission from Urban Planning (request sent on 29-03-2007 and approval received on 03-07-2007). 9. Permission for installation of generator by specific industry department of the Prefecture (request sent on 22-10-2007 and approval received on 14-04-2008). 10. Approval of Environmental Study for rainwater pipe line (request sent on 17-09-2007 and approval still pending). 11. Operating license by specific department of the Prefecture (request sent on 26-05-2008 and approval received on 31-10-2008). 12. Active-Fire protection certificate from local Fire Brigade. Continued on next page 28 | Greek Logistics Continued Box 5:  Application for inclusion of the building in the derogation procedure of volume of fire resistant departments. 13.  Had to be approved by: Prefecture of Viotia Development Department, Industrial Section (Δ/νση Ανάπτυξης, Τμήμα Βιομηχανίας Νομαρχιακής Αυτ/σης Βοιωτίας) (request sent on 17-05-2007 and was rejected on 03-09-2007). Example 2: The second example has been provided by a company for an investment in the Aspropyrgos area which was licensed under Presidential Decree 79/2004. The investor indicated that he had to follow the same procedures listed under Example 1, except for steps 4, 6, 7,10 and 11. The process of licensing lasted 18 months from beginning to end. This law is still in force and requires simplification and rationalization. Solutions suggested by the Greek business sector to simplify licensing procedures: • Creation of a Single Point of Access and Authorization for required permissions and approvals. • Commitment of state to examine licenses at specific time schedule with automatic issuance, and indemnity if the deadline is missed. A main source of delays seems therefore to be due to prob- main street in city center Athens. Finally, while the need for lems of organization within and across licensing agen- archeological assessments is undisputed, it can be also very cies. Companies have to deal separately with the agencies cumbersome and does not allow for fast-tracked procedures that provide certificates with little consistency. This is called in cases for which ex-ante the archeological impact is trivial a certifications based approach. When all administrative (e.g., excavating five centimeters of soil to build a road).12 certificates are available, the investor can get the necessary clearance from the national, regional and municipal author- Legislation introduced in 2011 provides simplifications ities. Environmental and safety concerns naturally involve and improvements to the licensing regime for industrial many interests and agencies, but these are coordinated by warehousing that do not extend to the other two ware- the Ministry of Environment. However, approaches based housing licensing regimes. The licensing process has been on administrative certificates risk creating delays, duplica- simplified for industrial warehousing (licensed under Law tions and sometimes inconsistencies (e.g., between estab- 3982/2011), and steps for more transparent communication lishment license, environmental impact and building permit with the users have been established, including informative assessments). web-based communication.13 For example, now licensing for the installation of establishments in which there are no per- The spatial planning regime, the difficulties in obtaining manent mechanical installations (except forklifts) and that certificates from the forestry and archeological authori- do not store flammable goods is relatively simple. The steps ties and various restrictions relative to land use are per- are the following: A declaration of compliance is submitted ceived as most lengthy and problematic. There are nine to the relevant licensing authority accompanied by necessary different categories of land use that range from residential, pre-approvals and documents. These documents include a to urban and encompass industrial use with low environ- mental impact, with high environmental impact, commer- cial, etc. Moreover, part of the Greek territory is unclassified. 12 Archeology is obviously a most important safeguard for any construction, they intervene upstream to inform the developer about This creates ambiguity as to the possible uses of specific plots the sensitiveness of the zone, and downstream to check potential of land. Moreover, according to operators, forestry certifi- discoveries during construction. It seems that this constraint is cates are difficult to obtain within reasonable time frames. very much accepted by developers, and that archeologists are professional, but not flexible. As in some other countries, there is a Linked to the obsolescence of land planning in Greece, they legal framework that obliges the developer to contribute financially are needed also for areas that are clearly urban or industrial, to digs, which is a reasonable requirement. based on land mappings that date back to several decades 13 See for example the website of the Attica Region. It has a page ago. Forestry may also be called into cause for licensing is- where the user can access information and questionnaires to request licenses: http://www.patt.gov.gr/main/index.php?option=com_ sues pertaining to the green space between the lanes of a content&view=category&layout=blog&id=210&Itemid=209&lang=el. A Detailed Review of the Greek Logistics Setting | 29 declaration by a civil engineer certifying the stability of the vestment in automated warehouses where height would be a building, a health certificate, and a fee for paperwork. The constraint. other two licensing regimes for warehouses have not been reformed, suggesting that there is scope for transferring The rules governing fire regulations are a national issue. to them some of the best practices and innovation of Law The regulatory framework is old dating back to 1988 (Pres- 3982/2011. The full sequence of licensing permits is report- idential Decree 71). Current legislation has strict require- ed in Figure 2.8. The schematic representation also clarifies ments for passive fire protection. For example, according differences in the licensing procedures for establishments to the applicable regulation,14 each warehouse should be under Law 2982/2011 and PD 79/2004. divided into “fire compartments” of a maximum volume of 15,000 m3, separated by firewalls. This creates impractical Technical standards for warehouses are relatively restric- storage areas that are extremely cumbersome for automation tive, resulting in less than optimal layouts and hurting pro- or high volume areas. Moreover, the regulation has perverse ductivity due to less efficient and flexible storage practices effects—operators have incentive to overload the restrictive and operations within the warehouse. There are essentially storage spaces within the fire compartments, increasing safe- two types of technical standards governing warehouse con- ty risks. In 2013 the fire department was studying options struction: (i) limitations on building-height and maximum to move to a more modern, risk-based assessment for com- land coverage, set by zoning rules applicable to the industri- pliance checks. A new fire authorization, to be issued in the al, commercial, and unidentified areas where warehouses are summer of 2013, limits checks to 30 percent of the buildings, built; and (ii) the fire regulations, which are implemented by with more attention to large buildings that are close to sen- local fire brigades. The rules governing warehouse size are sitive areas. In 2011, the Technical Chamber of Greece, the generally set at the local government level in urban plan- corporate body of all qualified engineers in Greece, which ning processes. Height-requirements are more restrictive in acts by law as the technical consultant to the Greek state, Greece than in Western EU countries where 30-meter ware- houses exist, compared with a legal maximum of 11 meters in the Thriasio area, and 13 meters in Sindos. This hurts in- 14 Presidential decree PD 71/88 (Government Gazette B 316 A). Figure 2.8: The permit system applicable to warehouses Licensed according to commercial activity by Warehouses attached to retail municipal authorities commercial premises (mainly supermarket warehouses) 30 | Greek Logistics proposed modifications to the fire regulations. This implies mentary activities (horizontal integration) and/or users and lifting some of the constraints and rigidities on passive fire contractors of upstream or downstream services (vertical protection, including on the maximum volume of space to integration); distance from the consumer and end-markets; separate by firewalls. Yet, the proposal from the technical potential for two-way transport (to avoid empty loads on chamber does not respond to some of the key constraints of return trips); cost of land and construction; social, environ- logistics facilities, including the restrictions on the volume of mental, and political risks. To be competitive and efficient, fire compartments, which hampers operators’ ability to orga- a logistic zone should be planned not only thinking of the nize warehousing more efficiently. needs of the industry today, but also of its developments sev- eral decades from now (e.g., large access roads to accommo- Logistics Zones date the ever larger trucks and containers, flexible and easy to restyle facilities, etc.). Most logistics zones in Greece have developed without planning, generating inefficiencies in the facilities. Logis- Three sets of issues emerge as particularly important for tics zones (for warehousing, container depots, truck depots, a more carefully planned approach to logistics zones in etc.) in Greece have clustered in relatively few areas. In the Greece: Attica region, the main concentration is in areas connected i. The role of local governments regarding planning, by Attiki Odos: Mesogeia, Asporpyrgos, Mandra, Magou- access, and municipal services. la, Elefsina, and Thriasio. Small-scale logistics activities are concentrated closer to the center of Athens in Elaionas. The ii. The rationale for and content of a legal framework warehouse facilities have developed over time and clustered for logistics zones. without planning or attention to the special needs of the in- iii. The case of semi-legal zones to be reconverted and dustry. The warehouses were built on land with different uses reclassified. (industrial, commercial, unclassified), and sometimes with ad hoc specifications and no proper authorization. In many The lack of regional planning has led to areas without cases, the 3PL operator is a tenant. As a result, access infra- adequate supporting infrastructure and a great deal of structure is relatively poor and warehouse zones intermix variance in building standards across regions. The ware- with residential areas. Not all buildings are compliant with houses in the Attiki Odos area have been built according to zoning or safety regulations, especially in Elaionas. local zoning standards for height and land coverage. As part of the National Logistics Strategy process, documented in By contrast, the more recent Sindos zone in Northern Appendix 1 to this report, working groups have compiled Greece is a planned logistics zone with adequately de- a detailed inventory of the requirements for land coverage signed layout and multimodal access. When the authorities and of building ratios applicable in the municipalities with developed the Sindos industrial park, a majority of investors a high concentration of logistics activities (Thriaso, Tanagra were logistics companies interested in taking advantage of and Sindos). Municipal fees in these areas have also been the exceptional location of the park. Another planned but documented. In most cases, the building ratios are smaller different concept has been the Thriasio Pedio multimodal than the European (0.4 to 0.45 against rations that go up to a logistics centers operated by Gaiose, the real estate manage- coefficient of 0.6). ment company of rail facilities, where relatively small spaces can be rented. Municipal fees vary greatly across the country and are considered high by the profession compared to the quality The location of logistics activities and the infrastructures of services provided (See table 2.1). For example, logistics to support them are important strategic components for operators documented that in some municipalities, the fee the competitiveness of the sector. A logistic zone should be is based on the total land area of the estate, whereas in some viewed as an integrated space whose competitiveness is de- others it is based on the built space alone. Fees represent size- termined by a variety of factors. The most important factors able portions (ranging from five percent to ten percent) of to consider are the following: connections with backbone the rent value of warehouses. The private sector complains transport infrastructure (rail, road, airports, and ports); this is not commensurate with the low quality of municipal access to a qualified workforce; charges (fees and taxes) for services or infrastructure available. For example, the local services (such as good road access, illumination, availability road network serving the logistics areas in the Attica regions of public transport for the workers); proximity with comple- is relatively poor, with narrow roads ill-suited not only to the A Detailed Review of the Greek Logistics Setting | 31 Table 2.1: Fees have three components (data for early 2013) Annual fees and taxes by type Type of space Aspropyrgos Sindos/Kalithea Sheltered 2.22 €/m2; after 6,000m2 1.35 €/m2 1.80 €/m2 Municipal fees* Unsheltered 2.22 €/m2; after 6,000m2 0.69 €/m2 0.60 €/m2 Sheltered 0. 87 €/m2 0.28 €/m2 Municipal Tax Unsheltered 0. 43 €/m2 No tax Charge on rent 3.60–7.80 €/m2 2.16 €/m2 *Annual level of fees paid monthly as part of the electricity bill. Source: LPC, ST1-ST2 working groups. larger trucks that are likely to be the standard in the coming activities. As a consequence, logistics tends to locate outside decades, but also to current truck traffic needs. residential and commercial areas, where the cost of land is lower. Environmental concerns and the heavy vehicle traffic Previous attempts to designate protected areas for logis- generated by logistics activities related to industrial business- tics activities have been unsuccessful. A decade ago, in an es also push logistics into peripheral areas. effort to promote multimodal transport and consolidation of logistics, Greece created a law defining Freight Villages.15 Semi-legal zones. A number of logistics zones have emerged Based on the availability of rail connection, the law pre- in different parts of Greece where the spatial planning re- scribes three categories of freight villages: (i) freight villages quirements do not meet the actual use of the facilities—for with rail connection must have a minimum of 50 hectares; example, logistics zones developing on agricultural land. (ii) freight villages with rail access at least 50 km away must Even large facilities are sometimes found in such semi-legal have a minimum of 25–50 hectares; and (iii) Freight villages zones with no proper legal permit. Such a legal limbo creates on islands or if rail access at least 100 km away must have uncertainty and reduces the potential for investment. This is a minimum of 10–25 hectares. The law also defines freight an issue between the municipalities which regulate the land villages according to their distance from ports. There are use and the owners of the facilities. Yet because it is wide- no examples of investments made under this law, and most spread across the country, the central government needs to countries in Europe have seen fast development of logis- bring some guidelines on how to solve this situation. tics centers without the support of such a legal instrument. Warehouses can be built in business parks, and the need for such a law is debatable. Trade facilitation and transit issues The challenge of developing modern logistics in Greece is Trade facilitation, or the need to simplify and expedite real, and the binding constraint is insufficient recognition procedures for exports and imports, is an important part of the specific needs of the industry. Nevertheless, the flex- of the supply chain agenda. Aspects of trade facilitation ibility of warehouse location in different zoning categories include activities under Customs Administration control in Greece is positive. There is no good reason for creating a within the country (special regimes), as well as regulation of specific zoning category for logistics activities. Warehouses ancillary professions, such as customs brokers. Greece per- can be built in commercial zones, industrial zones or un- forms not well in customs functions; that category earns the determined use zones. They can also be built in designated lowest score in the country’s Logistics Performance Index business parks. The nature of logistics activities requires high (LPI) evaluation. The Greek government has already tar- land coverage: on average there is a ratio of one worker per geted trade facilitation as a priority area for reform through 200 square meters in a logistics facility. In comparison, there is generally one worker per 20 square meters in manufactur- ing and one worker per ten square meters in urban economic 15 Law 3333/2005. 32 | Greek Logistics Box 6: The National Trade Facilitation Strategy The strategy, publicized in October 2012, is led by the Ministry of Finance, Ministry of Development and Competitiveness, Ministry of Foreign Affairs and Ministry of Rural Development. There is an active Trade Facilitation working group consisting of senior officials from these ministries. The current focus of the working group is on the establishment of a single window for export facilitation. In addition, the working group is engaged in several components, including: • Business process analysis (BPA) to map the procedures. Several BPAs have been conducted, tailored to specific products (e.g., kiwi exports to China). • Customs procedures and risk management. • IT (single window), with the Integrated Customs Information System (ICISnet). Prior to the establishment of the strategy, the Greek Government received expert advice from European customs officials, which identified the following major challenges faced by Greek exporters: • Widespread administrative barriers to export; • Absence of a coordinated and commonly accepted export-driven strategy and support; and • Financial constraints, in particular related to the length of time taken for VAT refunding by the Greek administration. The report also noted that: • Procedures are still manual; • Weaknesses exist in risk management and the percentage of physical inspections is high; • Monopoly power is given to customs brokers (before the law was changed); and • There is relatively little use of the simplified procedures and special regime for compliant operators that the EU code allows. major initiatives, including the preparation of the National ▶▶ Intra-EU trade to Eastern European countries through Trade Facilitation Strategy (Box 6). the Bulgarian border. ▶▶ Intra-EU trade container-shipped through Piraeus or an- Trade facilitation challenges other Greek Port. ▶▶ Extra-EU trade container-shipped through Piraeus or Trade facilitation in Greece is complex. Although an another Greek Port. EU member, until recently the country was physical- ly de-linked from the rest of the EU. Most Greek trade is The port of Piraeus accounts for the largest container with the European Union or with countries that have trade volume. It handles about 2,000,000 TEUs per year (2012). agreements with the EU. Duties are thus collected on only The bulk of this traffic goes through the Piraeus Container a fraction of Greek trade. However, geography and logistics Terminal (PCT). The Piraeus Port Authority (PPA) terminal, complicate the situation: Greek trade with the EU has to go operating as a trans-shipment gateway for Mediterranean through transit in third countries or be shipped internation- Shipping Company (MSC), accounts for about 20 percent of ally. There are essentially five reference cases applying to container movements in Piraeus. The PPA terminal clears a trade (both to imports and exports). relatively small number of containers, especially as many of them are not dutiable (about three percent of containers are ▶▶ Intra-EU trade going on ferries (mostly Patras-Brindisi/ destined for the local market). Ancona). ▶▶ Intra-EU trade going in transit through non-EU coun- Declarations are still mostly submitted by customs brokers tries (Former Yugoslav Republic of Macedonia and Ser- (despite the fact that the new law abolished this requirement) bia), under TIR Carnet. to the customs office. There are two different procedures: A Detailed Review of the Greek Logistics Setting | 33 ▶▶ The containers originating from non-EU countries, the Border controls by various agencies, especially phyto-san- brokers submit the documentation to customs and pay itary, are cumbersome and create delay. Control by oth- the duties. The process is essentially manual and involves er border agencies is done before the customs submission. (i) paper documentation; and (ii) direct payment in cash Those agencies are not in the perimeter of the terminal and or bank check. According to the terminal operators, the come on demand for inspection. Phyto-sanitary control has process is not too long (three days seems typical for the been mentioned as the most problematic. Delays involving dwell time, but varies widely). those transactions could not be evaluated. ▶▶ The containers from the EU, which are mostly accompa- nied by a T2L,16 document that is expedited essentially in Physical inspection for non-EU imports is high. The phys- real time upon submission to customs. Operators men- ical inspection level remains high at about 20 percent for tioned that normally containers are removed the same non-EU import containers in the Port of Piraeus In the Port day. of Thessaloniki, however, only about three percent of con- tainers are physically inspected. However, the pilot initiatives Despite having what seems to be an essentially manual under the National Trade Facilitation Strategy are expected and cumbersome customs clearing process for trans-ship- to bring improvements if extended to all the traffic and im- ment goods clearance is not perceived as a major opera- ports. The percentage of controls on goods upon export per- tional problem in the terminals. The number of containers formed on a pilot basis (by certain customs offices) is indeed for the local market (400,000 TEU) is sufficiently small to be in line with the EU average percentage of controls (five per- managed effectively even within a manual and somewhat an- cent). These developments are likely to depend on the entry tiquated process. Thessaloniki on the other hand does not do into full operation of ICISnet and on the subsequent upgrad- trans-shipment, but handles a similar number of containers ing of the risk analysis system are. for the local market (300,000 TEU). Hours of operation are inadequate. This is the most com- mon problem mentioned by the operators. While at the land Challenges in Customs Administration borders, customs offices are open 24/7, in the rest of the customs offices and until recently, non-dutiable containers The PCT’s customs clearance procedures fill a vacuum in could only be processed from 7am to 5pm during weekdays, coordination of trade procedures by customs agencies. up to Saturday mornings. Recently, however, Greek customs COSCO, the company that operates the PCT, has been pro- authorities’ working hours have extended operating hours, active and has taken implicit responsibilities in facilitating on a pilot basis, at the Customs Office of the Athens Inter- clearance at Piraeus. The key features of the PCT initiative national Airport “El. Venizelos” (24/7 basis) and the 5th and are the following: 6th Customs Offices in Piraeus (up to 9pm on workdays ▶▶ PCT electronically receives the manifest from the ship- and 3pm on Saturdays), in an attempt to respond to traders’ ping agents and transfers it to customs. needs. A cost-benefit analysis will be carried out at the end of ▶▶ PCT opens a physical single window, where brokers the pilot period to quantify the benefits of such an extension come first to check that the documentation is complete, and take decisions to apply to all customs offices in Greece. including for customs and other border control agencies. Meanwhile, dutiable containers cannot be processed after ▶▶ After PCT checks the files and the payment is made, bro- 3pm on weekdays, because an armored truck needs to collect kers go to the customs department which is next to the the duties and carry them before bank closure. PCT “single window.” The need to pay in cash or via checks is a barrier to entry ▶▶ Brokers get customs clearance. that until recently maintained a de facto monopoly for ▶▶ Once the clearance is done, truckers are notified by PCT brokers. Established customs brokers used to have a cred- or by the brokers that they can proceed to the gate. it line with Customs that allowed making payments swiftly. ▶▶ PCT has also set up a RFID17 system with preferred truckers (about 1,000 trucks are involved in the scheme). 16 The T2L form is a document certifying the EU status of the good. In some cases a T2 document is instead produced, which certifies This initiative by PCT is excellent, but goes beyond what a goods under the internal Community transit procedure. terminal operator typically does. It fills a vacuum in coordi- 17 RFID, Radio Frequency Identification, is the use of radio-magnetic nation of trade procedures by the customs agencies. fields for the purposes of automatic identification and tracking. 34 | Greek Logistics Other operators instead had to pay in cash or via checks, put- able to lodge his/her declaration without hiring a broker, this ting them in an uncompetitive position. Moreover, payment almost never happens. Despite the efforts of the government after hours is not possible and creates further delays for pro- to communicate the details of the reform to the operators cessing goods that arrive later in the day. These barrier how- (see Box 7), the perception of the private sector is that there ever are being lifted, following the introduction of electronic are still problems for a freight forwarder in hiring a customs payment for customs duties, taxes and other charges through broker as his or her own employee. Some operators lament- ICISnet (expected for late 2013) and the new legislation on ed social security issues: apparently the social security code customs brokers (see Box 7). regulating freight forwarders cannot be applied to a customs broker. The social security conditions for the latter are regu- Reliance on customs brokers created incentives for lack lated by the code for couriers. of transparency and weakened the capacity of traders in dealing with customs on their own. Until recently, customs Special regimes are also under-utilized. In accordance with brokers in Greece were given a monopoly on interaction the EU customs, operators in Greece are entitled to simpli- with customs and were a closed profession (Act 718/77). fied procedures or special regimes meeting certain codified This created a dependence on customs brokers, incentives and transparent criteria. This type of regime is critical to to maintain a low level of transparency, and lack of clarity increase the productivity of manufacturers trading inter- on the extent of customs brokers’ responsibility. This ar- nationally, as it eliminates a series of documentary and fi- rangement between customs officials and customs brokers nancial transactions. This possibility has been granted to 31 provided little incentive for the customs administration to Authorized Economic Operators (authorized consignees) as develop its operations in line with EU standards. Moreover, of June 2013. According to Greek authorities, 10 additional the customs brokers’ monopoly inhibited the development applications are pending, as the operators need to implement of customs skills among traders which remain rather weak. corrective actions requested by the customs authorities. The number of applications remains low compared to the num- The law that recently liberalized the profession in line ber of operators that would qualify. Some operators lament with the EU code and international best practices remains that customs has limited capacity to certify the operators underutilized. While in principle a trader should now be who can benefit from the simplified regimes while the Greek Box 7: New legislation on Customs Brokers In accordance with the provisions of Law 718/77, as amended and updated (by Law 4093/2012, Article 1, subparagraph E5 (Government Gazette 222, Issue A and Legal Act “provisions on emergency matters under Laws 4046/2012 and 1493/2012”), significant changes have been introduced in the performance of customs representation. These changes have been specified and notified to economic operators through their professional associations/unions and chambers, by means of a ministerial circular (Δ19Γ 5044128 ΕΞ 2012/23-11-2012). This circular indicates that: a) Customs clearance may also be performed by natural or legal persons or associations of persons other than customs brokers and firms of customs agents, in particular: • by the owner of the goods in person (as regards goods belonging to natural persons) or by the legal representative of a legal person in public or private law, either resident or non-resident (in the case of goods belonging to such a legal entity), or • by the representative(s) of the owner of the goods (other than customs brokers), who may either be employed by the owner or a natural or legal person or association with legal capacity authorized by the owner of the goods to act on his behalf as a customs representative. b) Restrictions on pursuing the profession of customs broker as a freelancer have been eliminated and it is now possible to work as a customs broker also through a subordinate employment relationship; as a result, a legal entity may hire a customs broker as its employee, to represent it at customs clearance. A Detailed Review of the Greek Logistics Setting | 35 government points to low demand from the operators. It Transit trade is subject to special customs procedures appears that better communication between the public and (transit regime) that facilitate trade and transport while private sector is needed, to understand the reasons why op- protecting the state’s revenues in the transit country. Tran- erators do not use the simplified procedures and to increase sit regimes guarantee the payment of duties and taxes that awareness among import/export companies that comply might become due if goods are (fraudulently) diverted and with the conditions for simplified procedure licenses of the enter the market in the transit country. Transit regimes are advantages of such arrangements. A series of promotion ini- common practice in Europe and Central Asia; they proved tiatives through category associations and directly targeting essential in facilitating trade for decades. Greece implements top exporters is underway. two customs transit solutions: the Community Transit (through the New Computerized Transit System or NCTS) Current management of bonded warehouses is not for trade transactions within the EU, on common transit aligned with international standards. Bonded warehouses for trade transactions with EEA countries or between EEA are an important tool for logistics development in Greece. countries as well as international transport of goods under They are critical to logistics activities where goods are re-dis- the Transport Internationaux Routiers (TIR) within the tributed from Greece to other countries. The principles of EU (NCTS-TIR); the rest of the traffic is handled through good management of bonded warehouses are fully included a paper-based system, the TIR Carnet, for the trade with or in the Common Customs Code and the operation of most through a non-EU country. warehouses is fully computerized. The binding constraint to best-practice implementation seems to be the current capac- The use of the road transit system has declined in recent ity of customs, not that of the industry. Currently, authorized years, reflecting the weak performance of the economy but bonded warehouses are primarily used for alcoholic bever- also fierce competition from neighbors. The TIR Carnets ages for which there is an excise tax or for electronic goods. issued by the Greek guaranteeing association OFAE dropped There is no customs staff on-site at the warehouses and the sharply between 2004 and 2012 (Figure 2.9). The decrease in Customs Authority does not have the capability to connect 2007 can be explained by the accession of Bulgaria and Ro- to the electronic inventory systems of the logistics providers mania to the EU. In 2011, Greece issued less than 10,000 TIR (this is the modern practice for bonded facilities and is need- Carnets, while Turkey issued 672,000 and Bulgaria 150,000 ed to trace the movements in and out of the bonded inven- (Figure 2.10). tory). This weak capacity raises a potential fiscal risk for the Greek government. Despite easier customs procedures, rail transit is not as widely used as road. Transiting goods by rail faces different Road and Rail Transit Transit—the carrying of goods across a country—s im- Figure 2.9: TIR Carnets dropped drastically portant for Greece’s logistics. The costs of Greek exports in Greece and imports by land are dependent on transit through non- EU countries; more specifically through the Balkans (Serbia, 45,000 Former Yugoslavian Republic of Macedonia) for merchan- 40,000 dise directed to European countries, and through Turkey 35,000 for trade with Central Asia. Moreover, Greece is a transit 30,000 country itself, primarily for Turkish trade. Transport transit TIR Carnets is done by road or by rail. 25,000 20,000 Road transport transit rights are regulated bilaterally 15,000 through agreements, based on which Greece exchanges 10,000 annually a number of truckers’ permits with each of the 5,000 countries concerned. The use of the permits is balanced, with the exception of Turkey where Turkish truckers use the 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 whole quota (35,000 transit permits) and ask for additional permits while Greek truckers use an insignificant number of permits for transit through Turkey. Source: OFAE 36 | Greek Logistics ▶▶ The Community Transit System is computerized, with Figure 2.10: TIR Carnets in Greece and its neighbors the exception of the connection between customs and the authorized consignees/consignors; 800,000 ▶▶ The immediate and prompt access to data seems to be difficult, even within customs: for example, to obtain sta- 700,000 tistics on the number of NCTS and TIR operations, or 600,000 the number of authorized consignees/consignors existing TIR Carnets, 2011 500,000 in Greece, a customs staff needs to make a demand to the specialized IT services; 400,000 ▶▶ Customs is the main border agency and conducts con- 300,000 trols on Greek and foreign haulers on a risk-analysis 200,000 basis. However, scope for improving the compliance of 100,000 foreign transit operators to Greek and EU law seem to remain; and 0 Turkey Bulgaria FYROM Greece ▶▶ The “right of functioning of customs operations” (DETE) is perceived on every customs operation, and is calculat- Source: OFAE. ed based on the value of goods. These fees should nor- mally be based on actual processing costs. The fact that they are based on value in Greece violates WTO princi- challenges than by road. Rail is a much more secure mode of ples. A working group has been set up by the Greek gov- transportation from the perspective of customs control. Rail ernment to look into the existing legal framework and its transit has simplified procedures, defined in two major inter- implementation and undertake a review of imposition, national agreements covering Western and Eastern Europe. calculation, and payment of such fees and ensure that Several operators have been trying to operate scheduled they are in line with the services provided by customs of- block trains to/from Austria or the Czech Republic from/to ficials and respond to traders’ needs and other Member Thessaloniki, through the Balkans. Such services require a States’ good practices. series of agreements between the railways on the route. Procedures at the border appear to slow transit traffic. Other challenges affecting supply- Given that rail transit does not require Customs Authority chain operations guarantees for transit, the procedures at the borders can be greatly expedited and take about 30 minutes. Yet there are Trade facilitation is also affected by other cross-cutting issues delays in some areas. Veterinary controls at the Serbian and that hurt supply chain efficiency, including the following: Former Yugoslavian Republic of Macedonia borders may cause delays of up to two hours, and there is the risk of wag- Compulsory documentation of inventory management ons being blocked at the border. Moreover, control for illegal and goods movement along supply chains. Supply-chain immigrants creates delays. operations require the filing of tax documents to track the movement of merchandise in inventory. This procedure was Simplified procedures, including risk management, are designed to fight tax evasion. In Greece, however, the private possible in transit. This area is under the control of the sector complains that the modalities for this documentary Customs Authority, which has a role of ensuring the balance requirement are a major source of complexity in operating between facilitating trade and securing the state’s revenues. supply chains. There is no equivalent in EU countries. Additional areas that require improvements include: One documentary requirement has complicated deliv- ▶▶ The simplified procedures foreseen in the Community eries and hurt small companies more than large compa- Customs Code (authorized consignees, authorized eco- nies. Paper documents called “compulsory delivery notes,” nomic operators) are used to a limited extent, with no ex- which carry unique fiscal identification numbers, are used pression of interest by economic rail and road operators for (i) movement of goods from one site to another in the so far for simplified community transit arrangements same company; and (ii) sale of goods to another company procedures; (or transfer to another legal entity within the same compa- A Detailed Review of the Greek Logistics Setting | 37 ny), irrespective of movement or not. Until late 2013, the pa- Certification and supply-chain training. Improving train- per document must be signed by the receiving parties. Both ing and quality are indispensable to attract demand and make the shipper and the consignee are required to keep the paper international shippers confident that they can use Greece as document for ten years. The objective is to be able to trace a logistics hub. Although companies should have no diffi- and reconcile transactions in case of tax inspection of one or culty hiring staff given the current unemployment rate in the other party to the transaction. Large companies have spe- Greece, the lack of training and education in logistics-related cial printing machines that generate the documents—with occupations remains an issue for which technical assistance unique IDs—and transmit them to the tax administration. from EU countries can be useful. Some associations provide The compulsory delivery note format, however, contains in- courses to those already working, but the supply and scope complete information on the goods, and therefore must be of this training is insufficient. On the job training should be complemented by a commercial delivery order. One addi- strengthened, especially for technical staff, as current train- tional problem is that the compulsory delivery notes include ings are reportedly not enough and lack proper sensitization a date- and time-stamp. If a delivery is stopped in a road-side to quality or safety. Technical standards of staff in Greece are check, for example, authorities may not accept a document below those in the Western EU countries in areas such as with an earlier date (this is to prevent delivery notes from be- pallet consolidation, movements in warehouse, and ware- ing used twice). So documents issued one evening may not house management. be accepted the next morning. This means that the proce- dure hinders physical movement of goods and logistics per- Higher-level education in logistics or supply-chain man- formance. In late 2013, the Greek government allowed for an agement is not developed in a unified manner. There are electronic version of the delivery note by introducing a soft- two university departments for undergraduate programs: ware able to generate unique identifier numbers. This mea- teikoz18 and teithe19 and several postgraduate courses. How- sure is expected to lift the challenge lamented by operators. ever, logistics or supply chain management are offered as part of other business and technical subjects. The only nota- Compulsory insurance. Greece has a unique legal provision ble exception is the availability of education in shipping and that makes insurance of goods compulsory for the shipper related subjects; this is understandable given the prowess of hiring commercial transport services. This provision is a Greek shipping worldwide. source of cost and complexity, has no economic grounding, and is not in line with EU practices. Moreover, it discourages the outsourcing of logistics. This provision can be stream- lined and included in broader insurance policies. Enforcement of EU regulation on fruit packaging. This is an important EU regulation from a food safety standpoint, but it is not well-enforced in Greece. According to Greek ex- porters of packaged fruit, unregulated export of Greek fruits is widespread. For example, out of about 230,000 tons of an- nual exports of watermelons, 100,000 tons are exported by unregistered traders; and out of the remaining 130,000 tons, about 70,000 tons are exported without EU-compliant pack- aging. Such unregulated trade departs from various roadside locations, such as gas stations. Greek exporters of packaged fruit estimate that legal trade worth 30–40 million euros—or about 60 percent of total sales of fruit—is lost due to the lack of enforcement of this regulation. 18 http://logistics.grevena.teikoz.gr. 19 http://www.logistics.teithe.gr. CHAPTER 3: Recommendations and Conclusions T o realize its objective of becoming a gateway for to enhance the EU transport corridor connecting Greece to Europe, Greece may want to consider undertaking Central Europe through the Balkans (Corridor X). a number of reforms to its transport, logistics and other trade-related sectors. It will need to take measures Changes to other sectors are necessary to push Greece’s lo- that facilitate investment and also make changes to regula- gistics industries to mature. Some factors holding back the tions and systems to encourage the modernization of sec- modernization of the logistics industry are directly related to tors that are vital to both the health of the country’s business the design and implementation of government regulations. environment and also firms’ ability to survive in the face of In particular, licensing issues and regulations surrounding competition within the region. There is not one single, ma- the construction and fire-protection of warehouses should jor reform that will enhance the competitiveness of logistics be simplified. The steps required for becoming a third-party in Greece. Rather, improving the performance of the sector logistics provider, also, should be simplified and clarified. In will require a continued and coordinated effort to enact mi- addition, the government should take more steps to support cro-interventions to address the many small distortions that the provision of appropriate services to providers of logistics combine to create great uncertainty, raise information costs services, such as allowing the construction of roads appro- for new entrants and ultimately deter investors. priate for industrial traffic and working with business-own- ers to find appropriate solutions for waste disposal. Certain sectors can be regarded as transformational in the Greek economy. Among those are the trucking, railway In designing regulatory reforms, the government may and port industries. These areas, if guided correctly, have the want to consider targeting medium- to long-term market potential to give a big boost to business viability and invest- demand and build a reputation for high-quality service ment in the country. While a concerted effort to reform the and reliability. Clearly the comparative advantage of Greece trucking industry has been moderated by significant political should lie in delivering quality services: the country cannot hurdles, these efforts should continue at whatever pace is fea- compete with the cost-advantageous emerging countries or sible. Though access to trucking permits has been liberalized, with the technological juggernauts of Northern Europe. For the cost of joining the industry is still too high. This condition this reason, the priority may be given to those reforms that holds back true competition and innovation in the sector. push operators to apply best practices and deliver superior services. Dubai and Shanghai, which in a few decades ac- The connection between the railway and the Piraeus con- quired a global reputation as important centers for logistics, tainer terminal is key and will allow growth of freight represent role-models in this sense. transport. This will happen by strengthening opportunities for commerce between Greece and Europe, as well as tran- The rest of this section addresses these issues in more detail, sit traffic across the country. The speed of development in offering specific proposals to overcome hurdles in Greece’s that area may hinge on the market reaction to new business logistics environment. The proposals were discussed with ventures, such as the recent agreement to transport Hewl- the Greek Logistics Permanent Committee and a wide range ett-Packard freight. To ensure that these private sector ini- of stakeholders in Greece, although the sole responsibility for tiatives are successful, planned investments should continue the proposals rests with the World Bank. This does not imply apace, such as the construction of a second, parallel line to that the Greek government, the Logistics Permanent Com- increase the capacity for freight traffic, the full electrification mittee, or the private sector in Greece share the views pre- of the main train line, the privatization of TRAINOSE, the sented in this report. The proposed actions are designed to state-owned rail operator, and infrastructural investment help the government move forward with strategic improve- 40 | Greek Logistics ments. The section is organized along the following lines. It started working with a group of stakeholders. This group suggests that the government, in close collaboration with the is representative of the industry to analyze a wide range of private sector, take steps to: issues relevant to improving the logistics environment. The World Bank supported the initiative offering analytical and 1. Look at the big picture: Develop concrete logistics prior- process advice. Appendix 1 describes the details of the initia- ities, set in place a mechanism for sustaining the policy tive, also providing an overview of the main roles of the Min- action over time with coherence and flexibility, simplify istry, the private sector stakeholders, and the World Bank in procedures, improve coordination between agencies and the process established. communication with the public, promote professional- ism in the sector, and enforce regulations in a systematic The recently-formed Logistics Permanent Committee and predictable manner to minimize costs and delays. (LPC) that started its works in February 2013 has active- 2. Invest strategically: Ensure that logistics infrastructure ly involved individual, large players in the sector, in ad- does more to connect Greece to Europe through the most dition to association representation. The objective of this cost-efficient routes, and place emphasis on the rail and approach is to identify pragmatic solutions that make sense port sectors. from a business point of view, to allow the different views to 3. Target medium- to long-term market demand and build be represented in the discussions in a transparent and bal- a reputation for high-quality service and reliability: Sup- anced manner and to avoid capture of the reform process port the modernization of logistics service providers, pro- by operators who may have thrived under old, inefficient mote the phasing-out or the reconversion of low-quality systems. To this end, the committee—which was charged informal clusters into well-developed logistics parks, with outlining a national logistics strategy for Greece—has enact regulations that simplify licensing, encourage in- embarked on a serious work program consisting of parallel vestment in logistics and the use of outsourced logistics sub-programs of reforms, with strong ownership from the services, align legislation on the safety and security of es- private sector and other stakeholders (see Appendix 1 for a tablishments with best European practices, clarify scope, brief summary of the LPC’s initiatives to date). taxation, and conditions of operation of logistics services and required qualifications, and make the Greek logistics Ultimately, the Logistics Permanent Committee (LPC) industry more competitive and sophisticated overall. should be institutionalized. As reforms take time and new challenges will arise the LPC should survive governments ▶▶ Facilitate international trade: continue to streamline cus- and become a genuine consultative mechanism that allows toms and fiscal procedures. the Ministry of Development and Competitiveness, the Min- istry of Infrastructure, Transport and Networks—and the Overcoming institutional hurdles government as a whole—to effectively consult with the pri- vate sector on improvements to the logistics environment. It Prepare a National Logistics Strategy and should represent all views and avoid being captured by firm institutionalize the private-public sector, or group specific interests. results oriented dialogue Designing an effective and viable strategy requires that Improving logistics performance requires sustained at- the strategy itself links legislative measures, implemen- tention. It involves actions that cut across many policy ar- tation, and enforcement. It should anchor stakeholders’ vi- eas, and will take time to implement. An effective approach sions (both government and private sector), improve coher- would best include a stable process for stakeholder dialogue ence, and provide greater certainty to the private sector. Most that will survive across governments. At the same time, the importantly, it should be pragmatic. It should not be a phi- process would best grant flexibility, including in the selection losophy; it should be inclusive, attentive to business needs; of priority topics and in the selection of the market players and have a plan of action with clear, concrete priorities and involved in the discussions and other preparations. proposed actions. To make the strategy effective, it should include the following key participants and principles: The Ministry of Development, Competitiveness, Infra- ▶▶ Represented in the dialogue should be government min- structure, Transport and Networks (currently split in istries—mainly the ministries of development, transport, Ministry of Development and Competitiveness and the shipping and finance—as well as key market players. As- Ministry of Infrastructure, Transport and Networks) has sociations and sub-national public entities should be in- Recommendations and Conclusions | 41 Figure 3.1: Examples of issues at operational, tactical and strategic levels in Greece logistics environment Day-to-day / Operational Quarterly/Annual / Tactical Multi-year / Strategic Existing regulations Enhance investment in logistics by streamlining and improving existing regulation. Demand: Logistics Dominance of in-house logistics: Facilitating logistics operations users drivers, costs, service level. environment. Supply: Logistics Cost drivers: imbalanced and Improvement of service quality; Availability of land with access to providers thin flows; poor security; cross- professionalization of the logistics infrastructure vs. cost; reconversion docking; tolls; inefficient public activity, incentives to use 3PLs. of informal logistics establishments, services, strikes, etc. clusters. Services by public Access to and level of Municipal service vs. fees for Customs modernization Trade authorities and infrastructure; logistics facilities. Facilitation Roadmap complementary other issues Permit issuance; measures, Efficiency of public services. Customs clearance. volved, but their representation should be balanced and logistics strategies or master plans to help guide and align limited to issues relevant to their function. public sector policy-making and private sector initiatives to ▶▶ The strategy should acknowledge and reflect regional improve the logistics operational environment and the com- specificities. petitiveness of countries. Box A2.2 in Appendix 2, provides the references to a number of national strategies or master ▶▶ It should clearly define an agenda and timeline for imple- plans. mentation, with milestones and topics decided upfront. ▶▶ It should build on case studies identified by private-pub- Simplify procedures lic sector working groups. ▶▶ It should be developed through a bottom-up approach, Reducing complexity and uncertainty of the legal and imple- with assessments based on coordination with other on- mentation framework is essential to reducing the excessive going efforts of reform, such as the wider efforts of im- fixed costs firms face because of the difficulty in acquiring in- proving licensing regimes, the reform of key economic formation and in dealing with bureaucracy. Introducing clarity sectors (e.g., retail), of the Trade Facilitation Strategy cur- (e.g., by providing public access to exhaustive and transparent rently being developed and implemented by the Ministry checklists of procedures and certificates needed for each spe- of Development and Competitiveness and the Ministry cific activity) is perceived by the private sector as an important of Finance, respectively. It should distinguish between remedial measure. A three-step approach, used in the current operational, tactical, and strategic effects (See Figure 3.1). work, can achieve improvements in this area: Step 1: Mapping of processes and procedures with a view to The Greek Government should produce a strategy or a identify competencies, duplications, obsolescence and gaps. master plan as soon as possible, so to anchor all other ini- The mapping exercise can be undertaken using a bottom-up tiatives by the Greek state and any other stakeholders to approach through specific case studies which focus on iden- it. To facilitate this process, Appendix 2 provides some sug- tifying key problems likely to have a strong impact on supply gestions on scope, structure, and issues that the Government chain efficiency. This exercise will map the competencies of may want to consider including in the strategy master plan. specific government agencies and departments within the con- cerned ministries as well as processes and procedures required National logistics strategies or master plans from other in each case. Examples include opening a warehouse, obtain- countries provide useful examples for Greece. A number ing a trucking license, inventory management, and transport of countries have prepared—or are preparing—national enforcement regulations See Appendix 3, Table A3.1 for an ex- 42 | Greek Logistics ample of mapping carried out by a working group focusing on Improve the coordination between key transport enforcement regulations under the coordination of agencies the Ministry of Infrastructure, Transport and Networks. Instituting a central point in one of the competent min- Step 2: Lists of procedures and documents required, and istries for the coordination of the logistics regulatory en- decisions on simplification and rationalization. Following vironment would be helpful. Logistics as an industry cuts the mapping exercise, exhaustive lists of procedures to fol- across many areas, with the result that regulatory compe- low and documents to produce should be created. The ex- tences affecting the sector are scattered across many minis- amples provided in Chapter 2, Box 2.4 and Box 2.5 may be tries and agencies, at the central, regional and local level of of guidance. Following the creation of such lists, proposals the public administration. A central point of coordination, for simplification and rationalization should be formulated. properly staffed, may therefore be useful to address the needs The direct involvement of the private sector in this exercise of the sector in a timely manner and to take a broad view is important to identify the benefits of specific simplification to addressing overlaps in responsibilities within the govern- proposals. Tapping into the major regulatory reform effort ment and between different levels of government. This will that is being undertaken in Greece, best practices should be help in regulatory coordination and harmonization. imported from other areas of Greek legislation. For exam- ple, the legislation on industrial activities and business parks Mapping who is doing what between ministries, within the (Law 3982/2011) calls for leaner procedures for the approval ministry, between central, regional and local governments of investments, land acquisition and coverage, the manage- for each logistics services segment will also be beneficial ment company and use of the shoreline that could be used in other ways. The mapping exercise will reduce duplica- to improve the current legislation for “freight villages.” Sim- tions and gaps; improve the assignment of regulations to the ilarly, the simplifications and innovations in licensing for in- agencies most competent in the specific area; facilitate coor- dustrial warehouses (also in Law 3982/2011), which envisage dination and information flow within the Ministry, between fast-track procedures based on declarations of compliance ministries, and between the central and local governments; and could be exported to the warehousing licensing regime and simplify the process of legislation and implementation of for 3PLs, regulated under Presidential Decree 79/2004. See policy-making for the logistics sector over the medium term. also Chapter 3 (Logistics industry) for a further elaboration The government may want to also consider promoting more of these proposals. accountability and coordination within the central govern- ment in developing policy, and between the central and local Step 3: Communication to the public. The final step is in- governments in enforcing the adopted policies. tended to serve as a service of information to the private sec- tor. Guides on “how to do” specific activities,20 simple guide- Share data. Completing administrative reform and e-gov- lines on paperwork required, legislation on environmental ernment initiatives will help in the coordination between issues,21 risks, persons, or authorities to contact, etc. should agencies and levels of government. One example of this be produced and made publicly available. would be to create a centralized database for trucks and other logistics activities. This would best be combined with Such an exercise will (i) reduce uncertainty and allow busi- capacity-building initiatives that train public sector officials nesses to organize their logistics activities in the most efficient and enforcers, as well as the formulation of best practices for way given their needs, focusing on their core business rather the supply chain, environmental, and safety policies. All of than on bureaucracy; (ii) help a smoother transition to better these training efforts and modernization initiatives within business practices during a difficult phase of policy making in the public sector can play an important role towards better Greece; (iii) facilitate and guide the simplification of the leg- coordination. islation and implementation process for the sector, which al- lows better identification of coordination needs and design of properly functioning information flows within the Ministry 20 This type of guideline already exists in other areas and thanks of Development and Competitiveness, between Ministries, to other initiatives that are being developed, such as the Trade and between central government and local authorities (re- Facilitation Strategy, e.g. “How to do export.” gional authorities, municipalities); and (iv) provide a useful 21 As pointed out by the Government, this issue may be part of a more horizontal topic, to be covered as environmental licensing under a tool to document and communicate reforms and improve- separate “investment licensing” project. Such project is currently still ment of the business environment for the logistics sector. in its conception phase. Recommendations and Conclusions | 43 Examples of problems in enforcement and coordination of hazardous events. It also weakens the already small com- mercial sector in Greece faced with unauthorized competi- Some examples of key problems in enforcement and coordi- tion by foreign registered operators and own account Greek nation, and possible remedies, follow: companies. Example 1: Further simplification of environmental autho- The objective is therefore to implement stronger and more rization and licensing for warehouse construction efficient enforcement of national (EU) rules and of interna- tional/bilateral agreements (e.g., in trucking: Turkish truck- While a one-stop-shop and simplified procedures for ers and tachograph, triangular operations, cabotage). environmental licensing has been recently created (Law 4014/2011), there is ample scope for further simplifying The design of such measures is an ongoing effort by the Min- the process of licensing for warehouse construction. A istry of Infrastructure, Transport and Networks (as of July combined ministerial decision or a decree could do one of 2013). The most desirable outcome will be a ministerial de- the following: cision or a law that targets the following, which would be 1. Extend the use of “declarations of compliance,” which are improvements to the current system. In particular: already used in the new licensing procedures under Law 1. Improve simplification, transparency, and dissemination 3989/2011 to all the cases where the presumed environ- of current regulations defining the roadside control for mental impact is limited. freight transport. 2. For establishments of low or moderate environmental 2. Improve professional skills of control staff. impact, run inspections and audits after the firm has be- 3. Improve the collection of fines. come operational, as it already happens for fire regula- tions inspections. 4. Coordinate enforcers and information-sharing. 3. Ensure consistency with other steps of the process and The ongoing initiative of the Ministry of Infrastructure, their environmental requirements (e.g., with local build- Transport and Networks to draft a new framework law is ing permit systems). a welcome first step. The objective of the law is to simplify 4. Identify procedures at regional authority level that can be and make more transparent the current regulations defining joined with the environmental procedure (e.g., installa- roadside control for freight while also eliminating coun- tion of generators). terproductive specificities in the major laws regulating this 5. Identify other steps of the licensing process that can be activity. unified (e.g., eliminating duplications in process for es- tablishment license and pre-permits and environmental In addition, a collaborative agenda between enforcing permits). agencies is needed to achieve the objectives listed at points 2-4 above. Collaboration, sharing resources, and coordina- These measures: tion on the strategy, as well as some modifications to the legal ▶▶ Will not eliminate procedures or authorizations, which frame are necessary to bring about the necessary investment are necessary, but they will simplify the process of licens- in ICT, under the financial and human resources constrained ing, by eliminating duplications and delays. environment that Greece is facing (e.g., an effective enforce- ment grid with shared sensors and information network), to ▶▶ May be piloted in two to three regional authorities with improve the capacity of individual enforcement officers, and more activity (e.g., Attiki, Thessaloniki, Veotia). to be able to better target non-compliant users. Example 2: Enforcement of trucking regulations: road side checks Develop a monitoring and evaluation framework for greater transparency Weakness in enforcement has important consequences for the positive evolution of the transport sector towards Data is critical to informing the logistics sector reform the standards of efficiency of other European countries. It and to track its performance. It helps to better identify pri- encourages low compliance with technical and driving regu- ority needs and to monitor progress. It will help promote lations, thereby reducing road safety and increasing the risk Greek logistics efficiency and Greece’s potential as a regional 44 | Greek Logistics gateway with international investors. In Greece, the lack of The following general principles are recommended: consistent and comprehensive data is a problem. Data on lo- ▶▶ A better coordination and enhanced collaboration between gistics services provision is scarce, scattered around different ELSTAT and the Ministries of Transport and of Shipping; public and private entities, and insufficient for informed pol- icy making (some volume data exists but there is virtually no ▶▶ Involvement of a pool of academics and research insti- data on supply chain performance). Not only is availability tutes in the monitoring and evaluation framework; poor, but data is also plagued by little aggregation and analy- ▶▶ Set up of permanent “observatory,” possibly based in one sis. Finally, where available, data is underutilized, as there is of the relevant ministries, to compile data and guide re- no clear understanding of the usefulness of indicators. forms with evidence-based analysis; and ▶▶ Open data policy (i.e. consolidation of data in one loca- The current state of transport statistics in Greece is tion publicly accessible to stakeholders). sub-standard. Data collection mainly covers stocks, while flows (cargo volumes, jobs in the transport sector, direc- Collaboration on data collection in Greece should be tion of flows, breakdown by modes of transport) are large- aligned to international standards. The range of actors ly not recorded. The implementation of a new law (Law concerned in the collection and provision of transport data 3232/2010) and its amendments in 2012 are underway, es- is summarized in Figure 3.2. It is a general presentation of tablishing a framework for the Greek statistical system as the relationships between these actors. This type of arrange- comprising ELSTAT, the various ministries and the Nation- ment should be established also in Greece in order to pro- al Bank of Greece. In this framework, a Memorandum of vide relevant statistics. This would also enable monitoring of Understanding has been signed between ELSTAT and the the progress of achieving the goals of the National Logistics Ministry of Infrastructure, Transport and Networks and Strategy/Master Plan that under preparation. between ELSTAT and the Ministry of Shipping. Yet, the cooperation is currently exclusively at the technical level. Defining the most effective Key Performance Indicators With the Ministry of Infrastructure, Transport and Net- (KPIs) that need to be monitored is also necessary, and works it is limited to the exchange of data on vehicle reg- useful to support a National Logistics Strategy. The most istration. As a result, apart from vehicle registration data, cost-effective KPIs and the means of collecting and using existing transport statistics available on the website of EL- them will need to be determined. Although data needed to STAT are updated to 2008 only. Some longer data series are support this type of work is patchy and related time-series available upon request, but are not published on the website sporadic, there are several potentially available Key Perfor- due to shortage of personnel. mance Indicators (KPIs) used in other countries as well as in Greece. Some suggestions on the type and scope of such Overall, there is the need for a major overhaul of the cov- KPIs are presented in Figure 3.3: erage and scope of transport sector statistics. This need is also stated by ELSTAT and by international bodies, such as Finally, regular survey-based studies on logistics would the International Transport Forum (ITF/OECD). be needed to monitor the evolution of Greek logistics per- formance in a timely manner. This is particularly necessary Compiling existing material and doing more surveys in in the short term. In the total absence of satisfactory hard areas where it may be needed, such as trucking, will be statistical data, surveys will allow monitoring of the develop- necessary. Data that need to be centralized include: ments in the sector and will provide an overview of the busi- ▶▶ Statistical data; ness sentiment. As no ready-made templates exist in Greece, ▶▶ Survey data on market and performance; the World Bank is preparing such a survey (Fall 2013). It is ▶▶ Supply Chain Key Performance Indicators (KPIs); and strongly advised to re-run the survey at regular intervals of two years, at the initiative of the public sector. ▶▶ Data collected by different ministries, subordinate agen- cies, ELSTAT, and independent initiatives of private enti- ties or academic institutions. Develop a consistent and coherent training and certification system Short notes on how to use data for specific purposes will also be useful (i.e. how to use data for impact assessments, The availability of well trained personnel is a necessary for identifying policy solutions, etc.). condition to advance the level of the services offered by Recommendations and Conclusions | 45 Figure 3.2: Example of transport data collection UN EUROSTAT OECD/ITF EC/EU OTHER Other line Ministries National statistical o ce MoT (MoD) or equivalent (e.g. Shipping) Other relevant agencies Transport Transport Other Transport-related agencies (e.g. Environmental, Agency safety agency Occupational health, Customs, Border Guard). Modal/regional administration(s) Transport and logistics providers, transport users Main direction of data collection Supplementary direction of data collection logistics service providers. Certification in logistics and A master-plan could help guiding the needs and devel- transport jobs may have an important role in the job mar- opment of skills in the logistic profession, as well as the kets, and can help improve training and quality of logistics boundaries between what type of training and certifica- at the execution level. The objective is not to create a closed tion should be managed publicly and what should be left profession, but to help Greek 3PLs to benefit from a system to the private sector. There are many types of certification that allows to form professionals with the skills needed in that can be provided in logistics and transport (Figure 3.4). the sector and thereby to meet the best quality standards so Currently in Greece, vocational and higher education de- as to attract international manufacturers and distributors grees involve institutions that in Greece are almost exclu- willing to use Greece as a European/Mediterranean logis- sively public (universities, colleges, institutes). Nevertheless, tics hub. besides higher and vocational education, a competitive logis- tics sector also needs high quality vocational training. This This area is quite developed in other EU countries and should normally involve private sector entities (e.g., profes- Greece can look to its neighbors for examples and techni- sional providers of courses, continued education, and other cal assistance. Although there are no defined EU standards, forms of training) as they have the most up to date know- the principles are essentially the same for all the main con- how of what is required in the market. Figure 1 exemplifies tinental European countries. As in those cases, Greece can the range of certification schemes used in the logistics and have professional bodies agree with unions on job definitions transport sector (not specific to Greece). (e.g., forklift operator, warehouse managers) and standards. The public sector can implement training in partnership In order to account for all training and certification needs with the professional bodies. Greece can easily move in the in the logistics profession, the Master-Plan should cover same direction as its neighbors in organizing certification all four key aspects highlighted in figure 3.4: (i) vocation- and training without developing a sophisticated taxonomy al training; (ii) higher education curricula for the logistics of job categories (France has 180 categories). sector; (iii) voluntary schemes of certification, including for 46 | Greek Logistics Figure 3.3: A Suggested Framework to Help Define Useful KPIs Possible levels and objects of observations, with selected sources of international data Int’l KPIs Public Sector Logistics Logistics users Other Providers Supple chain FDI, WEF, Taxation, access to Market Structure & Location choice, Environmental, social and management OECD markets Consolidation outsourcing safety issues Supple chain management LPI Regulatory Service level Demand; Own Availability of staff; work Supple chain markets Framework account/ for hire conditions Material Supple chainow markets SCM/Logistics Safety & Security Costs of service Environmental Skill needs between Material companiesow Surveys issues training, education between EUROSTAT ITF Regulatory Capacity access to Modal and route Technological Transport markets companies Framework markets choice development (incl. ITS) Transport Transport markets ows LSCI Control Performance Reliability, capacity Control skills and Transport equipment ows Tra c markets EUROSTAT ITF Supervision Access to markets Cost impact Accident statitics Infrastructure Tra c markets EUROSTAT ITF, Provision, Availability Use and need for Funding, costs; ITS UN EC policies ITS Infrastructure “Doing Business in Greece” April 2013, The World Bank. ITS = Intelligent Transport Systems. Possible units of observation Units by type Volumes; Flows Average/Unit Cost Service Quality (Economic) Efficiency Supple chain management Supply demand Supply demand Total Logistics Costs Satisfaction Value added, Supple chain balance balance (by surveys) competitiveness management Supple chain markets W/H m2 Service Monetary and Service fees, W/H Scope of available Inventory levels, ROI Material Supple chainow markets facilities information flows costs services between Material companiesow Logistics Tons, m2, TEU, units…. Landed Cost Process time of Cash-to-cash cycle between centres supply chains time, capital tied Transport markets companies Modal shares Cargo Clauses; Share Freight levels, Transport/ Productivity Transport Transport markets of Foreign Firms handling charges…. ransport Time Profitability ows Transport Vehicles Tons, m2, TEU, Units…. Vehicle and Resilience, Capacity Utilization ows Tra c markets Frequencies operational costs Responsiveness Infrastructure Tra c markets Market shares; Vehicle-km Port, airport, toll fees; Throughput times Productivity CR-rates cost and revenue Profitability Infrastructure Length Utilization Maintenance Reliability Capacity Utilization Capacity Construction Availability “Doing Business in Greece” April 2013, The World Bank. existing staff trained on the job; and (iv) mandatory certifica- 2013 also highlighted a substantial need for upgrading the tion for staff stemming from regulatory requirements. In the skill level of blue collar staff in the logistics industry, both short to medium term, Greece could develop professional in transport and warehousing jobs. This calls for the need to certifications and re-evaluations; and applied training in all survey the existing accreditation bodies available in Greece, supply-chain business processes (loading, handling, trans- and for the need to list or survey existing accredited or oth- portation, safety and environmental issues) for workers, su- erwise high quality entities in this field in Greece. pervisors, and drivers. Collaboration with the private sector is important. Many A specific need that was expressed by business operators training and development programs need to be adapted to in Greece was for identifying the most urgently needed the in-house needs of companies. A variety of initiatives be- professions in logistics. A recent SEV survey identified tween the private sector, training schools and universities tasks that are predominantly middle-management. Howev- could be envisaged. er, interviews, meetings and company visits since January Recommendations and Conclusions | 47 Figure 3.4: Skill and Training Needs Differ by Task and Whether Mandatory or Not EQF BA & MSc & PhD Examples of international Managerial Levels • Logistics/SCM certi cation national professional training providers 8 (PhD) • Transport schemes National schemes of certi cation by to 1 (basic) MBA’s in e.g. • Logistics/SCM CSCMP: SCPro Level One, etc. EJLog; ESLog; EMLog SOLE: DL; DSL; DML; CLCM International certi cations • Shipping Maritime: IMO for O cers and Crew (mainly SCTW) Continued Aviation: ICAO (air & ground sta ) education Vocational Road: CDE driver’s licence EUROPASS e.g. National certi cations • Freight forwarder Customs Broker • Warehousing ELA: Train engineer • Airport sta Type (1 to 4) (4) Mandatory (1) and (2) (3) Voluntary Safety agencies O cially Accredited Industry Other agencies Min./Board of Education self-accreditation Notes: (1)=vocational training; (2) higher education curricula; (3) voluntary schemes of accreditation; (4) mandatory certification for staff stemming from regulatory requirements. Acronyms: IMO=International Maritime Organization, SCTW= International Convention on Standards of Training, Certification and Watch-keeping for Seafarers; ICAO=International Civil Aviation Organization; CDE= Certified Driver Examination of the International Driver Examiner Certification (IDEC scheme); EQF=European Qualifications Framework; SCM=Supply Chain Management; SOLE=International Society of Logistics; ELA=European Logistics Association; CSCMP=Council of Supply Chain Management Professionals. A precondition to the development of a master plan for able EU resources, such as those from the European Social training and certification in logistics is a thorough survey Fund; and (ii) studying the possibility of incentives for locat- of existing demand and supply in Greece. Namely the sur- ing training centers within reputed logistics centers, such as vey should cover the following issues: Sindos and Thriaso. 1. Obtaining an overview of existing educational supply in public sector institutes and universities. Encourage the private sector to 2. Surveying existing training accreditation bodies available promote Greek logistics domestically in Greece. and abroad 3. Survey existing accredited or otherwise high quality training entities in transport and logistics in Greece. A clear strategy with well-defined activities for the promo- tion of Greek logistics is needed to attract logistics opera- 4. Obtaining an overview of existing private sector training tors in Greece and increase awareness of the importance of firms, including industry associations in the field. the logistics sector domestically. The activity of promotion Based on the survey the public authorities should initiate should be led by the private sector. To date SEV (The Hel- work to establish a well-functioning accreditation system lenic Association of Business) and EEL (Hellenic Logistics both in the public and in private sector and assess the fea- Association) appear to be the most suitable organizations to sibility of certifying people with extensive work experience carry out such a role, given their size and resources. How- (qualifying diploma). ever, coordination with and endorsement by the respective ministries (Ministry of Development and Competitiveness, Additional initiatives may be taken by the private sector. Ministry of Infrastructure, Transport and Networks, and the These may include: (i) using existing curriculum require- Ministry of Shipping) will help ensure coherence and the ments and certification standards from other European appropriate visibility to the initiative. Any identification of countries to create a training program with the aid of avail- access to relevant EU funds would also be of help. 48 | Greek Logistics Transport industries management systems and other IT systems; training of enforcement officers through shared e-learning facilities and sharing of training personnel (through the involve- Road transport ment of the National Training Centre for Public Gov- ernment—EKDD); sharing of equipment for roadside Greece needs to continue with regulatory reforms related checks; common closed mobile payment circuits for col- to the trucking industry. The Logistics Permanent Commit- lecting fines; etc. tee has established a dedicated project for a better enforce- ment of road-side regulations, a first measure to foster a bet- ▶▶ Second it is suggested to enhance international collab- ter business environment in the trucking sector. Chapter 3 oration, particularly with neighboring countries, both (Overcoming institutional hurdles) mentioned the ongoing EU and non-EU members. This includes building up, effort by the Ministry of Infrastructure, Transport and Net- joining or empowering existing EU-funded regional de- works to draft a new framework law to simplify and make velopment initiatives on enforcement. An example is the more transparent the current regulations defining roadside existing Greek-Bulgarian contact center in Promachonas control for freight while also eliminating counterproductive that includes the participation of the customs and police specificities in the major laws regulating this activity. authorities of the two countries and focuses on all mat- ters relating to illegal activity. Additionally, this could One major need is to improve the collection of fines and, include reproducing initiatives that have been successful at the same time, the smooth flow of compliant logistics. elsewhere (e.g., the CASH initiative on safer transport of Achieving such an objective will not only increase the good freight in the Baltic Sea). reputation of Greek logistics and facilitate the free move- ment of goods with the rest of Europe, but it will also in- Regulatory interventions in other areas are also necessary. crease traffic safety, ensure fair competition, and cause less Such reforms will help level the playing field on which Greek damage to infrastructures. Greek road transport legislation operators compete with foreign companies. While keeping is mostly compliant with EU provisions. Hence such an ob- in mind the high political sensitivity of reforms in this sector, jective mainly rests on setting in place complementary mea- some potential remedial actions include the following short sures to help implementing and enforcing regulations. Nev- and medium term measures: ertheless, some regulatory improvements are also in order. ▶▶ Simplify the process of truck licensing and change of li- For example, regulations obliging infringers to pay the fine cense (short-term measure); on the spot (rather than providing a delay of up to five days) is considered a priority measure that alone will already in- ▶▶ Simplify the process of truck change of property (short- crease dramatically the ability of Greek authorities to enforce term measure); road transport regulations. ▶▶ Simplify legislation on “commercial account,” allowing the latter to benefit from more favorable fiscal, opera- In conclusion, stakeholders in Greece, under the lead- tional, and licensing conditions, as it already happens for ership of the Ministry of Infrastructure, Transport and “own account” (short-term measure); Networks are on their way to creating a coherent medi- ▶▶ Eliminate that rule that limits registration for each tractor um-term strategy for transport enforcement. With en- to a maximum of three trailer units (short-term measure); abling measures, first improvements may be experienced ▶▶ Streamline the process of establishing a new road even in the very short term. The main priority areas for es- transport company based on the 2010 law (short-term tablishing effective enabling measures fall in two main areas: measure); ▶▶ First it is suggested to enhance the collaboration between ▶▶ Review the rules for the transport of dangerous goods enforcing agencies and in particular between Police and from the mainland to the islands (medium-term Customs and within the context of the Collaborative measure); Law Enforcement Network for Land Transport (CENT). Collaboration should be based on concrete measures, in- ▶▶ Impose a compulsory revaluation and audit of existing cluding the establishment of a shared enforcement grid; vehicles and carriers for safety and environmental pro- the creation of green corridors for trucks controlled at tection (medium-term measure); customs and measures of remote and non-invasive bor- ▶▶ Study the possibilities for providing incentives, compat- der control; the sharing of data collected by agencies; risk ible with EU principles and the MOU, to invest in envi- Recommendations and Conclusions | 49 ronment-friendly trucks that would comply with increas- get to fully liberalize rail transport in Europe, including ingly strict EU standards (short-term measure) national passenger traffic, from December 2019. The lib- ▶▶ Foster consolidation (foreseen by Law 3887/2010) to in- eralization of domestic passenger traffic represents the cul- ternational versus domestic operations (medium-term mination of a far-reaching initiative launched over a decade measure); and ago, when the first rail package opened international freight services to competition in 2003 (national freight services ▶▶ Ensure full compliance with existing EU mechanisms, for followed in 2007 and international passenger services in example on restriction of cabotage in parallel with defin- 2010). The fourth package completes the process. For now, ing and enforcing real measures for reforming the sector only the UK and Sweden have completely opened up their and with fiscal enforcement (medium-term measure). national markets and there is limited liberalization in Ger- many, Austria, the Czech Republic, Italy and the Nether- Rail transport lands. The issue of liberalization is highly politicized and the short-term implications are difficult to determine, but Greece needs to take steps to develop its rail system into a this EU-wide policy direction also affects Greece in the me- more freight-friendly and environmentally-friendly form of dium to long term. transport. This will help it integrate into the European rail network and enhance its competitiveness as a trans-ship- ment gateway for Eastern and Central Europe. Ferry shipping Coastal and short-sea shipping—mainly ferries carrying TRAINOSE should focus on attracting new business, includ- passengers, cars and trucks—is crucial to Greece and an ing pursuing agreements such as the recent contract with important part of its logistics. The government is currently Hewlett-Packard. In addition, TRAINOSE should: spending about 93–94 million euros per year in subsidies to ▶▶ Increase its reliability and commercial orientation to maintain shipping connections to the islands, and is there- freight customers. To do this, it may have to design or re- fore also looking for ways to allocate these funds and the model facilities for the loading and unloading of freight; available resources to serve the islands in the best possible and manner. ▶▶ Consult with users—especially freight users—when de- veloping or implementing investment plans. Proposals to be further assessed include: ▶▶ Liberalize freight transport between the mainland and The government should: the islands (short-term measure). ▶▶ Privatize responsibilities that can be easily separated ▶▶ Lift restrictive manning requirements, in particular those from the main operations—such as has been done for the outside the minimum routing obligations (short-term “Rolling Stock Maintenance SA”, which is expected to im- measure). prove efficiency while reducing costs; ▶▶ Optimize domestic island service in ferry shipping. ▶▶ Study the possibilities for providing incentives to encour- ▶▶ Exploring the viability of the hub-and-spoke concept age more private operations, in general, such as the run- in ferry shipping, with Piraeus as the main node (medi- ning of third-party trains; um-term measure). ▶▶ Improve the quality of maintenance by corporatizing and ▶▶ Cargo handling in small ports (medium-term measure). considering a public-private partnership (PPP) for main- tenance activities under OSE; Ports ▶▶ Accelerate plans to electrify the network, and in particu- lar the line between Athens and Thessaloniki; and Greece has the potential to serve not only Greece but the ▶▶ Prioritize the development of EU Transport corridor wider South-East European region. It should take note of the from Athens to Thessalonica and through the Balkans. successful COSCO/PCT business model in Piraeus when it considers modernizing its ports. While port services are Reforms of rail in Greece can get a boost from the EU’s traditionally an area of strength for Greece, its reputation fourth rail package. The European Commission proposed has been recently tarnished by the long-lasting and repeated its fourth railway package on January 30, 2013, with a tar- strikes in many locations across the country. 50 | Greek Logistics Measures to increase private participation in Thessaloni- 1. Define logistics in terms of the activities and interven- ki, as was done in Piraeus, would reinforce the commercial tions of various professions. credibility of the port and the likelihood of partnerships 2. State the condition of development for organized logistics with private shippers and operators. Parallel commercial- parks, as private or PPPs. Amend the current provisions ization strategies in both gateways are not exclusive but are in Law 3333/2005, to incorporate improvements and in- mutually reinforcing, as they increase the number of options novations from Law 3982/2011, covering business parks, for shipping lines, railways operators and shippers, while as suggested by the LPC and the relevant working groups. avoiding giving monopoly power to one port. 3. Streamline the regulations for the establishment and op- eration of 3PL warehousing, independent commercial Greece should take advantage of Thessaloniki’s ideal location and industrial warehouses, and multimodal transport. and of the successful recent development of Piraeus to es- tablish a two-pronged gateway strategy for access to South 4. Clarify scope, taxation, and conditions of operation of Eastern and Central Europe. It should look at opportunities logistics services and required qualifications. to involve additional major players in ports operation and 5. Link to legislation on the safety and security of shipping. Propositions to do so, including via further privat- establishments. izations, should be assessed. 6. Link with elements of the transport legislation. 7. Cancel a few existing measures that have no clear justifi- cation and are not found in most EU countries, such as: Logistics industry ▶▶ License plates for forklifts used in confined facilities. Legal and regulatory changes to enhance ▶▶ Compulsory insurance for merchandise transported in Greece (redundant with truckers liability insur- investment in modern logistics facilities ance). Reforms to modernize the logistics industry require ap- ▶▶ Separate permit for the installation of the generator. propriate design of government regulations. In particular This could be simplified or automatic when the gen- the steps to become a 3PL should be clarified; the provisions erator is included in the building permit and the envi- in Law 3333/2005, for the establishment of logistics parks, ronmental impact study. should be improved by bringing in innovations from Law 3982/2011; the licensing process for warehousing and lo- The law should establish the condition for the creation of lo- gistics facilities should be simplified and delays in licensing gistics establishments and organized logistic parks and for brought to a minimum; health and safety regulations should the exploitation of logistics services. It also should describe be updated by allowing whenever possible the operator to in- the advantages and the conditions of service provision in crease flexibility by introducing active instead of passive safe- such establishments and parks. Finally, it should determine ty measures; finally, the many smaller, un-necessary barriers the regime of the delivery of service and the role of the state, should be eliminated. All of the suggestions to improve the of the regional authorities and of the municipalities in the licensing of warehousing and logistics facilities discussed field of logistics. below should be coordinated with the broader investment licensing reform efforts currently being undertaken by the The envisioned development of logistics activities should Ministry of Development and Competitiveness. be secured by institutionalizing the model of private-pub- lic sector collaboration currently under the umbrella of To implement those changes, Greece should develop a the Logistics Permanent Committee. Established in the new framework law that encourages the modernization framework of the current Logistics Permanent Committee, a of 3PLs and favors the use of outsourced logistics over the pragmatic and effective forum for public-private partnership current tendency of many industrial and trade enterprises to is an important ingredient of a successful strategy for the de- handle these activities in-house. This law should not define velopment and growth of logistics in Greece. See Appendix 1 standards in terms of surface, height of building, or land cov- for a description of the scope of the work of the Committee. erage. Instead, the law should be a recapitulative instrument that will help define and regulate properly logistics activities. The establishment of new logistics parks should be sim- It should cover the following areas: plified. The two main areas of improvement consist of a new categorization of business parks and the requirements of ac- Recommendations and Conclusions | 51 Figure 3.5: Proposals of simplification for the establishment of organized logistics parks cess to multimodal facilities; and in improving some restric- should be eliminated. To the extent possible, procedures tive provisions in Law 3333/2005 with good practices from and parameters from various licensing regimes should be Law 3982/2011 on business. In terms of new categorizations, harmonized. we propose three categories. Logistics parks larger than 20 hectares should have direct access to multimodal facilities; Proposed simplifications concern the establishment and parks between 10 and 20 hectares should be allowed at a dis- operation phase of licensing. First, it is suggested that li- tance of maximum 50 km from multimodal facilities, and censing should transition to a fast track system based on smaller parks should not be required to have multimodal re- “declarations of compliance” and one stop for establishment quirements. Turning to the improvement of the provisions in and operations licensing for most warehousing facilities, or law 3333/2005, it is suggested to align them to the provisions in other words, for all establishments with low or medium stated in Law 3982/2011 concerning approval of investment, environmental impact (e.g., A2 and B environmental cate- management company, land acquisition and coverage, and gory). Higher environmental impact (A1) establishments use of the shoreline. These proposals, which are summarized will instead be licensed in two steps, following an inspection in figure 3.5, have been discussed with the LPC members or after provision of a letter of guarantee. Second, licensing and the relevant working groups. Their implementation is under this regime would concern all independent warehous- considered useful by stakeholder to facilitate new invest- es (3PL and own account). Warehouses that are part of a ments, once economic growth will resume. commercial or industrial activity would instead be licensed according to the main activity, and warehouses in business The flexibility existing in current legislation of establish- parks or logistics parks under the fast-track procedure al- ing warehouses under different regimes accommodates ready envisioned for establishments in business parks (Law a diverse range of warehouse uses, but ambiguities and 3982/2011). complexity should be eliminated. Streamlining the pro- cedures for licensing under different regimes (industrial, Fire and safety regulations may also be improved by pro- 3PL/freight transport, and commercial) and replicating best viding more flexibility to operators and from moving practices and innovations from the Law 3982/2011 reform of from passive to active measures of protection. Scope for the industrial sector will provide certainty, faster procedures regulatory improvements lies in two areas: (i) aligning regu- and benefit growth in the sector. Consolidating the licensing lations with more recent standards already applied in other under a single regime is not the priority. The possibility of EU countries; and (ii) introducing additional safety mea- licensing warehouses under regimes specific to their use is sures currently not applied in Greece (e.g., on storage and positive if it reflects the needs of different types of economic anti-pollution measures). The regulatory framework for actors. However, ambiguities as to the licensing regime that anti-fire measures is old dating back to 1988 (Presidential applies to specific case, different processes and duplications Decree 71). While a proposal from the technical chamber 52 | Greek Logistics Figure 3.6: Proposed simplifications of licensing for warehouses of Greece on new horizontal legislation on anti-fire require- The business sector suggested designating protected areas ments currently exists in Greece, such legislation does not for logistic zones. The proposals put forward by the business necessarily respond to some of the key needs of logistics fa- sector aim at reproducing some of the favorable conditions cilities. Few critical improvements on the current legislation of the successful example of the Sindos zone in Northern on fire regulations can instead already greatly help operators Greece and at facilitating the reconversion and requalifica- in the logistics sector. In particular, abolishing the reference tion of existing informal or semi-formal logistics clusters. in the law to the volume of fire compartment would give the The aim is also to overcome some operational problems and operators the necessary flexibility to organize warehous- taxation issues. The proposals include: characterizing logistic ing more efficiently. A clearer and enhanced legislation on zones as areas of direct economic interest, thereby bypass- active protection measures should also be introduced. The ing the local regulatory constraints; the creating of a zoning proposed changes are in line with EU standards.22 If the new category for logistics; and consolidating licensing for logistic regulation is implemented, it would ideally be automatically activities under a single regime. applicable to new facilities, but applicants enlarging or re- modeling existing facilities would be given the choice be- In addition, the national government could advise the lo- tween the old and new regimes (grand-fathering principle). cal governments in adjusting warehouse size-regulations to be better aligned with EU standards. This might help The private sector lamented high local taxes and fees. The to modernize the sector and stimulate more investment in solution for obtaining adequate services relative to fees automated warehouses and other more sophisticated ware- and taxes paid will have to come from collective action and housing activities. the establishment of an effective dialogue between the private sector and the local authorities. The national governement is not likely to be in a position to over-rule local government on these issues (except for activities located within business 22 Spelled by the EU rule 1510, which relies on different principles, is that “the capacity should depend on the means of fire extinguishing parks or freight villages). The operators of the sector may and fire protection used, as well as the type of products stored or have bargaining-power with local authorities if they present handled, regardless of whether the warehouse is single-story or their predicament in an organized manner and identify solu- multi-story. In practice, the surface of a fire-cell can be up to 6,000 m2 with automatic sprinklers, 3,000 m2 without. There are also rules tions in which each side finds value for money (e.g., promise concerning distances to property limits, firewall design (above roof ) to hire local workforce in return for key services). and emergency exits.” Recommendations and Conclusions | 53 The specific case of small, informal logistics operators in Trade Facilitation Strategy includes the implementation of a Eliaonas is complex and needs more study. A solution sug- Single Window, better risk management, creation of a trade gested by some stakeholders in Greece is to encourage compa- portal and inclusion of import-friendly measures. Other nies to relocate from Elaionas to more convenient areas. One broad issues that have been identified need to be addressed possible area is Thriasio, where there is ample empty capacity as well. Below are the priorities: in the logistics centers of OSE, the rail infrastructure manager. The separation of ownership and operation make the problem The PCT’s more efficient implementation of customs pro- difficult; the current landlords in Elaionas would have to close cedures may best be integrated into the National Trade their facilities once the tenant companies move. The other Facilitation Strategy. In a sense, PCT operates an embry- extreme—legalization of informal businesses—would be not onic single window, which could benefit from and should be advisable either. The Logistics Permanent Committee and its taken into account for single window project (delivery 2015) working groups are investigating the pre-conditions and in- of the Trade Facilitation Strategy. centives for an efficient solution of the Elaionas exception. Border controls by various agencies need to be stream- Reduce deviations from mainstream EU lined, especially those for phyto-sanitary controls. This might require a continued presence of these agencies in the practices in supply chain management terminal to avoid delays. Streamlining those controls with- in the customs clearance is a high priority in the National Identifying which deviations are the most binding con- Strategy. straints in supply chain management should be the focus of one of the work-streams of the National Logistics Commit- Physical inspection for non-EU imports could be reduced tee. However, the government may want to consider the fol- and rely more on effective risk management. The National lowing three measures in the short term: Strategy prioritizes risk management to rationalize the in- ▶▶ Streamline or suppress mandatory declaration of move- spection practices. ments of merchandise in warehouses; ▶▶ Implementation of the mandatory EU regulation on fruit Hours of operation could be expanded, following the packaging; and assessment of the pilot initiatives in Piraeus and Athens ▶▶ Suppress compulsory insurance for merchandise trans- International Airport. There is a rationale for expanding ported in Greece. customs’ hours of operation, including on weekend, espe- cially for activities such as port gate or border activities that otherwise can block the movement of vehicles. The problem International trade and transit issues of extended hours for processing activities will become less relevant with the implementation of full automation and Reforms in trade facilitation and transit measures would best streamlined risk management that is planned in the National focus on facilitating supply chain management and reducing Trade Facilitation Strategy. It may not be justified to operate deviations from mainstream practices applied in other EU offices 24 hours a day, seven days a week, because it is unlike- countries. A close link needs to be established between the ly that there is sufficient demand. Given apparent personnel three broad initiatives of the Greek Government in the area constraints in customs, those questions go beyond the cur- of international trade and transport: the National Logistics rent scope of work and should be part of a broader customs Strategy, the Trade Facilitation Strategy, and the customs modernization strategy. modernization program. Some reforms are already part of the Trade Facilitation Strategy under MOF but are important The new law on customs brokers could be further com- components of a comprehensive National Logistics Strategy. municated, and if needed clarified. This will allow traders to handle customs procedures directly by developing their Suggested improvements relating to knowledge and confidence in handling the system and a customs issues smoother transition into electronic declarations as required by the EU customs standards. Coordinate with the Trade Facilitation Strategy and the customs modernization program under the MOF to en- Special regimes need to be well-utilized. The promotion of sure synergies and avoid confusion and duplication. The such regimes and the capacity of customs could be useful- 54 | Greek Logistics ly strengthened. Training of custom personnel to certify the Promote the use of EU customs procedure no. 42 for the operators who can benefit from the simplified regimes could management of VAT for transit trade. The private sector where needed. laments the Greek management of VAT collection for goods in transit to other EU destinations. Enhancing the use of The bonded warehouse regime needs to be improved special regime 42, granting VAT exemption for goods on (medium term measure). The current bonded warehouse “immediate dispatch-intra-community delivery” to another system is not satisfactory, neither from the perspective of Member State and leaving payment of VAT to the destina- implementation of the EU customs code, nor from a fiscal tion Member State, would allow Greece to compete effective- standpoint. Customs should implement an IT interface to be ly with the Netherlands. able to monitor bonded inventory in an effective and non-in- trusive way by accessing the inventory management system of the operators. References Anderson J. and E. Van Wincoop. “Trade Costs”, Journal of Economic Literature 2004. Arvis J-F., Duval Y., Utoktham C., and Shepherd B. “Trade Cost in the Developing World”, Policy Research Paper WPS6309, The World Bank 2013. Arvis J-F, Mustra M.A, Ojala L., Shepherd B., Saslavsky D. “Connecting To Compete: Trade Logistics in the Global Economy”, The World Bank 2012. European Commission (2013). “The Second Adjustment Programme for Greece—Second Review”, European Economy Occasional Papers 148 (May 2013). Siamas I., Iakovou E. & Vlachos D. “Strategic Mapping of a National Logistics & Supply Chain System: The Case of Greece, Laboratory of Quantitative Analysis”, Aristotle University of Thessaloniki 2012. Task Force For Greece Mission Report, “Facilitating Exports Procedures in Greece”, Second Quarterly Report (March), European Commission 2012. UNCTAD, “Review of Maritime Transport”, United Nations 2012. WEF, “Enabling Trade Valuing Growth Opportunities”, Geneva, World Economic Forum 2013. Appendix 1: The Logistics Permanent Committee: scope of the work and collaboration with the World Bank The Logistics Permanent Committee of the main roles of the Government (i.e. Ministry of Devel- opment and Competitiveness and Ministry of Infrastructure, Fostering a friendly business environment for the logistics Transport and Networks), the private sector stakeholders, sector is a complex task, with many technical components, and the World Bank in the process established. This is not a different levels of government involved, and legislative pow- new approach; nearby Turkey, Ireland, Sweden, Finland, and er under the responsibility of different and—sometimes—in- Germany are good examples of countries that forged suc- dependent bodies. Ultimately, it will require legal and insti- cessful logistics-improvement strategies through consultative tutional changes that will affect people with a diverse range processes with strong participation of the private sector. of interests—from business-owners to consumers to public sector employees. Its design and implementation requires The current approach has taken into account lessons learned a well-considered, government-led strategy, informed by in two previous attempts by the Greek government to form stakeholders in both the public and private sectors. It also National Logistics Committees that did not lead to reforms needs to strike a difficult balance between continuity and co- herence and flexibility. Figure A1.1: Main roles of the Ministry, private With the aim of designing an effective and viable strategy, the sector and The World Bank in the Ministry of Development, Competitiveness, Infrastructure, logistics strategy work Transport and Networks (currently split in the Ministry of Development and Competitiveness and the Ministry of In- Analysis & frastructure, Transport and Networks) has been working with Policy check & Business & Advice Process Implementation Reality check check a group of stakeholders who are representative of the indus- try to analyze a wide range of issues relevant to improving Private Sector the logistics environment. In order to create an appropriate MoD and MoIT & Stakeholders The World Bank forum for the discussions the Minister of Development has established a Logistics Permanent Committee (LPC). First Need for a feasible Voice through Provides analytical convened on March 19, 2013, the Logistics Permanent Com- Strategy & Action the LPC and process mittee had met eleven times by the end of September. The Plan on Logistics Supports MoD support committee is chaired by Mr. Athanasios Ziliaskopoulos, pres- Leads and oversees and MoIT on: Expert team ident and CEO of TRAINOSE—Greece’s state-owned train the work of the LPC • Major themes assigned for company—and professor of mechanical engineering at the • Projects for the project; Channels the specific themes Contract with the University of Thessaly. The committee’s broad objective is to proposals by the LPC Government for formulate a national logistics strategy for Greece, a project into policy Distinction year 2013 between: that involves reducing barriers and costs for imports, export Ensures political • Short term (ST) Takes part in: and transit, as well as for the domestic market, and facilitating support on feasible • LPC meetings ST & MT actions • Medium term the operations in all of these. The World Bank supported the (MT) • Policty reform initiative offering analytical and process advice. In this con- Outcome: Strategy design and Action Plan for No permanent text, during the committee’s meetings a number of experts in- Implementation structure In-depth analysis formed the Committee’s members on subjects ranging from by mid-2013 road-side truck inspections and warehouse issues to nation- Note: LPC=Logistics Permanent Committee; MoD=Ministry of Development and al-level logistics planning. Figure A1.1 provides an overview Competitiveness and MoIT=Ministry of Infrastructure, Transport and Networks. 58 | Greek Logistics of the logistics sector (See Box A1.1 for a summary of the of the reform process by operators who may have thrived un- previous experiences of National Logistics Committees in der old, inefficient systems. Greece). In particular, the recently-formed Logistics Perma- nent Committee (LPC) has actively involved individual, large Ultimately, the Logistics Permanent Committee (LPC) players in the sector, in addition to association representa- should become a genuine consultative mechanism that al- tion. The advantage of this approach is to identify pragmatic lows the Ministry of Development and Competitiveness and solutions that make sense from a business point of view, to the Ministry of Infrastructure, Transport and Networks— allow the different views to be represented in the discussions and the government as a whole—to effectively consult with in a transparent and balanced manner and to avoid capture the private sector on improvements to the logistics environ- Box A1.1: Previous Experiences of National Logistics Committees in Greece This box summarizes the experiences with the first Logistics Committee (2009) and with second Logistics Permanent Committee (2011–2012) in Greece. It is based on evidence presented at the first meeting of the newly established Third Logistics Permanent Committee (February 19, 2013) by the Chairman, Professor Athanasios Ziliaskopoulos. The first LPC The first LPC was established in July 2008 (Chaired by Mr. Vamvakopoulos). It had the following agenda: to develop a national strategy for logistics in Greece; to revise and improve Law 3333/2005 for freight parks; to develop the legal framework for logistics in Greece, including on issues related to the trucking industry; and to promote Greece to become the center for logistics and trans-shipment in Southeast Europe. Its main contributions included: 1. A proposal for a hierarchical structure of logistic parks in the following locations: Thriassion Pedio (Attica), Thessaloniki, Patra, Alexandroupoli, Igoumenitsa, Thessaly (between Volos and Larissa), and a second freight village in the Attica region. 2. Quantitative and qualitative criteria for setting up a logistics park. 3. Acknowledgement that legal issues for cargo transportation in Greece musts be streamlined. 4. The need for logistics education to be tackled by the ministry of education. The Committee stopped working in the summer of 2009, as new national elections were announced. The second LPC The second LPC was established on November 2010 (chaired by Prof. Athanasios Ziliaskopoulos). It started its activities in January 2011, with the following agenda: to develop an integrated framework for the logistics sector in Greece that effectively considers all aspects of the supply chain; to revise Law 3333/2205 related to freight villages; and to develop legal instruments to settle existing poorly organized legacy freight forwarding and warehousing facilities. There was broad agreement on the following assessment of the state of logistics in Greece. Logistics is a business activity that concerns the private sector and as such the regulatory interventions from the government must be limited to the absolutely necessary level. Logistics is not recognized as an industry in the Greek legislation and the profession is undefined. There is no land use allocation for logistics in the national, regional, and municipal spatial plans. There are very few organized logistics parks; mostly small legacy freight-forwarding facilities with suboptimal organization. Law 3333/2005 is practically ineffective and was never used by the industry. Inland freight in Greece is transported by private use trucks, public use truck, rail, and intermodal. The distribution of freight to these modes however is not logical, mostly relying on the private truck use, creating enormous inefficiencies in the supply chains (domestic and international). Existing small freight forwarders offer little value-added services to the industry. The second LPC provided suggestions on two main issues: organizational issues of the profession; and spatial organization of the facilities (warehouses and freight centers). Appendix 1 | 59 Issues discussed in the meetings of the committed on the organization of the logistics profession included the following: Should one license for both freight-forwarding and trucking be allowed? What should the certification process for a freight forwarder or 3PL should be? Should it be the government’s responsibility to train and certify or could it be an industry based initiative with an oversight from the government? However, the LPC did not reach firm conclusions on these issues. On spatial issues the PCL worked on a two-pronged approach: it discussed changes to the legislation regulating the establishment of new facilities; and it suggested regulatory changes to settle existing legacy inefficient facilities. On the new facilities, substantial time was spent on analyzing the Law 3333/2015. It was recognized that this law was a significant piece of legislation and an important step in an attempt to set an order to the evolving disorder of facilities being established in various locations in the country and especially in Attica along the newly then built highway Attiki Odos, mostly on land characterized as agricultural (most of them operating in a legal “grey” area). The law aimed at creating a concentration of logistics activities to few especially designed and well organized facilities, to promote intermodality, to maximize utilization of trucks and balance the modes with emphasis also on rail connection (for larger facilities). Nevertheless the law was never used. Some of the possible reasons for the lack of interest from the industry to use the law were identified. One main reason identified was that the law was mostly designed for larger facilities, thereby limiting its applicability; therefore the LPC focused its discussions on how to make the law amenable to the creation of smaller facilities that serve medium urban areas (all areas outside Athens and Thessaloniki). Other issues relating to new facilities that the LPC discussed included: limits on the height of the building (and the volume) as well as fire compartment restrictions; feasibility of provisions to make forced acquisition of the land by unwilling sellers; and requirements of proximity to rail and port services. The LPC also analyzed the Law 3982/2011 for Business Parks concluding that in many ways provided a better instrument for building logistics centers. Turning to the existing facilities, this was recognized as the most difficult problem that Greek logistics faces. One concept that the LPC discussed was the feasibility of developing a legal instrument for legalizing informal logistics parks against subject to improving the facilities themselves. The Second LPC ended its works in August 2011, when a new Minister of Transport was nominated. ment. To this end, the committee, supported and advised by guidelines for the working groups are presented in Box A1.2, the World Bank, has embarked on a serious work program while Figure A1.2 summarizes the main areas covered by consisting of parallel sub-programs of reforms, with strong each of the working groups as of July 2013. ownership from the private sector and other stakeholders. The LPC’s seven working groups are addressing specific, Working groups of the Logistics technical aspects of the reform process. The groups are de- Permanent Committee signed to incorporate viewpoints from the industries that will be affected by reforms as well as academic and techni- Regulatory barriers in logistics service cal experts on the subjects. Three of the groups (ST-1, ST-2 provision and supply chain management and ST-3) are working to identify short-term measures, or “quick-fixes” to problems hindering Greece’s logistics perfor- Two working groups were charged with identifying short- mance. Four of the groups (MT-1, MT-2, MT-3 and MT-4) term measures to reduce the barriers to efficient logistics are working to identify medium-term measures that require service provision and supply chain management. Working more planning and preparation. The following sections de- group ST-1 focused on the identification of “Regulatory bar- scribe in more detail the specific responsibilities of these riers hampering the development and integration of logistics working groups and the progress they have made to date. centers” and working group ST-2 on “Regulatory barriers Each sub-group has been assigned areas of interest, within increasing costs to manage supply chains in industrial and which the groups have identified efficiency problems and retail businesses.” solutions that make sense from a business point of view. The 60 | Greek Logistics Box A1.2: Guidelines for the work of the project groups and sub-committees of the LPC The following guidelines were provided to the working groups to facilitate their works. 1. The working language and the meetings of the working group sessions should be in Greek in the meetings in which no international experts will take part. The key findings, outcomes, and action points of each session will be shared with the LPC and with the World Bank (WB) team in a timely manner. 2. Inquiries and requests by the working groups for support from the WB have to be recorded and forwarded to the World Bank team (e.g., requests on best practices, experts). 3. Each session of the working group would ideally a. Deal with subjects along a concrete and clearly communicated step-by-step approach, for example: i. Session 2: Agreeing on focus topics and their descriptions. ii. Session 3: Discussion of possible solutions, inviting all stakeholders and experts needed. iii. Session 4: Discussion of policy options (e.g., drafting a new law) for implementation. b. Be concluded with the following outputs: i. Action points and deliverables, including responsible person and deadline for delivery. One example of this is a report that gives identification of expertise required to advance works, as well as deepens assessment and modalities to tap on this expertise. Another example is an invitation of specific local or national level agencies representatives, technical departments, private experts, international companies, or other stakeholders to attend the working group sessions or other similar events. ii. Agreement on a date for the following meeting. iii. Agreement on how to split work within the working group. iv. Indication of additional input needed from World Bank/Taskforce for Greece (TFGR)/ Ministry of Development, Competitiveness, Infrastructure, Transport and Networks (MoD) / Logistics Permanent Committee (LPC). 4. The participation of officials from the public sector would also best be monitored (the secretariat in coordination with the chairman), to ensure their participation to all meetings where their presence is needed. 5. Re-evaluate in each meeting if the representation from certain ministries (e.g., the zoning / spatial planning issues is needed and at what stage of the process). 6. The MoD will monitor the sessions and their outcomes according to a set timeframe and communicate with the World Bank and the Chairman of the LPC to allow the latter to follow the process and troubleshoot wherever necessary. 7. Weekly Skype sessions between the MoD, the chairman of the LPC and the World Bank will be organized to review progress of each group. 8. The secretariat of the group will be responsible for: a. Writing the minutes of the meeting. b. Writing the document with the action points, responsible person and deadline. c. Sharing the minutes and action points with the chair of the project team for approval prior to circulating to the group. d. Keeping track and send reminders about deliverables. e. Keeping an up to date folder with all the documents relevant to the work of the group. The folder will be made available on an internet based shared platform accessible to all participants of all project groups. Appendix 1 | 61 Figure A1.2: Emphasis of work by the Logistics Permanent Committee and its short and medium term working groups by May 2013 in view of the issues outlined by The World Bank team in February 2013 List of working groups, as per May 2013 LPC ST-1 ST-2 ST-3 MT-1 MT-2 MT-3 MT-4 the logistics industry: Enhancing cost to manage supply chains in Operationalising of the National integration of logistics services; Regulatory barriers hampering Operational pre-conditions for Stimulating professionalism in Regulatory barriers increasing The Logistics Permanent Enhancing competitiveness - industrial and retail business Issues or measures identified Mapping, Monitoring and esp. licensing in trucking, Capacity of enforcing of Committee professional standards by The World Bank Team’s the development and transport regulations Preliminary Assessment, Logistics Strategy forwarding, 3PLs logistics centers Feb. 2013: See also Appendix 1. Matrix of proposed actions Evaluation Preparing a National Logistics Measures horizontal to the Strategy for competitiveness entire value chain Simplify Procedures and Improve Communication to Stakeholders and Local Enforcers Implementation and enforcement: An organizational and capacity building problem Establishment of a Monitoring and Evaluation framework Improvement in rail services infrastructure performance Port developments to serve Improving Greece and the wider region Facilitate connection to ports and rail networks of private companies Unlocking modern logistics operations and services Warehousing and logistics centers Restrictions for 3PLs on own Sectorial measures along the Supply Chain public fleet & certification requirements Supply chain management Trucking Transit , incl. The role of Customs and other Border Agencies Rail (freight) transport provision Air (freight) transport Transport of Dangerous Goods Trade Facilitation (falls mainly under the separate TF Strategy) Port service provision (partly under a separate Ministry) Short Sea Shipping (under a separate Ministry) Main emphasis Mainly covered/some emphasis Somewhat covered Limited or no coverage 62 | Greek Logistics The groups have outlined a set of barriers in land use, licens- Some of the more specific issues the group discussed include ing and some technical specifications of warehouses as seen the following: from the point of view of logistics service providers (typically ▶▶ Development of new logistics centers (freight villages); the third-party logistics, or 3PL, type of providers. These fall ▶▶ Re-engineering of areas with existing warehouse com- under the following headings: plexes; and 1. Land Coverage in Industrial Areas such as Thriasio, ▶▶ Operational issues. Tanagra, and Sindos (Thessaloniki). Enforcement of transport regulations 2. Technical Specifications for Warehouses. 3. Technical Specifications for Fire Compartments. A fifth working group (MT-2) is charged with identifying medium- to long-term measures to address the weaknesses 4. Municipal Fees in Industrial Areas, such as Thriasio, in the enforcement of transport regulations. This weakness Tanagra, and Sindos (Thessaloniki). has important consequences for the positive evolution of the 5. Licensing Issues of Warehousing. transport sector towards the standards of efficiency of oth- er European countries. It encourages low compliance with 6. Licensing Issues and Procedures for buying and selling technical and driving regulations. It also weakens the already trucks. small commercial sector in Greece faced with unauthorized 7. Other Issues. competition by foreign registered operators and own ac- count Greek companies. The ST-1 group also compiled a detailed inventory of per- missions and approvals needed for constructing and operat- The working group charged with these issues outlined the ing an industrial warehouse in each of the three main indus- following key needs and problems: trial locations (Thriasio, Tanagra, and Sindos). The purpose ▶▶ Identification and elimination of gaps in the procedure was to document the complexity of the process of approvals. for verifying infringements and collecting fines. ▶▶ Inability to collect fines from foreign defaulters. They concluded their work in May 2013, delivering an anal- ▶▶ Lack of a system for certified training of enforcers. ysis of each of the above issues and proposals for solution. ▶▶ Coordination problems between control authorities in the regions and lack of a national control strategy. Stimulating professionalism ▶▶ Need for a codification and simplification of transport A third working group (ST-3; which broke off from MT-3) regulations and definition of clearer guidelines for Com- is considering short-term measures that could help Greece petent Authorities’ enforcement units and staff. enhance professional standards in the logistics sector. This group will look at training and certification issues. Some The World Bank supplied an international expert to help an- possibilities include linking training to European certifica- alyze and propose measures to improve the implementation tions or other externally-developed criteria. of transport enforcement through better collaboration of the enforcement agencies and technological empowerment. Pre-conditions for logistics centers Enhancing competitiveness— A fourth working group (MT-1) is looking into medium- to Operationalizing the National Logistics long-term issues with land-use regulation and establishment Strategy of logistics centers. The group has been building on the find- ings and conclusions of the second LPC, as summarized in A sixth working group (MT-3) is working on a plan to put Box A1.1. Part of the focus of the working group is on the in practice the strategy that the larger Logistics Permanent regulatory framework that applies to warehouse complexes Committee will ultimately develop. Part of this group’s task and logistics centers. This topic has turned out to be rather is to anticipate some of the overlaps between the strategy, problematic to solve, and this group had to wrestle with a measures, and actions that have already been proposed. The host of complex and partly unused legislation that applies to group will also work to identify measures or policies that a range of warehouses and logistics centers. could be used to attract business investment. Appendix 1 | 63 Mapping, monitoring and evaluation A seventh and final working group (MT-4) has been tasked with identifying a number of data-sources and data-col- lection priorities. The work is still at an early stage, but the work of this group is expected to be significant for the imple- mentation and execution of the national strategy. The group plans to identify the following: ▶▶ Suitable key performance indicators to monitor logistics sector performance. ▶▶ Priority areas for a mapping exercise by the relevant ministries. ▶▶ Level of compliance with regard to existing national and international regulations. ▶▶ Ways to track the progress of reforms. The group also plans to outline a lasting framework for mon- itoring and evaluation compatible with available resources and address additional issues as necessary. Appendix 2: World Bank’s Suggestions on the Scope of a National Logistics Strategy or Master Plan National Logistics Strategy vs. a lated sectors. It will need to take measures that facilitate Master Plan investment and also make changes to regulations and systems to encourage the modernization of sectors that National Logistics Strategy: a vision with medium to long are vital to both the health of the country’s business en- term objectives. A national logistics strategy typically out- vironment and also firms’ ability to survive in the face of lines a vision, defines medium to long term objectives/goals competition within the region. There is not one single, and charts the resources needed to achieve this vision. Such major reform that will enhance the competitiveness of lo- a strategy can either be a “stand-alone” sector-specific one, gistics in Greece. Rather, improving the performance of or part of a broader national (e.g., industrial, trade or com- the sector will require a continued and coordinated effort petitiveness strategy), as is the case, in the Turkish Industrial to enact micro-interventions to address the many small Strategy for 2011-201423. distortions that combine to create great uncertainty, raise information costs for new entrants and ultimately deter In Greece, the Strategy or Master Plan may want to empha- investors. size three elements in its vision: the growth contribution ▶▶ Market positioning: in designing regulatory reforms, that an efficient logistics sector can bring to the Greek econo- the government may want to consider targeting me- my as a whole, the means of unlocking the growth potential, dium- to long-term market demand and build a rep- and the market positioning envisioned for Greek logistics. utation for high-quality service and reliability. Clearly ▶▶ Growth potential: efficient logistics can play an im- the comparative advantage of Greece should lie in deliv- portant role in Greece’s recovery in several ways: It can ering quality services: the country cannot compete with reduce the costs of importing and exporting; in itself, it the cost-advantageous emerging countries or with the can contribute to GDP growth as a service sector; and technological juggernauts of Northern Europe. For this it can reduce the fragmentation of the domestic econo- reason, the priority may be given to those reforms that my, thus improving economies of scale and productivity. push operators to apply best practices and deliver superi- Greece is geographically and economically well-located. or services. Dubai and Shanghai, which in a few decades Piraeus Port, the deepest seaport on the Mediterranean, acquired a global reputation as important centers for lo- is close to the Mediterranean maritime route and has al- gistics, represent role-models in this sense. ready started developing as a significant trans-shipment center. Both Piraeus and Thessaloniki have the potential Developing an implementable national logistics strategy to evolve into gateway ports to South East Europe and is not an easy task even in countries where the socio-eco- Central Europe. Provided that a long-distance, reliable nomic and political situation is stable. The logistics strate- railway connection can be established, Greece can take gy work started in 2008-2009 by the Ministries responsible advantage of the economic growth in Eastern Europe for logistics in Sweden and Finland, respectively, has not and the regional production networks established be- produced a viable strategy in either country to date. In both tween Eastern and Western Europe. Becoming a regional countries the process ground to a halt mainly because the gateway will require competitive logistics along the whole committees tasked to draft the strategy became so large that supply chain, in addition to efficient ports and railway reconciling the different stakeholder groups’ interests into a connections. consensus proved too difficult. ▶▶ Means: to realize its objective of becoming a gateway for Europe, Greece needs to undertake a number of 23 See example: http://www.sanayi.gov.tr/Files/Documents/ reforms to its transport, logistics and other trade-re- TurkiyeSanayiStratejisiIngilizce.pdf . 66 | Greek Logistics There is a genuine risk that all the work leading to a gener- ▶▶ The value added of the transport sector has reached XX al logistics strategy paper in Greece will come to nothing. million Euros (or X percent of Greece’s total). Given the limited capacity to implement reforms, too general ▶▶ Container transit through Greece has reached XX TEUs/ a strategy with limited or no commitment from key stake- increased by YY percent. holders—notably the Government—will turn into a very ▶▶ The container volume through and via Greek ports has frustrating process for all involved parties. reached X million TEUs. A (Freight) Logistics Master Plan: a pragmatic working ▶▶ FDI in transport and logistics sector has reached XX m€/ plan with defined tasks and responsibilities. A (Freight) increased by YY percent. Logistics Master Plan,24 on the other hand, should preferably be seen as a pragmatic working plan with clearly defined tasks and responsibilities between the public and private-sector Timeframe covered in a National stakeholders, concrete measures as well as milestones along Logistics Strategy and a Master Plan the way. It should also provide a rather detailed understand- ing of the costs and other resources needed. (See Attachment The choice of meaningful timeframes for a viable strategy 2: German Freight Transport and Logistics Action Plan). and an implementable Master Plan is essential. The cho- sen timeframe should support the overall strategy horizon of A concrete and implementable Logistics Master Plan is (e.g., EU policies and programs as well as the national ones). more in demand in Greece than a loosely defined strategy. In all strategy work, it is important to define the medium to A typical time horizon in logistics strategy is five to 15 long term goals in such a fashion that they are well-targeted years. Typically, the time horizon in setting strategic goals and ambitious, yet realistic to achieve. This applies also to im- are in the medium to long term, which means, for example, proving the logistics environment and preconditions in Greece setting the target milestones at five to 15 years. In this case both in view of the domestic market and its trade operations. that would mean approximately years 2017–2027. As trans- port infrastructure development typically has a long time Especially short term targets and the process of fulfilling span, more ambitious infrastructure plans could even have them need to be measurable. It is very important that the planning horizon of several decades. concrete targets are formulated so that progress towards, and eventually achievement of these can be monitored us- A typical time horizon in logistics Master Plans is two to ing easy-to-understand metrics or performance indicators, five years. Concrete and implementable measures and ac- either quantitative or qualitative or both. tions in a Master Plan should typically have a short to me- dium time horizon. This would mean that concrete targets The distinction between a Strategy and a Master Plan does should be achieved in two to five years, or in this case in years not imply necessarily that two different documents need 2015–2018. to be prepared. This does not have to be the case, if the strat- egy document itself contains a specific Master Plan. The scope of a National Logistics A shared understanding of and commitment to medium Master Plan and long term objectives is a requirement to set meaning- ful short term targets. Special attention needs to be paid to National Logistics Strategies or Master Plans typically the overall long term vision. Where does Greece want to be cover five to eigth main themes, which contain 20 to 50+ in five to ten (or more) years’ time? Setting quantitative tar- specific items or measures. In short, these themes and mea- gets accordingly has proven the best way to achieve progress sures tend to sort under the type of headings as shown in in many fields. Examples of potential targets might include Figure A2.1(See also other international examples suggested the following with measurable targets: in Box A2.2). ▶▶ The logistics sector contributed X percent of value added This report provides a guideline of the most pressing is- to the Greek economy in 20YY. sues to be remedied in the Greek transport and logistics ▶▶ The value added of the transport sector has grown by X percent by 20YY. 24 Such a document can also be called an Action Plan. Appendix 2 | 67 The selection of the entire scope of issues to be included is Figure A2.1: The main elements in the Logistics Strategy work in Finland the responsibility of the Government in consultation with 2009–2012, Ministry of Transport the LPC and other stakeholders as deemed necessary. In ad- and Communications dition to the topics raised in this report (see above), a number of other important items may be considered and incorporated in the national strategy. These include the following: Human Resources ▶▶ Investment in transport and logistics infrastructure and & services Skills/Know-how ■■ By mode ■■ By region, including the connections to neighboring National countries Logistics Logistics Logistics ■■ By type and source of finance, including the usage of Infrastructure Services System Public-Private Partnerships ■■ Investments in logistics service provision, including Foreign Direct Investment (FDI) Regulatory ▶▶ Human Resources and Skills Framework & Conventions ■■ Labour market issues ■■ Status of and need for competencies ■■ Supply of education, training and certification ▶▶ Access to Knowledge and Data sector. It contains several remedial actions structured by key ■■ Monitoring and Evaluation, incl. availability of mar- transport and logistics activities, and the overall operational ket information environment. The main issues which could be transferred on ■■ Removing the backlog of relevant transport statistics. areas for action in the Strategy and Master Plan—include the following: A tentative List of Contents for the Master Plan is shown in Box A2.1. The structure of how the specific measures, their an- ▶▶ Institutional and regulatory environment ticipated outcome and the division of responsibilities are pre- ■■ A complex regulatory framework sented in each of the measure is presented in the next section. ■■ Fragmented implementation and enforcement of lo- gistics policies Each of the specific measure should be presented in a ■■ Privatization and concession policies in transport and uniform, communicative fashion. This means that their logistics anticipated outcome and the division of responsibilities are ■■ Market access to transport and logistics services presented in a concise yet communicative fashion. Addition- ■■ Land ownership regulation ally, the motivation of each measure needs to be sound and presented clearly. ▶▶ Transport service provision by modes ■■ Road transport The German Freight Logistics and Transport Master ■■ Rail transport Plan of 2008 provide a good template. In this report, the ■■ Ferry shipping following headings have been used, where each measure is ■■ Ports described in one page. ▶▶ Logistics service provision by type ▶▶ Current situation ■■ Third-party logistics providers (3PLs) ▶▶ Description of the measure ■■ Warehousing ▶▶ Impact ■■ Logistics Zones ▶▶ Responsibility ■■ Trade facilitation and transit issues ▶▶ Budgetary relevance ■■ Trade facilitation challenges ■■ Challenges in Customs Administration ▶▶ EU Relevance ■■ Road and Rail Transit ▶▶ Implementation period 68 | Greek Logistics Box A2.1: Tentative Structure of the Logistics Master Plan for Greece List of Contents – Budgetary relevance • Foreword by Minister – EU Relevance • The Context of Transport and Logistics sector in – Implementation period Greece · Measure 2, etc. • Objectives of the Master Plan • Theme C: Logistics service provision by type • Theme A: Institutional and regulatory environment · Measure 1 · Measure 1: · Measure 2, etc. – Current situation • Theme D: Trade facilitation and transit issues – Description of the measure · Measure 1 – Impact · Measure 2, etc. – Responsibility • Theme E: Investment in transport and logistics – Budgetary relevance infrastructure and services – EU Relevance · Measure 1 – Implementation period · Measure 2, etc. · Measure 2, etc. • Theme F: Human Resources and Skills • Theme B: Transport service provision by modes · Measure 1 · Measure 1 · Measure 2, etc. – Current situation • Theme G: Access to Knowledge and Data – Description of the measure · Measure 1 – Impact · Measure 2, etc. – Responsibility Glossary and Abbreviations. Specifically, the German Freight Transport and Logistics Ac- Two “especially important measures” and two “other tion Plan from the year 2010, which is an updated version measures” of the 2008 Freight Transport and Logistics Master Plan has 4. Promote the compatibility of transport growth with en- identified five main areas, where concerted action is need- vironmental protection and climate change mitigation ed. Each of these comprise eight measures considered par- Three “especially important measures” and two “other ticularly urgent, tagged as “especially important measures” measures” and four “other measures to be implemented.” The five areas include: 5. Support good conditions of working and training in the freight transport industry 1. Strengthen Germany as a logistics center One “especially important measures” and four “other Four “especially important measures” and two “other measures” measures” 2. Enhance the efficiency of all modes of transport The Timeline for producing a National Eight “especially important measures” and two “other Logistics Master Plan measures” The Greek Government should produce a strategy as soon 3. Exploit the strengths of all modes of transport by in- as possible, so to anchor all other initiatives by the Greek terlinking transport infrastructure in an optimum state and any other stakeholders to it. manner Appendix 2 | 69 Box A2.2: Examples of national logistics/transport strategies, Master Plans, or equivalent Greece: Trichas S. (2011) “Actual situation and Master Plan for the development of the Supply Chain Market in Greece”, 4th European conference on ICT for Transport Logistics (presentation). http://www.ecitl.eu/proceedings11/Keynotes/Trichas_Actual%20Situation%20and%20Master%20Plan%20 for%20the%20Development%20of%20the%20Supply%20Chain%20Market%20in%20Greece.pdf. European Commission: Web references to EU Freight Transport Logistics Action Plan and Logistics Strategy: http://ec.europa.eu/ transport/themes/its/road/application_areas/freight_and_logistics_en.htm. http://ec.europa.eu/transport/themes/strategies/2007_logistics_en.htm. Germany: Freight Transport and Logistics Master Plan 2008: http://www.bmvbs.de/cae/servlet/contentblob/30912/publicationFile/462/masterplan-freight-transport-and- logistics.pdf. Freight Transport and Logistics Action Plan—Logistics Initiative for Germany, 2010. http://www.bmvbs.de/SharedDocs/EN/Artikel/UI/freight-transport-and-logistics-action-plan.html. Turkey: National Strategy outline by M.E. Porter (2009) http://www.isc.hbs.edu/pdf/20091017_Turkey_CAON.pdf. Turkish Industrial Strategy Document 2011-2014: http://www.sanayi.gov.tr/Files/Documents/ TurkiyeSanayiStratejisiIngilizce.pdf. Finland: Strengthening Finland’s logistics position, Ministry of Transport and Communications 2005. http://www.lvm.fi/fileserver/strengthening%20finland’s%20logistics%20position.pdf. Intelligent Transport Strategy, Ministry of Transport and Communications 2009: http://siteresources.worldbank. org/INTTHAILAND/Resources/333200-1177475763598/2007cdp_infra-global_trends_in_transport.pdf. Transport of Dangerous Goods Strategy, Ministry of Transport and Communications 2006-2015: http://www.lvm.fi/fileserver/transport%20of%20dangerous%20goods%20in%20finland.pdf. South Africa: National Freight Logistics Strategy 2006: http://www.portsregulator.org/images/documents/National_Freight_Logistics_Strategy.pdf. Korea: Law on National Logistics (Strategy) 2010: http://english.molit.go.kr/upload//eng_law//20110401101423334_ENFORCEMENT%20DECREE%20OF%20 THE%20BASIC%20LOGISTICS%20POLICY%20ACT.pdf. General presentation: http://www.koti.re.kr/mail/news/KSP02_chapter04.pdf. Indonesia: State of Logistics Indonesia 2013: http://www.panteia.eu/nl/News/2013/09/~/media/9%20PanteiaEU/files/StateofLogisticsIndonesia2013.ashx. Panama: Logistics Portal: http://www.gatech.pa/news/2012/02/launch-of-the-logistics-cabinet-and-the-logistics-portal-2/. World Bank: Amos (2007) on “Responding to global logistics trends with a National Logistics Strategy”: http://siteresources.worldbank.org/INTTHAILAND/Resources/333200-1177475763598/2007cdp_infra-global_ trends_in_transport.pdf. Appendix 3: Roadside enforcement in Greece Policy maker/regulator - Disseminates transport regulations and advises on interpretation and Table A3.1:  uniform application (interim assessment of the MT-2 Working Group, July 2013) Financial Regions Traffic police Port police Police - SDOE Customs Authorities Affiliation Ministry of Ministry for the Ministry of Ministry of Finance Ministry of Finance Home Affairs Protection of Citizens Mercantile Marine Where? (Public roads Public roads and (Port areas) (Everywhere) Customs premises. and spaces spaces used for public On special authorization, in the used for public traffic (except port premises of enterprises traffic)** areas) When? n.a.t 24/7 n.a. (24/7 Office hours of the public 365 days per year 365 days per year) sector. Upon request and on costs of the applicant, customs controls may take place after office hours. Border and airport customs: 24/7 Do they control (Controls Both independently n.a. (Both Only on occasion of customs transport dedicated and on occasion of independently controls regulations to transport other controls and on occasion of independently or regulations) other controls) on occasion of their other controls? What are the (Joint control Traffic police officers Input not (The control 85 customs authorities control units and teams, at least available at teams of the SDOE how many? one in each of the time of regional services. the Regional compilation 158 days of control Departments) planned for this year) Who decides when n.a. (Headquarters n.a. (Central annual Based on risk assessment to control and how Chiefs of police planning) system many times? Control planning units) How are new (MoT Circulars) Central units n.a. (The central unit The central unit disseminates transport disseminate the disseminates the the notifications of the MoT regulations passed transport regulations notifications of the to the customs authorities, on to control units? with additional MoT) with additional instructions, if instructions, if needed needed Initial and periodic (MoT training Based on service needs n.a. (None in the last 4 None training of control seminar in years) staff in transport 2007) regulations * Information in the table is based on legislation and on replies of control authorities to a questionnaire circulated by the project group. ** Information in parenthesis is not documented yet. Table A3.2: Current legislation on inspection of roadside transport (prepared by LPC sub-committee MT-2) Legislation providing substantive rules of procedure, penalties and any other relevant matter Who produces Community legislation the law and 72 | Greek Logistics (Includes national legislation transposing and implementing National legislation (non- pursue a policy α/α Control class EU law) EU) in this area Checkpoints Controls Basic procedure Law 3446/2006 (A 46) Articles Traffic, Port Police, roadside 1–4, as applicable Customs, Financial (horizontal JMD G5/52182/3729/2000 Crime, Mixed legislation) (B 1136) Control Team of the Regions JMD G5/29480/2304/2001 (B 614), and specific provisions by institution control (traffic, port police, etc.) 1. Driving hours Regulation (EC) 561/2006 • N/Address • Driving hours and rest Instruments of Law and rest periods Regulation (EC) 3821/85 Freight • Proper installation 3446/2006, mixed of drivers - • N/Passenger and use of recording crews control tachograph Directive 2006/22/EC as amended Transport equipment Law 3534/2007 (A 40) Articles 9–14 Division Embed FRY. 2006/22/EC: JMD G438/oik.28317/2481/2009 (B-989) • Address Vehicle Penalties: JMD F450/51477/5520/2011 (B 2687) Technology • N/Department of Informatics • Ministry of Labor 2. Weights and Directive 96/53 EC as applicable PD 1161–1177 (A380) as Address Vehicle Maximum vehicle Instruments dimensions applicable Technology weights and dimensions n.3446/2006 N/Address Freight (trucks) • N/Passenger and police Transport authorities (trucks Division and buses) • Address D13 (General Secretariat of Public Works) Table A3.2: Current legislation on inspection of roadside transport (prepared by LPC sub-committee MT-2) Legislation providing substantive rules of procedure, penalties and any other relevant matter Who produces Community legislation the law and (Includes national legislation transposing and implementing National legislation (non- pursue a policy α/α Control class EU law) EU) in this area Checkpoints Controls 3. Roadside DIRECTIVE 2000/30/EC OF THE EUROPEAN PARLIAMENT AND OF • D/ Vehicle a) Visual inspection of the Audit institution: inspection THE COUNCIL Inspection maintenance condition Mixed Control Team Directive 2000/30/ June 6, 2000 in collaboration of the commercial EC On the technical roadside inspection of the roadworthiness of with D/ vehicle (heavy trucks (NDT) commercial vehicles circulating in the Community Transmitter buses road trains) Penalties: (EE L 203, 10.8.2000, p.1) Passenger stationary • Fines Modifications: b) Control Commission Directive 2003/26/EC of 3 April 2003 (L 90/8.4.2003 • Removal of data roadworthiness traffic. Directive 2010/47/EE of 5 July 2010 (L 173/8.7.2010) reports, the vehicle Transposition AND AMENDMENTS (TDS Control) • Moving vehicle ------------------------------------------------ tow vehicle to 1)  JMD F.2/55009/4626/00/02 (GG 1028/7-8-02 B): Adapting c) Inspections to repair cars Greek legislation to the provisions of Directive 2000/30/EC of 6 detect any defects June 2000 on the technical roadside inspection of commercial maintenance vehicles circulating in the Community 1. IDENTIFICATION ----------------------------------------------- (ID-plates) VEHICLE F.2/32397/3517/04 JMD (Official Gazette 303 V/11-2-2004): 2)  2. BRAKES Amendment F2/55009/4626/00/02 (B 1028) Joint Ministerial Decision “Adaptation of Greek legislation to the provisions of 3. STEERING Directive 2000/30/EC of 6 June 2000 on the technical roadside 4. VISIBILITY inspection of the roadworthiness of commercial vehicles 5. LAMPS, REFLECTORS, circulating in the Community,” in compliance with the provisions ELECTRICAL of Directive 2003/26/EC EQUIPMENT ------------------------------------------------- 3)  JMD 23418/1787/07 (GG 699 V/4-5-2007) Amendments No. 6. BARS, WHEELS, TIRES F2/55009/4626/00/02 (B 1028) Joint Ministerial Decision AND SUSPENSION “Adaptation of Greek legislation to the provisions of Directive 7. CHASSIS 2000/30/EC of 6 June 2000 on the technical roadside inspection 8. EQUIPMENT of the roadworthiness of commercial vehicles circulating in the (Including: Community,” as applicable Speed indicator ------------------------------------------------- (Tachograph) G6/oik.15288/1248/09 JMD (Official Gazette 603 V/2-4-2009): 4)  Amendment No. F2/55009/4626/00 (GG 1028/V/7.8.2002) Limiting device (cutter) Joint Ministerial Decision “Adaptation of Greek legislation Speedometer to the provisions of Directive 2000/30/EK of 6 June 2000 on 8. OCHLISEIS (exhaust- the technical roadside inspection of commercial vehicles”, as noise) applicable ----------------------------------------------- JMD 35359/4508/10/2012 (GG 40/V/2012) “Modification of 5)  F2/55009/4626/00/2002 joint ministerial decision” Adaptation of Greek legislation to the provisions of Directive 2000/30/ EC of 6 June 2000 on the technical roadside inspection of the roadworthiness of commercial vehicles circulating in the Community ‘(1028 B) (Harmonization with the provisions of Directive 2010/47/EE) Appendix 3 | 73 Continued on next page Table A3.2: Current legislation on inspection of roadside transport (prepared by LPC sub-committee MT-2) Legislation providing substantive rules of procedure, penalties and any other relevant matter Who produces Community legislation the law and 74 | Greek Logistics (Includes national legislation transposing and implementing National legislation (non- pursue a policy α/α Control class EU law) EU) in this area Checkpoints Controls 4. Speed limiters See checkpoints Directive 2000/30 as amended by Directive • D/nsi Vehicle Mixed Control Team Directive 2002/85/ 2010/47 Inspection only (NDT) EC Same checkpoints included in Directive 2009/40 to the part of the (Visual inspection) device control at periodic check on MOT (Directive 2009/40) and roadside inspection (Directive 2000/30) 5. Directive on Presidential Decree 74/2008 (A 112) “Adaptation of Greek Articles 94 to 95 and 100 of Address Highway Existence of a valid Organs n.3446/2006 the initial and legislation with Directive 2003/59/EK the European Parliament the Highway Code as ratified driving license, indicating and police and port periodic training and of the Council of 15 July 2003 on the initial qualification and by n.2696/1999 (A’57), as the password “95” on the authorities of drivers periodic training of drivers of certain road vehicles used for the amended and in force by Certificate of Professional 2003/59/ΕΚ carriage of goods or passengers, amending Council Regulation paragraph 1 of Article 42 Competence (P.E.I.) (EEC) No. 3820/1985 and Council Directive 91/439/EEC and of n.2963/2001 (A268) to repealing Council Directive 76/914/EEC, as Directive amended by paragraph 2 of Article 21 Directive of n.3446/2006 (A49) to 2004/66/EC of 26 April 2004 and 2006/103/EC of paragraphs 1, 2 and 3 of 20 November 2006 Article 85 n.3542/2007 (A50), paragraph 1 of Article 16 of n.3710/2008 (A216) and paragraph 1 of article 113 of n.4070/2012 (A82) 6. Driver Licenses Presidential Decree 51/2012 Articles 94 to 95 and 100 of Address Highway Existence of a valid Organs n.3446/2006 Directive (A 101) “Adaptation of Greek legislation with Directive 2006/126/ the Highway Code as ratified driving license specific and police and port 2006/126/EC EC of the European Parliament and of the Council of 20 December by n.2696/1999 (A’57), as category depending on authorities 2006, as amended by Commission Directive 2008/65/EC of 27 amended and in force by the vehicle driven June 2008, 2009/113/EC of 25 August 2009 and 2011/94/EE of paragraph 1 of Article 42 28 November 2011 of n.2963/2001 (A268) to paragraph 2 of Article 21 of n.3446/2006 (A49) to paragraphs 1, 2 and 3 of Article 85 n.3542/2007 (A50), paragraph 1 of Article 16 of n.3710/2008 (A216) and paragraph 1 of article 113 of n.4070/2012 (A82) Table A3.2: Current legislation on inspection of roadside transport (prepared by LPC sub-committee MT-2) Legislation providing substantive rules of procedure, penalties and any other relevant matter Who produces Community legislation the law and (Includes national legislation transposing and implementing National legislation (non- pursue a policy α/α Control class EU law) EU) in this area Checkpoints Controls 7. Dangerous goods The obligation and the checkpoints-offenses provided for in The monitoring and penalties N/Vehicle forecast Traffic and SVC. Directive 2008/68/ Directive 95/50/EC (P.D.256/99, Government Gazette A 209) as for only two of those Technology Annex I -2004/112/EK EC amended by 2004/112/EC provided for in Directive Directorate Checklist: (Harmonization (UNHCR F101/17353/1929/2006 Gazette B 392) uniform 2004/112/EC n.3446/2006 Department • Transport Document with JMD procedures for checks on the transport of dangerous goods’ offenses listed in (A 46). Specification • Written instructions 52167/4683/2012, which replaces the Annexes 95/50/EC relating to the definition of Specifically, the certificate of and vehicles the vehicle and ADR driver- • Bilateral/multilateral GG B 37) - offenses transporting agreement or specific training certificate dangerous goods Includes approval substantive rules For other infringements are and perishable not handed down in JMD food • Approval Certificate for the transport ADR vehicle of dangerous G5/29480/2304/2001 (B goods 614) include sanctions and • Certificate training penalties for breaches of the guide old Directive 95/50/EC, which • Approved for transport has been replaced in regard goods to violations • Approved vehicles to be transferred Asst. Merch • Provisions on how to transfer • Prohibition of mixed loading • Loading, security cargo handling • Leakage of goods or damage packages- packages • Highlight packaging under UN/Mark tanks • package marking and placards • plate tank/vehicle • Highlight vehicle/ transport unit • General safety equipment • Equipment proportion of goods • Equipment written instructions • Fire Appendix 3 | 75 Continued on next page Table A3.2: Current legislation on inspection of roadside transport (prepared by LPC sub-committee MT-2) Legislation providing substantive rules of procedure, penalties and any other relevant matter Who produces Community legislation the law and 76 | Greek Logistics (Includes national legislation transposing and implementing National legislation (non- pursue a policy α/α Control class EU law) EU) in this area Checkpoints Controls 8. Carryings trucks Law 1959/1991, as applicable N/Address Freight • Carryings FICH and LPFs Instruments of Law (FICH) 3446/2006 Law 3887/2010 (A 174) (LPFs) Arrangements carried per category LPFs 9. Market access for Regulation (EC) 1072/2009 cabotage, international transport N/Address Freight • Cabotage Instruments of Law freight Law 4093/2012 (A 222) leases • Community licenses 3446/2006 • Leases • Transit permits 10. Market access Regulation 1073/2009 N2446/1996 N/Passenger • License Instruments of Law for international Interbus Agreement UNHCR G456/7383/531/12 Transport Division • Tickets 3446/2006 passenger Bilateral Agreements transport by bus PD 160/76 (Procedure and • Sheet cruise control Penalties) • Contract work N1903/1990 Article 18 • Community license (interception of capacity) 11. Market access Regulation 1073/2009 (cabotage) N2963/2001 (Bus) N/Passenger • Legality carrying traffic Instruments of Law for national N2446/1996 (LDCH) Transport Division volumes 3446/2006 passenger UNHCR D 16900/2550/76 • Community transport by bus (LICH) authorization N1903/1990 Article 18 • Sheet cruise control (interception of capacity) 12. Market access N2801/2000 Alien E.D.CH. N/Passenger Instruments of Law for national and N4070/2012 Greek E.D.CH. Transport Division 3446/2006 international passenger transport E.D.CH. (taxis) 13. Safe truck loading Article 32 of the Highway Address Vehicle • Loading Instruments and stowage Code Technology n.3446/2006 Article 3 of n.3446/06 N/Address Freight and police authorities 14. Vehicle identity Article 85 of the Highway Address Highway • Chassis number Mixed Control Team Code Address Vehicle • Classification (NDT) to control of Technology • Data traffic Directive 2000/30 and organs n 3446/06 (trucks) Table A3.2: Current legislation on inspection of roadside transport (prepared by LPC sub-committee MT-2) Legislation providing substantive rules of procedure, penalties and any other relevant matter Who produces Community legislation the law and (Includes national legislation transposing and implementing National legislation (non- pursue a policy α/α Control class EU law) EU) in this area Checkpoints Controls 15. Control expert Article 3 of Law 2052/92 • D/nsi Vehicle Control exhaust - Auditing bodies: exhaust service (Government Gazette 94 A Inspection passenger, trucks, buses, a) Traffic; vehicles ‘): Measures to combat smog (currently implemented) (emissions control and urban settings b) Municipal Police; • Motorcycles and card) ------------------------------------ mopeds (as forecast) Organs of the c)  • Article 3 of Law added section at the end of Ministry of 2052/1992, paragraph 9 of Article 3 of Environment; • Presidential Article 19 of Law 2289/95, d) Instruments of Decree 363/1995 Government Gazette 27 A ‘) the Ministry of -------------------------- Transport and as applicable added case e ‘and Communications renumbering the existing in f by paragraph 7b of article 8 Mobile control of Law 2366/95, Government unit “field” means Gazette 256 A’ a unit established --------------------------- institution of the (Tombstones subsection as competent local it was inserted by paragraph Police Authority 7 of Article 8 of Law 2366/95, and employee Government Gazette 256 A, or departmental by paragraph 4 of Article 16 Communications of Law 2465/97, OG-28 A) Services MOT or ------------------------------------ where not yet --------- work MOT or Antiques. THE PAR. 1 of Article the competent 3 by Fri 1 of article 7 of Law authorities of 3897/10, OG-208 A/10-12- the Ministry of 10 - WAS AMENDED TO PAR. Environment 1 of Article 5 of Law 3710/08 e) Authorized (Government Gazette 216 private auditors A/23-10-08) (non- PRESIDENTIAL DECREE NO. materialized) 363/FEK/A ‘193/1995 Penalties: System definition to impose • Simple creation administrative penalties and cancellation on the institution involved of TBI. Command in implementing the Card to supply new Elenchchou Exhaust (TBI) HPC within 10 Amendments to the Laws days • 3109/2003 • Fines • 3710/2008 • Application of the • 3897/2010 Criminal Code (false or falsified or unlawfully issued HPC) Appendix 3 | 77 Continued on next page Table A3.2: Current legislation on inspection of roadside transport (prepared by LPC sub-committee MT-2) Legislation providing substantive rules of procedure, penalties and any other relevant matter Who produces Community legislation the law and 78 | Greek Logistics (Includes national legislation transposing and implementing National legislation (non- pursue a policy α/α Control class EU law) EU) in this area Checkpoints Controls 16. Roadside • D/nsi Vehicle Visual inspection of the In the event of inspections of Inspection condition of the vehicle any deficiencies or mobile control on road safety and violations satisfy the unit “field” of operation Provisions of the the Presidential Highway Code 363/1995 (KOK) fines from (Provision of the State of the Presidential mobile unit control, Decree 363/1995, which is part of the as supplemented competent Police by Article 7, Law Authority 3897/2010) Appendix 4: Road infrastructure in Greece – a brief overview With regards road infrastructure, the main highways of is also connected with the Ionian Road albeit with a road of Greece cross in Thessaloniki: poor quality. 25 In terms of pan-European integration, Greece ▶▶ PATHE is the vertical axis (N/S) linking the ports of Pa- is a Contracting Party to the European Agreement on Main tra, Piraeus and Attica, Volos (by a detour) and Thessa- International Traffic Arteries (AGR), of 15 November 1975, loniki. It also covers flows to Northern borders, especially which defines the E-road network. See Greece network of to F.Y.R.O.M. and less to Bulgaria; and E-roads below: ▶▶ Egnatia Odos is the horizontal axis (E/W) linking the The new EU TEN-T network consists of two layers: a core ports of Igoumenitsa, Thessaloniki, Kavala and Alexan- network to be completed by 2030 and a comprehensive net- droupoli. Egnatia Odos is the main artery for trucks con- work feeding into this, to be completed by 2050. The com- necting Turkey and Europe. prehensive network will ensure full coverage of the EU and Both axes are part of the EU South Eastern corridors. Each of accessibility of all regions. The core network will prioritize them has several bottlenecks: PATHE bottleneck is the Tem- the most important links and nodes of the TEN-T, to be fully pi Valley and Egnatia Odos bottlenecks are Polimilos, Grev- functional until 2030. Both layers include all transport modes: ena, Metsovo and Paramythia, all in the mountainous NW road, rail, air, inland waterways and maritime transport, as Greece. The Ionian Road, connecting Patra and Igoumenitsa, well as intermodal platforms. The map of the Comprehensive is secondary for the moment. The Port of NAVIPE-Astakos and Core Road Network for Greece is shown below. 25 “Strategic Mapping of a National Logistics & Supply Chain System: The Case of Greece”, by Ioannis Siamas, Eleftherios Iakovou, Dimitrios Vlachos. 80 | Greek Logistics Figure A4.1: E-roads network in Greece and neighboring countries Appendix 4 | 81 Figure A4.2: TEN-T Network: Comprehensive and Core Road Network for Greece Source: http://ec.europa.eu/transport/themes/infrastructure/doc/com(2011)_650_final_2_annex_i_part23.pdf. www.worldbank.org