PIRAEUS, Greece — The dramatic growth in China’s economy as well as Asian business in general will likely keep demand for freight capacity high, said the president of the world’s largest group of shipowners.
“We’re looking forward to a sustained market,” Nicos D. Efthymiou, president of the Union of Greek Shipowners, said in an interview.
He predicted that in the absence of any major shocks to the global economy, rising world trade will continue to spur growth in the shipping industry.
Greece is ranked the world’s top merchant shipping power, with 3,112 Greek-owned vessels under national or foreign flags accounting for a 20 percent share of global merchant shipping, according to estimates from the United Nations. Greek-owned ships constitute 56 percent of the European Union fleet.
Greek shipping income last year contributed $17.5 billion to the national economy, up from $11 billion in 2003.
Speaking in his office in the port of Piraeus, outside Athens, Efthymiou said as China becomes more integrated with the world economy shipping to China has evolved into more of a two-way enterprise. In the past, ships arrived in China largely empty and left packed with consumer goods, but now they are more likely to arrive loaded with raw materials and other supplies for the expanding economy.
In its most recent annual report, the shipowners’ group said that strong demand in China and India contributed “significantly” to the industry’s recent growth and intensified pressure to raise freight rates. In 2003, the most recent year for which full data was available, the volume of cargo handled by Chinese ports rose 35 percent, the group noted.
Efthymiou said changes in global security requirements have placed greater economic pressure on ocean carriers. “I can’t put a figure on the actual costs,” he said.
The association believes the security culture developing in maritime transport “should not disturb the free flow of commerce,” Efthymiou said, adding that his group has lobbied European Union authorities to ensure that the rising security costs, which his group believes should be incurred by governments, “should not be charged to the shipping industry.”
He said that would be important “to avoid distortion of trade between the U.S. and EU.”
This story first appeared in the April 19, 2005 issue of WWD. Subscribe Today.
U.S. and EU authorities have made strong steps toward harmonizing their security standards, which helps to smooth the way for carriers, Efthymiou said.