Logistics firms brace for slump in turnover from China freeze

The Greek logistics sector could see turnover nosedive by up to 30 percent as a result of paralysis in China following the coronavirus outbreak, market experts tell Kathimerini.

The impact of the virus is so far limited to companies that ship, store and manage commodities, as it is estimated that it takes around 40 days for an order to arrive from China to Greece’s port of Piraeus and several orders were already on their way to Greece when Chinese factories and logistics companies suspended operations.

Moreover, the fact that many dockworkers are refusing to board ships coming from Asia has been enough to upset both the operation of the country’s biggest port and logistics firms.

Greece imports about 930 products from China – including apparel, machinery, tools, spare parts, paper products, toys, pipes, textile and food – meaning that the activity of firms trading Chinese commodities will be hit.

Logistics company officials explain to Kathimerini that the sector has adopted a wait-and-see policy, given the unprecedented nature of the situation. They are also not ruling out a slump in domestic consumption if the spread of the coronavirus in Greece causes panic.

Nikolaos Rodopoulos, the president of the Hellenic Logistics Association, says that most factories in China have either suspended operations or are in slow mode, meaning that the market will experience significant shortages in goods such as parts used in the assembly of electronic appliances.

“The first shortages in consumables such as toner are already being felt, but the nightmare for the market will come from a slump in trade and tourism, the two sectors that support logistics,” Rodopoulos argues.

In January, the number of incoming containers at the port of Piraeus grew by just 7.6 percent, while the following months will see a decline as containers stay stuck in China. In contrast, in January and February 2019 the year-on-year rise had come to 22.2 percent.

“Without having a clear picture yet, we estimate that the epidemic could cause a drop in turnover of 30 percent, while in the coming days a greater drop is expected in containers,” says Kostas Achladitis, chief executive at Golden Cargo.

Source: ekathimerini.com