The Greek freight forwarding market is known to be competitive yet unique in many ways. Situated at the crossroads of Europe, Asia and Africa, the Greek freight forwarders find themselves in an exciting position. Though the competition may be high, so are the opportunities. In recent years, the Belt and Road Initiative took an interest in the Port of Pireaus and has extensively increased its operations and investments there, making it a critical point in the Maritime Silk Road.
In this month's interview, we speak with Philemon Lerias from Arian Maritime, a New Silk Road Network member from Greece. We learn about the importance of Greece as a critical transit hub towards the Balkans and the growing popularity of the Port of Piraeus. Finally, we also discuss the opportunities that Arian Maritime has found with the arrival of the Maritime Silk Road and the challenges thrown at them during the pandemic.
In conversation with Philemon…
NSRN: Arian Maritime provides services in all forms of freight forwarding options with quality service. This has been achieved in less than a decade since the company began. What can you tell us about the history of the company and the vision for it?
Philemon: Arian Maritime started in 2010 and has three partners, our CEO Anastasios Peppas, our GM Aris Aristou and our CFO Ilias Anagnostopoulos. With a common freight forwarding background, and being friends, they wanted to come together and start a new venture and make a difference. The goal was to offer better value in service and try to be faster and more efficient than others by combining ethics to the existing scene.
We try to cover as many customers needs as possible, diversify if you prefer. The market is highly competitive, and we are keen on our tasks because we are willing to support all requirements and leave no one unassisted. We started new in a highly competitive market, which was made even more complex by the economic crisis in the EU, which affected Greece as well. The challenges were many then, but here we are, still growing and still kicking! We are constantly expanding. We have 20 people in two offices right now and are looking to hire more capable people to join the team. More capable hands on deck are always welcome.
NSRN: When did your association with Arian Maritime begin, and what are your duties and responsibilities? How does a typical day look like?
Philemon: I joined in February 2018. Coming from a freight forwarding background and having my 20 year anniversary in July, it has been a great and challenging journey! These three years in Arian have been very productive and challenging since the environment is highly “development-friendly” and provides a variety of opportunities to express your style of operations and room for expansion.
Apart from my regular sales portfolio, one of the tasks that I enjoy working on is the Agency Network development. Usually, our CEO Anastasios and I are travelling abroad to join the Network meetings while our GM Aris backs up with inside sales and rates. Our CFO Ilias is our finance “solicitor”.
So, you can name my task business development and sales. Constantly looking for new business, new commodities to move, new routes, new solutions, etc. Anything new is super appealing and this is what fuels our daily tasks. Let's say that a satisfying day starts with Asia around 07.00 am. It then continues till 4-5 pm with Europe. Afterwards, the business moves towards the Americas.
However, during these crazy times for the forwarding business, it practically begins with troubleshooting! Then we try to catch up with the daily progress of the running files and serving as many sales leads, handling rate requests, haing discussions with clients, etc. Freight forwarding has always been hectic, and COVID-19 did not make it any easier.
NSRN: Ocean freight forms a big chunk of your portfolio, and Port of Piraeus is an essential part of the Maritime Silk Road. What are the niche services you offer, and how much of the ocean freight business comes from China? Are there any challenges that you face, considering how unstable ocean freight has been during the pandemic, and if so, what are the strategies to cope?
Philemon: Port of Pireaus is becoming essential. We believe that it is getting the place that it deserves. It is a good location, it is expanding quite fast, and we think it will reach good capacity in the next two years. Piraeus is critical because apart from the local cargo it is also a transit hub for almost all the liners today.
So, as you can imagine having our headquarter there is vital because apart from the professional connections we also have personal ones. Knowing the key persons at the liner offices in Piraeus is always an advantage since when a problem appears it is easier to pick up the phone and get the solution.
The Port of Piraeus is also critical to the Maritime Silk Road, especially with the significant presence of COSCO. We expect more progress in combined rail transport in the next few years, although it is still slower than we wished for. We are discussing space inside Pireaus in the form of a warehouse, and we are already allowed space regarding the export volumes via Pireaus. We plan to use this tool for exports from Central Europe via the vertical central Balkans rail axle ( Czech Rep, Austria, Hungary, Serbia, N. Macedonia ). We are still not able to use the same space for import but we would like to have an early start with it and be one of the pioneers in this progressing route.
Ocean freight is our core business, taking up 70-80%. At the same time, 20-30% is road freight, rail or air freight. In some periods there is more air freight or more road freight, depending on the markets mood. 50-60% of our ocean business is related to China, and we are one of the few companies in Greece that does export to China apart from import. This is not common, so having a regular flow of cargo from both Thessaloniki and Piraeus port to China is offering us the leverage when it comes to freight purchase for our imports and vice versa.
Now coming to the challenges, the past two years have been filled with them. The good thing is that we are trained because even before the COVID-19 pandemic, we didn't have a smooth decade. The assuring side is that the current challenges are global, so it is easier for us as forwarders to explain to our customers what is going on, and so far the majority understand it very well. No one can predict what the next days shall bring, there are colossal freight variations. We move day by day or hour per hour. We receive orders and serve them as fast as possible.
It is a different orientation for our strategy since there is no other way to cope with the current market trend. A few years ago, we pursued having as many long-term contracts as possible, but now it is all on the spot. The only solution to this is speed; if you are fast enough, you drive cargo reservations towards you as well. Customers are just anxious for space! So they will take the fast and real solution without too much bargaining. This doesn't mean we overcharge; we make sure we offer the most logical solutions as fast as possible at sustainable freight levels. We like customers to work with us for a long time and mutually expand and progress. Does this method work for us? Well the numbers are okay and, as our CEO Anastasios says, numbers may be cruel sometimes but they never lie (laughs).
NSRN: Greece in itself is a very interesting market being surrounded by Europe, Asia, Africa. Given that the market is not so large, competition is assumingly also high. Can you tell us a bit more about the unique aspects and the nuances of doing business here?
Philemon: Greece is surrounded by a unique environment. It is not just its location when you see the map from a distance. The neighbouring countries Albania, N. Macedonia, Serbia, Bulgaria, Turkey, Cyprus, Israel, Syria, Lebanon, Egypt, Libya, Italy are a really special combination of trade and financial environments.
Apart from our hospitality and foreign-friendly history and tradition as a nation, we are an EU country that is obliged to have perfect relations with all its neighbours, but at the same moment, since we produce similar export products, we are also competing them. For example, although we have really old and strong trading bonds with Turkey, we are also competing in agricultural exports and others. A similar situation is valid with most of our neighbours. To some neighbours like N. Macedonia, Bulgaria, Serbia, Kosovo, we even offer our ports and services with smoother transit paths and operations!
Greece is coping well so far, and the current administration is taking steps to stabilise things and appeal to more investments. New companies and new productions are coming up in Greece, improving its export outlook and improving imports too. For sure the rate market doesn't help in increasing the imports so much within the past year, especially from Asiatic countries. But the import from other origins is increasing and we see that the demand is still strong – which is a good sign. The Greek market is not huge, we are something like 1000 forwarding companies, for 15 million people. These are only the freight forwarders…Greeks are almost number one in private owned shipping and ship management. Along with tourism, shipping is one of our core businesses. These two are the fundamental keystones of our economy.
So, in general, the competition is super strong but so are the relationships and cooperations.There is balance in the “neighbourhood”. After two decades in the market, I am still surprised to see that there is room to grow more. The market and way of doing business changes constantly. New challenges everyday - new business opportunities.
NSRN: From our previous conversations, we understand that Arian Maritime also engages with a lot of cross trades. Can you tell us a bit more about the dynamics and how Arian is working together with customers on this?
Philemon: Cross trading business is for someone who can cope with it. It is not so easy since you need to be alert and able to solve matters almost 20hrs per day. Being in the international freight forwarding business actually pushes you to serve clients who have business outside your home country, the same way you would serve them if they were local.
If you offer a good level of service, then you are pushed by the market itself to offer more. It is not something magical or extraordinary these days; it used to be 10-15 years ago, but not anymore due to the existing online tools. The covid-19 situation has also moved and pushed many lines to improve their systems to operate without a physical presence. Clients need speed and effectiveness. It makes no difference to them where you are located as long as you get the job done. We are in this “bigger game” successfully so far and we are preparing the grounds to expand more in the future years.
NSRN: There is also a growing interest in rail freight for the Port of Pireaus. Apart from being a strategic location, it has the potential to transform into a multimodal hub. What steps are Arian Maritime taking to diversify into the rail freight sector as well?
Philemon: Arian Maritime is already in discussions to get space inside Pireaus terminal or in the logistics park which also serves rail. We are already outstanding in the combination of ocean and trucking, but we miss rail. It will come. One of the reasons we have joined the New Silk Road Network is because we would like to be one of the first and most competitive companies in the ocean-trucking and ocean-rail combination business.
NSRN: As we are slowly entering a post-pandemic world, what does the future hold? In general, what are now common notions in the world of logistics that one could not imagine a few years ago?
Philemon: Allow me to tell you what impresses me more. One thing is that I never expected the freight levels to reach such height. The second thing is that I never expected that many of our clients who were so accustomed to bargaining, would pay thousands of euros without blinking an eyelid in danger of losing the season or staying out of stock.
The third thing that surprises me is that we all have so much trouble finding space. So I often find myself asking where space is? Where are the containers? What happened to all the vast vessels? Are they all congested? What's going on? I am still questioning myself. We discuss these matters during our meetings with cooperates, competitors and clients; there are video explainers on Youtube, various campaigns, articles, etc. I have seen and read most of them. But when I ask these questions, I still cannot believe that this is indeed happening. I still haven't processed it and luckily I don't have the time to do so because the challenges are huge and keep us occupied severely with little time to think too much and go crazy in the end!
The fourth thing that personally impresses me- by being an almost “18hour person” most of the time- is that I see most of our cooperates are getting into this time frame as well. Before Covid-19, it was typical, to know that I could send a message and then expect to hear from them 12 hours later. But now I see everyone replying almost the same moment they receive the message! Even if it is after-hours, or completely out of their time zone and usual working hours!
So yes, the increase in freight and the clients reaction, the situation about space and the way people go about business now, these four things were the most strange for me to witness. I had never expected the crisis to be so effective and this is the first global one that our age witnesses. It was initially expected that there would be a huge crisis of cargo, but the market and trends proved this expectation really wrong. Many factors are responsible for this, such as the changing trends in purchasing, online operations, in some economies more money to spend as people could not go out and so on. These are some crazy times that we are all witnessing, but I still have the feeling that we will all get out of it stronger and with a different approach towards our fellow people and business.