PPA: Intense Concern about the Red Sea Crisis

Intense concern seems to be held by the Chinese major shareholders of the Piraeus Port Authority ( ) for what is happening in the (Huthi attacks on ships) which burden the financial figures of PPA and the prospects of the proposed one, at least for the duration of the crisis in Red. According to what is stated in the financial reports of the PPA administration, the port of Piraeus, based mainly on transit consignments from Asia due to distance from the European Union production centres (EU), could lose competitiveness and a typical example is the avoidance of ships through the Red Sea. The recent geo-economic instability by avoiding crossing Red by the majority of container transport companies and Africa’s enclosures increase transport costs. As the PPA admits, the interruption of the crossing of ships from the Red Sea and the reroute with the circumnavigation of Africa from Asia for Europe (and vice versa) instead of the Mediterranean affects Piraeus’ geographical advantage as the first continental port of the EU after crossing the Suez Canal. In particular, the African complex has led all container transport companies not only to rearrange the routes, but also to examine alternative ports as transhipment sites, as it makes it more efficient to enter ports at the western end of the Mediterranean and to supply the eastern Mediterranean via feder ships. The administration of the PPA “sees” and some scenarios regarding the duration of the crisis and the impact. In the most likely, according to the PPA, with a weighted probability of achieving 65%, the situation will be normalised within the second half of 2024 with a negative effect on growth rate for 2024 (-21.6% compared to 2023). A scenario with a probability of 25% says that the situation will improve in early 2025 having a negative effect of 32.5% on growth rate for 2024, while a 10% probability exists for normalization from early 2027 with a negative effect on growth rate for 2024 of 32.5%, 2025–19.7% and 2026–12.8% compared to 2023. The modification of the container transhipment and distribution network cannot take place within a very short period of time and has economic costs. Consequently, the impact on the company’s economic size and service volumes through the Pier terminal I in Piraeus will depend on the duration of instability in the Red Sea as well as on the degree of reordering of networks which cannot be implemented directly.