C. F. Lynch & Associates

It's Greek to Me

By Clifford F. Lynch

DC Velocity, January 2006

If he lay awake at night back in 777 B.C. making mental lists of tasks to be completed before the following year’s Olympic Games, Iphitus undoubtedly ranked logistics issues closer to omega than alpha. Since there was only one event (the sprint), there was virtually no equipment to move. And although the games were open to Greeks from all over the world, a relatively small number of competitors were expected. Since word had not yet reached Iphitus about the opportunities for television contracts, sponsorships and merchandising, he didn’t have to worry about logistics complications arising from, say, the presence of TV crews.

Fast forward about 2,800 years to Athens in 2004. You have to wonder what Iphitus would have thought of the logistics challenges presented by the modern Olympic Games: receiving and storing some 12,000 SKUs – everything from DVDs and javelins to traffic cones and safes – and transporting them to 60 different venues in and around Athens.

Of course, he wouldn’t have had to do it alone. Carriers like Schenker and DHL swooped in and out of Greece, delivering international shipments. And a consortium of experts took charge of the local logistics activities. In fact, that consortium – which included supply chain consultant BLS Ltd., Delatolas Express Cargo, third-party provider Frakapor Logistics Hellas S.A. and Frakapor Holdings Ltd. – received high marks for its contributions to the Games’ success, which, not incidentally, helped raise awareness of logistics and supply chain management throughout Greece. While I usually don’t write about personal experiences, I recently had the opportunity to conduct a logistics outsourcing seminar in Athens, where I had the pleasure of meeting logistics managers from both the client and provider sides. Over a two-day period, we discussed the opportunities and issues that confront logistics practitioners in Greece, particularly in outsourcing.

Practically non-existent 25 years ago, Greece’s logistics service provider (LSP) industry received a boost from the elimination of customs taxes in 1993, which sent demand for warehouse space soaring. Even so, the market for outsourced services lags well behind the rest of the European Union. According to Alexander Horn of Schenker S.A. in Athens, the "use of 3PL services remains relatively low at nearly 10 percent."

Still, the outlook is rosy. The market is expected to grow about 10 percent annually over the next few years, says Evangelos Angelotopoulos, managing director of BLS Ltd. Big players like Schenker, DHL and Kuehne & Nagel already have a presence in Greece, and smaller regional companies are thriving.

Much of the infrastructure is already in place. Greece offers a good highway system (particularly since the Olympics). Its economy is growing, and its government offers subsidies to businesses looking to operate logistics facilities. Although the fledgling industry still faces obstacles – insiders complain about the difficulty of acquiring land and obtaining zoning changes – there appears to be no reason why it shouldn’t fulfill its growth projections.

As for the challenges ahead, the issues identified by both LSPs and their customers have a familiar ring. The LSPs worry about competing with the global providers, profitability, their ability to provide global service and marketing. Their clients fret about the cost of outsourcing, the implications of relinquishing control, technology and the availability of truly global services.

What I took away from this trip was the affirmation the U.S. logisticians are not unique. Their problems are the problems of the worldwide supply chain community. We should look to one another for answers.






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