Strategic location at the crossroads of continents

Strategic location at the crossroads of continents

As an island nation, Cyprus has shipping firmly embedded in its DNA and is determined to make a global footprint in the sector


With a proud seafaring tradition dating back to antiquity, Cyprus has carved itself a position as a qualified and trusted maritime center, home to Europe’s third-largest shipping registry and around 250 shipping operators that provide a full range of logistics services. These range from ship ownership and management to finance, insurance, brokerage and bunkering, as well as activities concentrated on the provision of advanced technologies for the safe and efficient operation of vessels and ports. 

Ship management is one of the sub-sectors where the country particularly excels, with 20% of global third-party ship management activity being managed from Cyprus. “This is a very sophisticated island that has all the infrastructure and professional services needed to support international businesses like ours,” comments Mark O’Neil, president and CEO of Columbia Group, a large maritime services provider.

Overall, shipping generates around 7% of the country’s gross domestic product and employs thousands of people directly and indirectly, with the Cypriot flag regarded as one of the sector’s most reputable and competitive. That is demonstrated by its inclusion on the white lists of the Paris and Tokyo Memorandums of Understanding (MoUs), two international port state control agreements that aim to eliminate sub-standard shipping operations through harmonized inspection systems in Europe and Asia respectively. “Cyprus, being the third-largest island in the Mediterranean and at the eastern edge between the maritime routes of Europe, Africa and Asia, has always attached great importance to shipping, which undoubtedly constitutes a significant pillar for the country’s economic development,” stated Shipping Deputy Minister Marina Hadjimanoli at a recent industry event. “Recognizing the importance of shipping for Cyprus, the primary objective of the Christodoulides administration is to further improve and develop Cypriot shipping.” 

Hadjimanoli also noted that the country had risen up the rankings from 13th to eighth in the Paris MoU’s latest report, due to the jurisdiction’s strong compliance with evolving global shipping standards. “As a result, Cyprus maintains a strong presence and active involvement in decisions taken by international organizations such as the International Maritime Organization, the International Labor Organization and the European Union concerning these matters,” she said.


CPA: A 50-year industry pillar

Despite the COVID-19 pandemic and war in Ukraine, the nation’s shipping sector has continued to register growth with the support of the Cyprus Ports Authority (CPA), a semi-governmental autonomous organization tasked with regulating and supervising port activities in the country, as well as monitoring marine traffic in its surrounding territorial waters. The main facilities under the CPA’s scope include Limassol Port, Cyprus’ main multipurpose port on its south coast; Larnaka Port further east, from where the CPA also supports humanitarian and foreign military vessels; and Vassiliko Port, a small industrial harbor that will soon welcome a new liquefied natural gas facility. 

The authority is celebrating its 50th anniversary this year under the motto “50 Years of Sailing and Setting Sail to New Ports and New Horizons.” Panayiotis Agathocleous, manager of Limassol Port and an industry veteran, recalls some of the challenges the CPA has experienced over those decades and its achievements in recent years. “Cyprus used to be the biggest hub in the region for transshipments, but we lost about 80% of those activities due to an embargo initiated by Turkey in the late 1980s. This introduced restrictions to vessels carrying the Cypriot flag and ones using our ports or managed by our firms, which are still enforced today,” he explains.

“We have managed to overcome this through different developments, such as using Larnaca Port as the second-largest port on the island to provide options and availability to partners. We have also created the industrial port of Vassiliko to help us in the development of a hydrocarbon industry. It’s one of the major projects of the state and a major project for us as well.

“Today, Cyprus is a safe harbor for all port and maritime activities that is in close proximity to the Suez Canal, through which most global freight is transported. We want to develop transshipment operations at our ports, so that we can serve the needs of the European market from the large consumer goods manufacturing markets of the Far East that involve shipments via the Suez Canal.”


Setting the trend in the global port industry

Away from merchant navy activities, Limassol Port handles the arrival and departure of huge luxury cruise liners and their thousands of passengers. “We are trying to develop cooperation with ports in neighboring countries because cruising in the Mediterranean requires strong cooperation between ports; it’s not a competitive activity,” Agathocleous says, adding that the cruise industry has rebounded robustly post-pandemic.

According to the CPA, the number of cruise ships calling at Cypriot ports doubled between 2019 and 2022 to around 200. That total will grow even more in the next few years as the latest generation of larger vessels start visiting the Mediterranean, meaning new port infrastructure will be required to manage the additional capacity.

 “Cyprus has the ability to become a home port for international liners in a development that would benefit the whole country, as it would open new markets and job opportunities. By 2030, 64 new cruise ships will be built around the Mediterranean and floated from east to north, from south to west. These vessels need a destination and Cyprus should be that destination, or at least one of them,” states Antonis Stylianou, chairman of the CPA. “Our ports are windows to the world. Being an island, we value that interaction with the rest of the region, the EU and globally.”

One international entity the CPA has collaborated with closely is the US Coast Guard. “We have had various inspections from the US Coast Guard to check our port security levels. Some of the measures the CPA has introduced have since been adopted by that authority as a model for their own ports, including our solutions for fencing and controlling access to people and vehicles,” Agathocleous reveals. Stylianou corroborates this statement: “We are pioneers in advancing new trends in the worldwide general port industry.”


A new green port in the Mediterranean

“As we frame the next 50 years of our organization, we are drafting the future of Cyprus in relation to our activities,” asserts Stylianou. With the shipping industry transporting over 80% of global trade volume and hence a major source of carbon emissions, a drive toward decarbonization stands high on the CPA’s agenda for that future. “Making our maritime activities more environmentally friendly and supporting the country’s green energy transition is a crucial focus for us,” confirms Stylianou. “Since Cyprus is in the EU, we need to align with the bloc regarding climate change issues and the regulations for its ‘Fit for 55’ strategy, which aims to decarbonize industry, ports and airports. We have a full plan for transitioning into the green economy — as we always say at the CPA blue is the new green.”

Part of the authority’s plan includes the building of Latsi Port, a brand new green port that is the result of a $48-million investment from the CPA’s own funds. “We aim to create the first green port in the Southeast Mediterranean. This green port in Western Cyprus will use renewable energy exclusively and will have no negative impact on the environment,” Stylianou reveals.

Another substantial and sustainable investment made this year by the authority for around $374 million is the transformation of Vassiliko Port into the main industrial port of the region. “We are expanding its port basin and the infrastructure of its quays, while abiding by green standards and fully respecting the marine environment.” The chairman is keen to attract companies to Cyprus that can provide advanced fuels for the new energy voyage that the global maritime industry is set to embark on. They might be biofuels, hydrogen or ammonia, with the latter considered a frontrunner once the next generation of marine engines have been developed. “We want to continue to be pioneers and to open new horizons in the maritime industry,” he concludes.