As the chaos created in the global supply chain by the Red Sea crisis, which started with the Houthi attacks on merchant ships in Yemen, grows, Turkish industrialists, whose exports have been disrupted, are knocking on the doors of logistics companies demanding alternative routes. Logistics sector representatives took action to open a Ro-Ro line to Egypt.
The board members of the International Transportation and Logistics Service Providers Association (UTIKAD) made important statements regarding the current developments in the sector at a meeting held in Istanbul yesterday. Turgut Erkeskin, President of the International Federation of Freight Forwarders Associations (FIATA), also attended the meeting. One of the important agendas of the meeting was the Houthi attacks on merchant ships in the Red Sea, which have been going on for more than a month.
A new crisis in the global supply chain was triggered when shipowners, due to the attacks, had to navigate the Asia-Europe sea route through the Cape of Good Hope instead of the Suez Canal. The change in the route extended the shipment time by more than two weeks, while the sea freight also increased rapidly. The impact of these developments on Turkey’s foreign trade, both on the import and export sides, continues to increase.
It may cause an empty equipment crisis
UTIKAD Chairman Bilgehan Engin said that since the beginning of the crisis, approximately 900 ships that were supposed to pass through the Suez Canal have turned their route to the Cape of Good Hope, and that this situation has caused significant disruptions in the global supply chain. “We are observing the process. How long the crisis will last is important. As long as the problems continue, we may experience similar situations we experienced during the pandemic. Both the disruption of the supply chain and the empty equipment crisis may come to the agenda. Freight may also rise more,” Engin said. Engin stated that UTIKAD is closely following the process and that they will continue to share information in order to inform the parties on the issue.
Ro-Ro line to Egypt on the agenda
Aysem Ulusoy, UTİKAD Board Member Aysem Ulusoy, who is also the Chairman of the Logistics Business Council of the Foreign Economic Relations Board (DEİK), said, “Our industrialists who export especially to countries such as the United Arab Emirates, Jordan and Saudi Arabia are experiencing very serious problems. Since the industrialists cannot sell their products, the warehouses are full.” Stating that the industrialists are in search of alternative solutions, Ulusoy said, “While our industrialists call us and express their problems, they express that they are in search of alternative solutions. We are also conducting an intensive meeting traffic to produce alternative solutions. As one of these alternatives, we have put the opening of a Ro-Ro line to Egypt on the agenda. We will request support from the government on this issue.”
UTIKAD officials stated that fresh fruit and vegetable exports from Turkey to Jeddah were also disrupted.
Local shipowners turn to China
UTIKAD Board Member Baris Dillioglu said that with the onset of the Red Sea crisis, some local shipowners withdrew their ships from the Russia line and shifted them to the China-Europe line. “Shipowners find the China-Europe line more profitable due to the rapid increase in freight rates,” Dillioglu said. Medkon also decided to use a ship it had ordered for the Far East on the China-Europe line.
Turkey needs more allied countries
FIATA President Turgut Erkeskin emphasized that in global trade, procurement from allied countries has become more important than procurement from neighboring or ‘friendly’ countries and said, “Turkey should increase the number of allied countries to increase its share in the global economy.” Erkeskin stated that different routes and new routes are an opportunity that should be utilized for the logistics sector and Turkey should definitely take part in the newly planned trade corridors. Erkeskin stated that Turkey should definitely take an active place in the Central Corridor, and that this would increase the competitiveness of even small and medium-sized companies. Erkeskin emphasized that costs would decrease in this direction, that negotiations should be held with other countries connected to the Central Corridor for infrastructure, that Turkey should definitely support private sector initiatives and that it is important to establish a free competition environment.