İKMİB Held Webinar on Logistics Problems

Istanbul Chemical Substances and Products Exporters Association (İKMİB), the umbrella organization of the chemical sector, organized a webinar to address logistics-related challenges and solutions in the chemical industry. The webinar "Logistics Problems in the Chemical Sector," moderated by İKMİB Board Chairman Adil Pelister, was held digitally on 27 April 2021 with the participation of İMEAK Chamber of Shipping Board Chairman Tamer Kıran, International Transportation and Logistics Service Providers Association (UTİKAD) Board Chairman Emre Eldener, UPS Turkey General Manager Burak Kılıç, International Freight Forwarders Association (UND) Executive Board Vice Chairman Elif Savrum, İMEAK Chamber of Shipping Board Member Barış Dillioğlu, MSC Shipping Agency A.Ş. Business Development Coordinator Fatih Gider and Medkon Line Management Maritime and Trade A.Ş. Owner and General Manager Mahmut Işık. The webinar discussed the causes and solutions to logistics challenges faced by the sector in recent times, and shared information about future logistics structures and new technologies.   İKMİB Board Chairman Adil Pelister, who moderated the webinar, stated that numerous problems have emerged in global trade due to the pandemic and that exporters have started experiencing many challenges not only from the ongoing epidemic but also in foreign trade, particularly in the logistics sector. Providing information about the chemical sector, Pelister said: "Looking at the 2021 TIM Export Report, we see that the sector that conducted the most imports globally in 2020 was the chemical substances and products sector with a volume of 2.76 trillion dollars.

Based on this, we can say that the chemical substances and products sector accounted for 24.1 percent of global imports in 2020. Our country had a place in this table in 2020 with 18.3 billion dollars in exports in the chemical substances and products sector. Our sector is Turkey's second most exporting sector. It should also be added that the sector contributes by supplying raw materials and semi-finished products to many other sectors.

Our sector, which achieved 5.3 billion dollars in exports in the first 3 months of 2021, experienced a 13.8 percent increase compared to the same period of the previous year. Looking at the distribution of transport methods for our sector's products, we see that 79.1 percent is transported by sea, 17.6 percent by road, and the remaining approximately 3.5 percent by other means. In maritime transport, we face many problems such as difficulties in finding containers and ships, and ports slowing down their operations due to the pandemic. Similarly, in road transport, we faced problems such as extended waiting times at border gates and countries closing border gates due to the pandemic. In air transport, aside from pandemic-related problems, our most important challenge was transporting dangerous materials by air. As İKMİB, we partnered with Turkish Airlines Aviation Academy and UPS on international dangerous goods transport in 2019 to provide the necessary Dangerous Goods Regulations (DGR) certificate training for shipment of samples of products classified as dangerous materials in chemical exports.

To date, a total of 52 people from our member companies have received Dangerous Goods Regulations (Category 1,2,3,6) training. Discounts of up to 70 percent were provided to İKMİB members, and a total of 172 dangerous goods shipments were made using discounted air cargo under our agreement with UPS," he said.

  Istanbul and Marmara, Aegean, Mediterranean, Black Sea (İMEAK) Regions Chamber of Shipping Board Chairman Tamer Kıran stated that maritime transport is essential for the country's economy and the continuation of the supply chain. Noting that when looking at Turkey's seaborne foreign trade volume in tons, exports increased from 73.2 million tons in 2008 to 138.9 million tons in 2020, Kıran said: "There is an 89.6 percent increase from 2008 to 2020. Maritime imports increased by 49.5 percent, and the combined exports and imports increased from 224.7 million tons to 365.4 million tons, which represents approximately a 62 percent increase over this 12-year period. Looking at foreign trade volumes carried by container ships (TEU), we see a significant increase in both exports and imports over the last 12 years. Container transport in our foreign trade has increased from 50 million tons to 90.7 million tons in 12 years.

The daily average container ship freight rate, which was 20,575 dollars in 2008, fell to 6,367 dollars in 2009 following the 2008 crisis and only reached today's 20,000 dollar figures from the second half of 2020. Due to the new habits and new way of life brought by the pandemic, a serious demand explosion occurred in the world from April-May of last year. Demand for goods transported by container increased.

However, due to insufficient ship supply, a surge in demand for containers themselves, China's production pause due to the pandemic, container ships waiting for very long periods at American ports, and these ships' waiting times extending from 12 days to 54 days, the supply-demand situation has reversed since July 2020 and container prices have risen. In this regard, as long as supply and demand remain in this state, it should be expected that prices will continue in this manner for some time. With improvements in the supply-demand balance, decreasing demand and a return to normal, there is a possibility of a correction movement starting from 2022. Export is one of this country's salvation sectors. It brings in foreign currency, and so does transport; we are on the same side. I hope that with some ups and downs from time to time, we will all complete this task together," he said. International Transportation and Logistics Service Providers Association (UTİKAD) Board Chairman Emre Eldener emphasized that logistics providers are also service exporters and that they want to export. Stating that transporting export goods is their priority, Eldener continued: "The rise in current freight rates has put us transport organizers in a difficult position. Last year we could load 500 containers with 1 million dollars in capital, but now we can only load 100 containers. We have to constantly generate financial resources to do our work. My request to chemical sector exporters to better understand the chemical sector is to try to inform your logistics solution partners. Share what is unknown about the sector with us so that we can benefit in terms of producing solutions. We are experiencing container positioning difficulties in hot markets such as West Africa and Latin America. High figures for us are not low for others; this problem is experienced everywhere in the world. Conditions are equal. I want to emphasize that we are working together. We are experiencing this problem primarily in maritime transport. When will it recover? Let's not wait until September; it could even extend to year-end," he said.

UPS Turkey General Manager Burak Kılıç stated in his remarks that world trade has been in a serious change trend over the last 10 years and has accelerated even more in the last 1 year. Pointing out that the chemical sector is the locomotive sector of exports, Kılıç noted that dangerous material sample shipments are made by air transport worldwide and mentioned the cooperation they conducted with İKMİB in 2019.

International Freight Forwarders Association Executive Board Vice Chairman Elif Savrum said the following on the matter: "Vehicle exits at Kapıkule were 900 before the pandemic; now we have reached over 1,300 vehicle exits. At the Hamzabeyli border gate, we have daily exit numbers reaching 600. We are expecting the construction in Bulgaria to be completed in August, so we expect our vehicle exit numbers to increase to a thousand. With the completion of the mentioned construction, we anticipate an additional 300 vehicle exits for Kapıkule. Our waiting numbers are quite low. We will continue to provide all the support we can."