Logistics Sector Assessment from EİB

Assessment of Logistics Sector by EİB Ege İhracatçı Birlikleri Coordinator Chairman Jak Eskinazi stated, "Today, freight rates from Turkey are at higher levels than from Italy. We will break this chain by moving together. We are working to set our roadmap." The rapid increase in global trade following the pandemic led to container shortages, insufficient vessels and equipment, and congestion at ports, while freight rates reached historic peaks. While a container shipment between Far East and Europe, which was at USD 2,000 before the pandemic, climbed above USD 10,000, the penalties imposed by shipping companies on exporters for various reasons during this period brought exporters to a point of collective action. Ege İhracatçı Birlikleri Coordinator Chairman Jak Eskinazi, Ege Maden İhracatçıları Birliği Chairman Mevlüt Kaya, İMEAK Deniz Ticaret Odası İzmir Branch Management Board Chairman Yusuf Öztürk and Assembly Chairman Kenan Yalavaç convened at Ege İhracatçı Birlikleri to assess the problems in the logistics sector. Ege İhracatçı Birlikleri Coordinator Chairman Jak Eskinazi noted that shipping companies are diverting containers to more profitable routes, and expressed major difficulties in finding containers for food and marble exports to the United States and Canada. He highlighted that the sector faces substantial penalties due to problems arising from loading onto older containers in block marble exports to China and India, and emphasized that all exporters are working on a model whereby they will act collectively for the transportation of their export products to resolve these issues. Eskinazi indicated that different options including company establishment are being considered within the model framework, and that joint action by Ege İhracatçı Birlikleri along with the Ministry of Commerce, İzmir Chamber of Commerce, Ege Region Chamber of Industry, İzmir Chamber of Commerce, and İMEAK Deniz Ticaret Odası is among the options on the table. He stated: "These institutions came together for Kemalpaşa Logistics Center. We also want to benefit from experiences at Kemalpaşa Logistics Center. 55 percent of the Aegean Region's exports exceeding USD 28 billion are conducted by sea. Today, freight rates from Turkey are at higher levels than from Italy. We will break this chain by moving together. We are working to set our roadmap."

Pilot implementation in natural stone sector

Ege Maden İhracatçıları Birliği Chairman Mevlüt Kaya noted that shipping companies have been issuing substantial invoices to natural stone exporters since the second half of 2021 due to problems occurring with containers showing metal fatigue in block marble exports to China. He stated that natural stone exporters have included the option of establishing a company to handle the transportation of natural stone exports, with Turkey's natural stone exports being conducted through this company, and that the success achieved here would serve as a model for other exporter sectors. Referring to the Turkish natural stone sector exporting thousands of containers of block natural stone to China and India annually, Kaya stated: "As the Turkish natural stone sector, we have had to pay shipping companies penalties totaling around USD 2.5-3 million over the past year. The supply-demand balance has shifted in favor of shipping companies. They are virtually renewing their container fleets with our capital. In the 2010s, shipping companies recovered the losses they incurred due to low freight rates in 2021. An international maritime shipping company announced billion-dollar profits in 2021. Shipping companies have virtually put containers up for auction. We have decided to act collectively to prevent further increases in freight rates. We have also included the matter of shipping our export products by rail on our agenda."

"We need a model"

İMEAK Deniz Ticaret Odası İzmir Branch Chairman Yusuf Öztürk noted that the pandemic disrupted balances in global trade extraordinarily, stating: "Global trade in goods and services, which contracted in 2020, increased by 25 percent in 2021. This record-level increase caused disruptions in the global supply chain, particularly in maritime transport. Unfortunately, our country's exports are also negatively affected by this situation. Some exporting companies and forwarders are attempting to ease their difficulties by purchasing vessels or investing in logistics. To support our country's economy's locomotive force—exports—urgent steps must be taken in the short term to increase our logistics performance. In the medium and long term, we need a model where Turkish carriers and shipbuilding industry will be supported with state incentives, thereby expanding the Turkish-owned and Turkish-flagged vessel fleet, and strengthening our country's ports' capacity to serve as transshipment hubs."   Source