What Happens in Seaway Container Transportation?

43rd of Turkey IMSAD Agenda Meetings, 'What's Happening in Seaway Container Transportation?' carried out under the title

'Agenda Meetings', organized for the 43rd time by Türkiye İMSAD (Turkish Construction Material Industrialists' Association) was held online on Monday, May 31st, with the contributions of Demirdöküm. Tayfun Küçükoğlu, Chairman of the Board of Directors of Türkiye İMSAD, and moderated by Turkey İMSAD Deputy Chairman Ferdi Erdoğan, 'What's Happening in Seaway Container Transportation?' The meeting titled construction material industrialists, names from the business world and industry professionals followed with interest. The speaker of the meeting, Cihan Özkal, Member of the Board of the International Association of Forwarding and Logistics Service Providers (UTIKAD) and Head of the Maritime Working Group, shared the latest developments in world maritime transport with the participants.

Logistics has become more important than yesterday

Pointing out that there is a rapid change in international logistics, Tayfun Küçükoğlu, Chairman of the Board of Directors of Türkiye İMSAD, said: “We must understand the problems and opportunities in international logistics, where radical and largely permanent changes are experienced, and we must focus on solutions and development in a determined, patient and disciplined way, so that our country and we can permanently open the opportunity doors opened on behalf of our industry. Logistics has a very high importance in our construction industry. While achieving the highest export volume of our country with 2020 million tons of exports in 60, the decrease in our unit sales price from 0,41 dollars/kg to 0,35 dollars/kg highlights the importance of logistics even more. Our product range, the diversity of countries, the size and distance of the markets have changed, so logistics has become even more important than yesterday. We have to understand the dynamics of the rapidly changing logistics world, individually, institutionally and nationally, and focus on strong strategies.”

155 million tons of 60 million tons of exports are construction materials.

Emphasizing that Turkey is a bridge country right in the middle of a great commodity, natural resource and energy region, the moderator of the meeting, Turkey IMSAD Deputy Chairman Ferdi Erdogan, said, “Today, our country, surrounded by seas on three sides, has 8 km of coastline, all coasts belonging to a single country The Marmara Sea, which is the only example in the world with its location, the Marmara Region, which realizes almost more than half of the economy, industry and exports, and a total of 333-170 ports. We do 180 percent of our exports and 55 percent of our imports by sea. We face one face to the West, one face to the East; a bridge between the East, which has commodity and energy resources, and the West with high technology; We are in the position of a country that produces with the standards of the West and tries to compete with the prices of the East. Construction materials account for 60 million tons of Turkey's 2020 million tons of exports in 155. We make 60 percent of this export to the European continent, 60 percent to the Middle East, and the rest to Asia, America and Africa, on the other hand, we are a country that pursues being a production base. In 20, Turkey exported a total of 2020 million tons with an average unit price of 155 dollars/kg. 1,09% of our Organized Industrial Zones do not have a railway connection to the sea. On the other hand, 99% of the Free Zones do not have a connection with the sea. Our dreams aside, our real situation; We are a country that produces in the price, quality, cost triangle, energy and capital intensive, low and medium low technology industry dominates, therefore, as a country that makes light production and exports at a heavy cost; In logistics services, we have a low cost, fast working, fast transportation and an obligation to do a job right, completely and undamaged at once. We have industries and ports that live a nomadic life, especially with urbanization being faster than planning. We are trying to improve and make all these sustainable, especially technological transformation and digitalization.”

The volume of maritime transport in world trade is 84 percent

In his speech, UTIKAD Board Member and Maritime Working Group Chairman Cihan Özkal underlined that maritime transport has come to a very important position all over the world and said, “The volume of sea transport in world trade is at the level of 84 percent. 75 percent of this is done by container ships. There was an incredible increase in this transportation, especially after the 1980s. Even some cargoes that had to be sent in bulk before began to be transported in containers. It is a rapidly developing sector and its place in world trade is indisputable. There was a serious recession in sea container transportation before the pandemic. Maritime trade grew by only 2019 percent in 0,5, even below the 2018 percent growth in 2,8. "There was a sea transport that entered the pandemic under these conditions," he said.

Huge container ships waited in port, voyages canceled

Cihan Özkal explained what happened in world maritime transport during the pandemic period as follows: “The effect of the pandemic in our country started as of March 2020, and closures followed. In China, where the pandemic started, there was an incredible closure period in the same period. All production lines, logistics lines were closed, ports stopped. Especially the gigantic container ships on the East and West routes suddenly started to be unable to load with China's halt. The ships waited in the harbor or the voyages of the ships that would call at the port were cancelled. In May 2020, there were 500 flight cancellations," he said.

It took 63 days for full containers to return to China

Cihan Özkal, who stated that China made the conditions workable again as a result of the closures, but the rest of the world did not improve, said, “There were very serious closures in Europe during this process. In our geography, we started to experience important problems brought about by these closures. When the recovery took place in China, the shipowners started to load the stacked orders quickly, but the equipment was not enough. They pulled the empty containers in all ports of the world, and the individual who normally consumes one unit of product in the USA suddenly began to demand 2,7 percent of the product. In the face of increasing demand, there were over-order notifications especially to China. Shipowners turned this into an opportunity and procured enough equipment from other parts of the world, but there was another leg of this business, were the destinations ready for this? With the accumulation of huge ships in the largest import ports of the USA, these cargoes became impossible to unload. It took an average of 63 days for the full container to return to China, empty, to the USA.

Freight of 500 dollars increased to 4-5 thousand dollars

Emphasizing that there was an increasing trend in Turkey's exports in the same period, Cihan Özkal said, “As in other countries, we started to experience equipment and container shortages in our country, and we couldn't even make our normal exports. There was a demand for additional exports, but the decrease in the container volumes of the ships serving Turkey and the shortage of equipment negatively affected every sector. A freight of 500 dollars turned out to be 4-5 thousand dollars. The exporter, who was willing to pay this freight, could not find equipment this time.

Turkey creates a leap in trade volume with its strategic container line

Emphasizing that Turkey should establish a strategic container line and announce it to the world, Cihan Özkal said, “We need a flagship container line, as in the Turkish Airlines example. We think that a structure can be established in which a large share of it will be open to the private sector and the public, and a small share of it will always be supported by the state. If we implement such a structure with an investment of 4-5 billion dollars, Turkey's game plan in world trade will change completely. Turkey can reach a different position by creating a leap in trade volume with its strategic container line, and we have the knowledge and workforce to do this.”