Attacks in the Red Sea shake Türkiye industry: Supply chain and freight problems increase

While semi-finished product and raw material deliveries expected to be made in December have been Increasing attacks on commercial ships in the Red Sea raise concerns about Türkiye's supply and especially import transportation. It was reported that sectors such as chemistry and automotive supply industry were most affected by the developments in the first stage.

postponed to the end of January, it is stated that this situation may cause disruptions in production.

On the one hand, deliveries were delayed, on the other hand, it was stated that the freight for products purchased from Far Eastern countries had already increased 3-4 times. While this increase in freight costs negatively affects companies on a foreign currency basis, it is stated that the cost burden may remain on exporters, especially since exporters cannot change prices in contract sales.

Turkish Exporters' Assembly (TİM) Deputy Chairman Başaran Bayrak stated that freight rates will increase due to the expansion of routes and that this will lead to disruptions in the supply chain. Bayrak explained that they expect to be able to solve the problem in the short term: “However, the Cape of Good Hope, the alternative to Suez, is a route that requires a lot of time and money. So I think they will make arrangements very quickly and open this route. Since the closure of the Suez Canal will have a negative impact on Chinese trade, China might even resort to military action. Also, the US has sent its military ships to the region and stated that it has shot down about 12 unidentified drones.”

Freight rising fast

The developments began to be reflected in the freight indices. Drewry's World Container Index, which has fallen rapidly since the start of the year and moved upwards to some extent at the beginning of December due to seasonal effects, rose by 9 percent in the week commencing December 21, reaching 1,661 dollars per 40-foot container. In terms of the routes included in the index, the highest increase was recorded on the Shanghai-Rotterdam route. While freight rates on this route rose by 16 percent to 1,667 dollars per 40-foot container, freight rates from Shanghai to Genoa increased by 15 percent to 1,956 dollars per 40-foot container. Drewry assumes that East-West spot rates will rise in the coming weeks due to the situation on the Red Sea/Suez.