Iskenderun Port fire to generate $679mn trade disruption: Russell
Iskenderun is one of two major shipping container ports in Turkiye & hosts heavy industries such as steel
The container fire at the Port of Iskenderun, Turkiye will cause a loss in trade of around $679 million (£562.85 million), according to Russell Group, a data and analytics company.
Analysis shows that a $36.7 million (£30 million) disruption in iron and steel exports and $51.4 million (£42.61 million) in plastic materials imports is expected to be disrupted by the fire.
"The analysis was based on modelling from a time period of February 6 to February 28, 2023, looking at the actions of major shipping companies, which are offering free cancellations, amendments and changes of destination on all shipments heading to Iskenderun, throughout February."
The port suffered a fire on Monday caused by the earthquake that has devastated Turkiye, and the port has been closed with many shipping lines postponing or diverting shipments to Mersin, one of Turkiye’s largest ports.
Mersin’s trade flow during this period of disruption is estimated to be $999 million (£828 million), according to the analysis.
Iskenderun is the one of two major shipping container ports in Turkiye’s south-eastern shores and hosts heavy industries such as steel. "Experts say that the port focuses on domestic Turkish trade, rather than having a broader regional hub role."
Iskenderun had seen $18 billion (£14.92 million) of trade in 2022, according to Russell’s analysis.
Suki Basi, Managing Director, Russell Group says: "The Iskenderun incident highlights a recurring issue in global trade whereby a single point of failure – such as a port closure – can have ripple events across supply chains. Once again, it is important in these uncertain times for reinsurers and corporates to invest in insightful data analytics that can help them understand their exposures at any given time."
"As the Port of Iskenderun remains closed until further notice, our teams have been hard at work creating contingency plans for affected customers with cargo bound for the Port – hoping to minimise the impact of the circumstances on your supply chain," Maersk says in its update.
"We will unfortunately not be able to deliver cargo currently on the water bound for the Port of Iskenderun. We will instead be holding containers in nearby ports and hubs for three weeks from today (Wednesday 8 February) at no extra cost while we plan next steps and final deliveries. Alternatively, we can deliver cargo to any Turkish port within operational feasibility and capacity constraints. This will be a free Change of Destination (COD) arrangement including re-stowage, operational and admin fees."
MSC adds in its update: "Due to current conditions, calls at Iskenderun are being omitted until operations resume. For cargo already loaded and sailing towards Iskenderun, MSC will divert shipments to Tekirdag. The same will apply for all bookings meant for Iskenderun unless customers instruct us differently.
"All booking cancellations, amendments and changes of destination, as well as demurrage at destination will be free of charge for Iskenderun bookings throughout the month of February.
"It is undetermined when operations at the port of Iskenderun will restart, but we will do our best to minimise the impact on our customers and their supply chains."
Ocean Network Express (ONE), in its update, says: "We regret to advise that the terminal infrastructure in Iskenderun has been severely damaged, and all port operations suspended. Subsequently, with immediate effect all services from/to Iskenderun are suspended until further notice.
"Terminal operations at Mersin resumed on February 7, 2023, and continue without any reported issues. The terminal is expecting to face yard congestion in the coming days due to local infrastructure damages delaying container pickups and are working with local authorities to find a temporary solution..”