Amid the higher costs and logistical delays that adversities in the Red Sea inflicted globally, the strategic position and importance that Türkiye and its ports hold on sea trade routes could increase further, according to an industry representative Monday.
"It is a fact that our country holds a strategic position on the sea trade routes. The adversities in the Red Sea region could enhance the importance of our country's ports and logistic infrastructure on the international level," said Erdem Sözvar, chief operating officer at Dinçer Logistics.
Speaking to Anadolu Agency (AA), Sözvar noted that the incidents in the Red Sea have brought new challenges to the global supply chains.
Since November, Iran-backed Houthi rebels have been targeting cargo ships in the Red Sea, one of the world's busiest shipping routes, in what they called solidarity with Palestinians in the Gaza Strip, which has been under an Israeli onslaught since Oct. 7.
Amid the threat of attacks, major players in the shipping industry, such as Danish logistics giant Maersk, had earlier temporarily halted using Egypt's Suez Canal, a critical waterway connecting the Mediterranean Sea to the Red Sea and a vital route for energy and cargo between Asia and Europe, turning to alternative routes. Many opted to go around the Cape of Good Hope in Africa, resulting in a longer and more costly trip.
Pointing out the strategic nature of the region as a transit route, Sözvar expressed that about 12% of world trade and 30% of sea trade between Europe and Asia pass through the Red Sea.
He noted that as a result of the disturbances, anticipated disruptions in maritime transportation have become the norm nowadays.
"Many service providers concerned about the safety of their personnel, vessels and cargo have announced they will continue their voyages via South Africa in response to this situation," he said.
He added that the change of route implies a minimum of one-week delay in delivery times and rising costs.
"One of the most significant impacts of the issue we are facing is the increase in overall fragility in the supply chain. There are considerable supply chains dependent on this region both as suppliers of raw materials and as customers," he explained.
Meanwhile, he pointed out that supply chains, especially in the energy sector, would be affected by the situation, which could lead to a surge in all types of energy costs in the future.
"From a macroeconomic perspective, if the events persist and worse, if their intensity or frequency increases, we could face serious risks such as increased inflation, economic slowdown, or increased unemployment," said Sözvar. In addition, he said that during the time "when we were already grappling with a global recession," these effects could further exacerbate the situation.
Sözvar pointed out that the events in the Red Sea would not impact only the companies using sea routes but all companies and sectors, reiterating that due to its strategic point of the region, which constitutes an integral part of world maritime trade, any negativity in the region "would directly affect these sectors."
"In addition to the maritime sector, events affecting many sectors, including energy, insurance and retail, are expected to result in a general increase in commodity prices," he noted, adding, however, that from an optimistic perspective, "both recent political developments and intense efforts by the private sector could lead to the swift resolution of the crisis and the effects we anticipate may not be as severe as feared."
Sözvar also said that these events could lead companies to increase their stock levels or seek alternative supply sources. At the same time, some companies may temporarily narrow the variety of products and services to reduce pressure on their supply chains, control costs, or create alternative supply chains to buy time.
Disruptions highlight Türkiye's potential
Stating that the crisis in the Red Sea can highlight Türkiye not only as a route but also as a production center, Sözvar evaluated Türkiye's strategic importance.
"The negativities experienced in the Red Sea region may increase the importance of our country's ports and logistics infrastructure on the international level. Our ports will be considered as an alternative to accelerate the flow of maritime trade and contribute to the development of alternative trade routes," he said.
"It can help increase our country's trade volume and economic growth," he added.
Moreover, in line with Türkiye's role as a strong player in the region, Sözvar noted that more investment is needed in technology, automation and information systems – not only in ports but also in the entire logistics sector.
"We continue our efforts both in the public and private sectors to close the gap with our Western competitors day by day. More investments make it possible to have a greater say in the international market. We are now attaching importance to developing the systems we previously obtained from abroad within our own structure," he said.
"I believe that starting to produce differentiating technologies in our country will not only create a cost advantage but also create a competitive advantage in finding solutions that create value for all sector stakeholders," he concluded.