Increasing freight prices in exports will be the determinant of global trade in 2022. In this context, it is expected that the increase in Europe's supply from Turkey will continue.
Turkey entered the year 2022 with a new export record. The exports of 2021 billion dollars in 225.4 revealed that Turkey is seen as an important supply center during the pandemic process in which the global trade chain was broken in the world.
During this period, the trade network was strained the most by logistics and accordingly increased freight prices. However, although this difficulty had negative effects on the one hand, it also created opportunities for Turkey. Countries/companies that want to create new centers for supply and production, especially due to the freight prices from China to Europe rising to the level of 12-15 thousand dollars, turned to Turkey. Turkey, which stands out especially with its proximity to Europe, can reach this region with many transportation methods; It also increased exports from Europe. The determinant of 2022 in global trade will again be logistics and transportation costs. While it is expected that the levels reached in freight prices will be maintained for a while, there is another concern about an upward wave.
In 2021, exports to European Union countries increased by 32.98 percent compared to the previous year and amounted to 93 billion 111 million dollars, while exports to these countries constituted 41.32 percent of total exports. EU countries, England and the USA, which want to guarantee product supply due to the pandemic and move away from China due to high freight costs, will continue to put Turkey at the center. Exporters will try to use the most appropriate way throughout the year to avoid increases in transportation costs.
Is the TIR problem reflected in the price?
Tahsin Öztiryaki, President of the Istanbul Ferrous and Non-Ferrous Metals Exporters' Association (IDDMIB), which achieved one of the highest export figures of the year, emphasized that the most used mode of transportation in global trade is the sea route with containers, and said, “Of course, it is not possible to give up the sea route, but instead of containers, it is very harmful. Advantages can be obtained if the products that cannot be seen are transported in bulk. When we look at the highway, it is already quite clear that we are more advantageous than the container in our exports to the European Union. We can move forward in this way in the years to come. However, with the increase in both foreign exchange prices and oil prices, increases in transportation are also expected. In addition, difficulties in finding a driver and a car (TIR) may increase these prices. For this reason, we anticipate that this increase will continue.”
Tayfun Koçak, Member of the Board of Directors of Istanbul Chemicals and Products Exporters' Association (IKMIB), which closed 2022 as the second best sector in exports, reminded that 80 percent of world trade is transported by sea. shared the following information:
“Export from Turkey; 2000 – 3000 euros to Europe, 1000 – 1500 dollars to Asia, 4000 – 6000 dollars to Africa, 7000 – 12000 dollars to North and South America. If there is no problem caused by the pandemic during the year, we do not expect an increase in non-oil prices.”
There is an advantage over land.
Home and Kitchenware Manufacturers and Exporters' Association (EVSID) President Talha Özger stated that shipments from the Far East to the USA and Europe were severely affected, and reminded that the prices of 40-pack containers in the Far East-Europe were between 12-15 thousand dollars.
Özger said, “We predict that prices will loosen a little in the first three months of 2022 due to the Chinese New Year, but will return to their old course afterwards. Big chains have already turned their direction to close suppliers and we are using this advantage as Turkey in export. One of our advantages is that we can use land transportation for Europe and nearby countries as an alternative to sea freight in logistics. Strategies including storage and production should be developed in order to exist in distant markets.
Container fee increased 350 percent
Stating that they thought that the increase in freight prices that started due to the pandemic could continue in 2022 and that there would be no relaxation, Armatür Association Chairman Gökhan Turhan said that the slowdown in the supply chain and customs processes caused the freight prices to rise sharply, especially on the Far East-Europe line. “The World Trade Organization announced that container fees have increased by an average of 350 percent in a year,” Turhan said.