Capacity Increase Required Due to Increased Density in Ports

Hamdi Erçelik, Chairman of the Board of Directors of the Turkish Port Operators Association TÜRKLİM, talked about the performance of the ports in 2024, the problems observed and the investments to be made in the ports. According to the World Newspaper, Erçelik;

I find the 2024 performance of our ports positive, and the numbers show this. The amount of cargo handled in ports in the first half of 2024 compared to the same period of the previous year %3,2 increased to 269 million 182 thousand tons, the amount of containers handled compared to the same period of the previous year %It increased by 11.2 to 6 million 781 thousand TEU ⁇ . The amount of cargo going from our ports to foreign ports in June compared to the same month of the previous year %With a decrease of 2.9, it was 11 million 266 thousand 49 tons.

The increase in the total cargo in our ports since February stopped in May, and continued in June. %There was a 3.5% decline. But still in the six-month total data %There was an increase of 3.2. When we look at the main reason for the slowdown in the increase, it is seen that it is due to the decrease in the amount of cargo coming to our ports from abroad in May and June. When we look at the types of loads, it is observed that the decrease in liquid loads continues. In the first half, Aliağa led the field with a trading volume of 44.2 million tons in total load, while the region has experienced an uninterrupted upward trend since the beginning of the year. In Kocaeli, which is in the second place, a total of 42.7 million tons was reached. On the basis of the port presidency in the container, Kocaeli, Tekirdağ and Aliağa port presidencies continue to increase uninterruptedly. Especially in the first half of Aliağa ⁇ da average %A significant uptrend of 35 was recorded.

How's the painting on the container front?

The slowdown in the increase in containers in Turkey, which started in May, continued in June and monthly development %3,2 increased to 1 million 137 thousand TEU. 6 months of the year compared to the same period of the year %We see a very high increase of 6 million 781 thousand TEU ⁇ ya with an increase of 11.2. Especially when we look at the global developments in containers; In addition to the Russia-Ukraine conflict, it was expected that the impact of geopolitical factors throughout 2024 would be even more negative with the impact of the Red Sea crisis. However, it is understood that the dynamics of the container market will change with the reorganization of trade routes as a result of Europe and the USA's efforts to reduce import dependence on China.

How do you evaluate the general situation of the world's ports along the line from Asya ⁇ to Avrupa ⁇ ?

The Red Sea Crisis, which broke out in November 2023, also directly and indirectly affected the Turkish maritime transport and port sector in different ways. While restrictions on access to the Suez Canal have led to delays in supply chains and increased costs, this crisis has also created significant opportunities for Turkish ports. Due to security concerns, ships' preference for the Cape of Good Hope over the Suez Canal led to a marked increase in transit freight volume at Turkish ports. Average transit container handling in Turkish ports in the first 5 months of 2024 compared to 2023 %It increased by 54.26. This further strengthened Turkey's strategic position and increased the importance of our ports in the global logistics chain.

How is your assessment of the increase in transit loads?

Energy transport has been affected by this crisis. However, despite the contraction of the trade volume of Turkish ports before the crisis, it has tended to recover thanks to the increase in transit loads with the crisis. The rise of insurance costs, along with security concerns, has led to ships being diverted to alternative routes, resulting in increased operational burdens as well as additional costs at Turkish ports. However, these costs were offset by increased demand and an increase in transit loads. In addition, the global shortage of containers has caused serious bottlenecks in ports. The difficulty of waiting for ships for a long time and finding empty containers caused disruptions in supply chains, negatively affecting production processes. Turkish shipping was also naturally affected by this global problem.

How are the major ports in Turkey affected by the current conjuncture?

Despite efforts to recover after the pandemic, vulnerabilities in the global supply chain remain. Delays occur in large ports, especially in handling, loading and unloading. Waiting times of ships in Turkish ports in 2024 compared to pre-pandemic %It showed increases of up to 20. Increased workload and container traffic at major ports create operational congestion at these ports from time to time, especially in transit containers. %An increase of 54.26% has revealed a picture of reaching capacity utilization limits in some ports. In major ports, rising demand and fluctuations in global trade have also affected handling processes.

What is your long-term perspective as a Turk?

During the crisis on a global scale, Turkish ports have become an important center of global trade, resulting in a significant increase in transit freight flows. In order to turn these opportunities into a sustainable advantage, it is critical for Turkey to strengthen its port infrastructure and invest in digitalization and automation projects and green transformation.

U.S. Container Orders Increased

Container cargo imports in the United States in August, compared to the same period last year %It showed a significant increase of 12.9 percent. Despite this rise in import volume, compared to July, which saw a 26-month peak %There was a slight drop of 3.

This increase led to congestion in major ports, reminiscent of the early days of the pandemic, when volumes exceeding 2.4 million TEU ⁇ (twenty-foot equivalent units) caused significant cargo deposits.

The International Longshoremen ⁇ s Association (ILA), which represents 45,000 port workers and operates in 36 U.S. ports, said it was ready for industrial action if no new agreement with the United States Maritime Alliance (USMX) was signed before the current agreement expires on September 30. The dispute between the two sides focuses on various disputes, including wages, benefits, and the controversial issue of automation.

A.P. Moller-Maersk, a key member of USMX, has expressed concern to clients about the increased likelihood of strikes at major ports such as New York/New Jersey, Houston and Savannah, Georgia.

The company warned that even a one-week work stoppage could lead to a 4-6-week recovery period, and the impact of the strike would increase with each passing day.

Retailers in the U.S. adjusted their strategies by anticipating potential disruptions and highlighting holiday promotions to ensure seasonal products arrive on time.

This change is partly due to the fact that the Christmas shopping season is shorter because Thanksgiving is later this year. One of the largest container shipping customers, Walmart and Target, Amazon (NASDAQ:AMZN).com ⁇ un has already made early back-to-school sales to avoid the Prime Day event.

The increase in imports is not limited to consumer products only; Trade researchers noted that increased shipments in the industrial sector also contributed to the increase in cargo volumes.

The situation at the ports has become delicate as the possibility of strikes adds pressure to the already tense supply chain.

Logistics sector and its future were discussed at LOGISTECH

LOGISTECH ⁇ Logistics, Storage and Technologies Fair, hosted by Izmir Metropolitan Municipality and organized by İZFAŞ for the third time this year, welcomes its visitors at Fuar İzmir ⁇ . During the Presidents' Session held within the scope of the fair, it was emphasized that logistics infrastructure investments should be completed in order to increase Turkey's logistics performance and its power to be a transfer center.

Within the scope of LOGISTECH ⁇ Logistics, Storage and Technologies Fair, which was organized by İZFAŞ for the third time this year between 11 and 13 September, hosted by Izmir Metropolitan Municipality, a Presidents Session was held under the chairmanship of Mihri Çelik, Deputy Chairman of the Board of Directors of IMEAK Chamber of Shipping Izmir Branch. The speakers drew attention to the importance of projects that will connect our country to global transportation corridors, especially the Development Road, and stated that the geographical advantage can be turned into a logistical opportunity with digital technology and green transformation. Turkish Airlines (THY) Cargo Sales Vice President Ahmet Kaya, International Transport and Logistics Service Providers Association (UTIKAD) Chairman Bilgehan Engin, Turkish Port Operators Association (TÜRKLİM) Chairman Hamdi Erçelik and Izmir Maritime Transporters Association (DND) Chairman Şükriye Vardar took part in the session as speakers.

⁇ Demand for air cargo increased ⁇

Expressing that the demand for cargo transportation increased with the effect of changing consumption habits and e-commerce after the pandemic, THY Cargo Vice President of Sales Ahmet Kaya, ⁇ E-commerce increased with the pandemic and was one of the main factors that revived air cargo transportation. Demand for air cargo services, especially related to last-minute deliveries and rapidly rotating stocks, has increased. Turkey's geographical position has a very important role in the supply flow. Istanbul Airport has become one of the most modern, important and largest air hubs in the world. THY has the largest flight network in the world. In addition, we play a very serious leverage role in terms of increasing Turkey's foreign trade capacity with the opportunities, quality services, growing cargo operations.

⁇ Turkey can move above its target location ⁇

Stating that developments such as the breakdown of the pandemic process in global supply chains, the concept of close supply, local production processes, what happened between China and the USA, Russia ⁇ Ukraine war, the Suez Canal incident have assigned new roles to our country, UTİKAD Chairman Bilgehan Engin said, ⁇ Europe is a very important market for Turkey in the conditions created by the pandemic in the first place, and the fragility of global supply processes assigns an important role to Turkey ⁇ . In this role, if Turkey moves in the right direction, we will benefit from this. Especially with some investments to be made on the railway side and legislative regulations to encourage and facilitate transit transportation, Turkey can both seriously cash out this advantageous position and strengthen its regional power. Turkey can go above and beyond its target in the World Bank Logistics Performance Index. Our country has an annual export of 250 billion dollars. The share we receive as logistics is shaped accordingly. Turkey should also set up its exports. In exports, it is very important that we focus on products of value that have added value, technological production, and that the customer cannot easily turn to different supply channels in terms of supply alternative in the world's own targeted market. This will have a serious multiplier effect on service exports. We also have opportunities and work to do so. We will see the fruit of this in time, but we should definitely not step back from these infrastructure works.

⁇ Digital and green transformation is very important ⁇

Hamdi Erçelik, Chairman of the Board of Directors of TÜRKLİM, touched on the importance of digital and green transformation of ports, ⁇ Turkey is a peninsula country, so we are very rich in terms of coast, but in this coastal structure, ports are quite limited. In establishing ports everywhere, the economic cost and benefit relationship is limited. That's where digitalization comes in. Existing ports need to be run more optimally, to be competitive. ⁇ What a digital country you are, there are great investments ⁇ We need to do it not so that they will applaud, but because we have no other choice. Logistics is a holistic event, we have connection with road seaway, freight, passenger, cruise, air cargo. Ports have a big role to play and that's why efficiency is so important if there's going to be a doubling in capacity. Europe calls for a green transition. Carbon taxes are coming at the border. If we don't take the right steps, we'll all be taxed together. The important thing is to find resources and complete these transformations and take a step forward. Therefore, our agenda is digitalization and green transformation. If we don't, a difficult period awaits us.

⁇ Alsancak ⁇ has a commercial port identity in the fabric of the city ⁇

Referring to Alsancak Port, Erçelik said, What will we do with ⁇ Alsancak Port, will it continue to handle cargo? There is a certain loss of cargo from Alsancak Port to Aliağa ports. It's my opinion; Alsancak ⁇ has a commercial port identity in the fabric of the city, in the direction of its continuation. While he's at it, there may be additional opportunities. I hope it ends soon too. There was talk of privatization of the whole, now focusing on a partial, half-and-half privatization. I think it would be right for the public not to withdraw their hand. Because private sector ports are also looking for a polar star. Port enterprises in the world are operated in an order in which the public tenders a usage contract after making an investment. In Turkey, it is done by the private sector. Therefore, for an alignment, I see that it is useful to have something that the public hand shows how this work is done, that we also need a reference to see our own beauty, and that it will come to a better place with mutual interaction.

We've been through a lot in a short time.

DND Chairman of the Board Şükriye Vardar also ⁇ Turkey's ports are at a level where they can compete with the world. We have four ports in the first 100 ⁇ . We have no problem with quality. Increasing capacity and efficiency, building deep water lines for larger ships, rail, road and inland waterway connections are critical.

Source of: (BYZHA) White News Agency

Crisis in global supply chains is at the door! Port workers go on strike

In India, port workers' unions have called for a major nationwide strike, demanding wage revisions and an immediate settlement of pension rights from August 28.

The strike, which involves around 20,000 workers, could further deepen the current intensity problems in Asian and European ports, negatively impacting global trade and logistics processes.

WORKERS STAGED FOR Wage AND RETIREMENT RIGHTS

The decision to strike at a meeting at the port of Thoothukudi in India's southern Tamil Nadu state came after workers failed to respond to long-awaited demands for wages and pensions.

While the bilateral wage negotiation committee established in March 2021 could not reach any solution to the demands of the workers, the previous agreement expired in December 2021.

GLOBAL TRADE IS AT DANGER

The strike threatens India's major ports, such as Chennai, Cochin and Mumbai, with an annual payload of 1.62 billion metric tons. In addition, India's exports of $437 billion and imports of $677 billion in the 2024 fiscal year increase the possible effects of this strike on global trade.

Government and port administrations are expected to consider workers' demands for salary scales, accumulated payments and protection of their current rights to prevent strikes.

Threat of strike at US ports raises cargo backup concerns

According to transport industry experts, the upcoming strike at key U.S. ports on the East Coast and Gulf of Mexico is alarming about potential cargo delays that could take weeks or months. Retail giants such as Walmart (NYSE:WMT) are among the importers that are accelerating their shipments, waiting for the September 30 deadline, when about 45,000 dockworkers could leave work.

The International Port Workers' Association, which represents these workers, has stated that it is ready to go on strike from October 1 if negotiations for a new contract fail. Analysts at Sea-Intelligence, a Copenhagen-based maritime consulting firm, warned that even a one-day strike could create a pile-up that would take four to six days to clear up. According to Sea-Intelligence CEO Alan Murphy, a week-long strike in early October could cause disruptions to continue until mid-November.

Murphy also said a two-week strike could disrupt port operations by 2025. This assessment is supported by maritime giant A.P. Moller-Maersk. A.P. Moller-Maersk noted that a one-week pause may require up to six weeks for recovery, and delays have the potential to increase every day the strike continues.

The urgency of transporting goods ahead of the strike led to a sharp increase in transport costs. Peter Sand, Xeneta ⁇ 's chief analyst, reported that the spot market price for a 40-foot container from the Far East to the East Coast of the USA rose above $10,000 in early July and rose significantly from around $2,100 in early April. Sand stressed that the risk of port strikes requires transporters to act early and decisively.

However, as the expiration date of the contract approaches, the opportunity for preventive shipments also decreases. In addition, shipping deviations caused by Houthi attacks in the Red Sea extended shipping times from Asian factories to East and Gulf Coast ports by 45 days or more. Considering this situation, Sand warned that sending cargo next week could be in vain, as goods could be stranded at sea if the strike takes place.

Reuters contributed to this article.

This article was created, translated and reviewed by an editor with the support of artificial intelligence. See our Terms and Conditions for more information.

Call for earnings: Hapag-Lloyd sails to H1 2024 with strong financials

Hapag-Lloyd, one of the leading global shipping companies, reported strong financial performance with EBITDA of approximately $0.9 billion despite the setbacks it faced in the first half of 2024. Faced with strong demand in May and June, the company took several measures to meet customer needs, including speeding up ships, adjusting its network, and ordering additional containers.

Hapag-Lloyd is preparing for the new Gemini network, which is expected to begin bookings in December. CEO Rolf Habben Jansen, addressing the effects of the explosion at Ningbo Port, stated that this will not greatly affect the operations. The company has a strong balance sheet with $20 billion in equity and $7 billion in liquidity reserves, and expects moderate transport volume growth, slightly lower freight rates, and higher EBITDA than previously expected.

Significant inferences

  • Hapag-Lloyd generated approximately $0.9 billion in EBITDA in the first half of 2024.
  • Unexpected strong demand was met by accelerated ship operations and network adjustments.
  • The company is moving forward with the Gemini network, which will start selling and bookings later in the year.
  • The balance sheet maintains its robustness with significant equity and liquidity reserves.
  • The CEO predicts moderate growth in shipping volumes and a higher EBITDA.
  • Concerns about potential port disruptions on the East Coast of the U.S. and the effects of the Ningbo explosion were addressed.

Appearance of Company

  • Hapag-Lloyd reiterated the appearance of moderate transport volume growth.
  • Freight rates are expected to be slightly lower.
  • EBITDA is expected to be higher than previously predicted.
  • The company continues to focus on network reliability and implementing its 2030 strategy.
  • Switching to the Gemini network is an important focus for the rest of the year.

Highlights from the Bear's Point of View

  • The market faces uncertainties, including possible disruptions to US East Coast ports.
  • There is a possibility of softening demand in the fourth quarter.
  • Although an explosion at Ningbo Port has raised concerns, its impact on operations is expected to be minimal.

Highlights on Ascension

  • In May and June, a strong demand was observed with the effect of stock smelting, preloading and consumption.
  • The global order book is declining but is expected to increase due to aging fleets and new environmental regulations.
  • The company's terminal business is growing and investments in fleet and new service offerings continue.

The shortcomings are

  • No specific financial issues were addressed during the interview.

Highlights in Questions and Answers

  • The CEO mentioned the increase in rental liabilities due to the need for more capacity and higher rental prices.
  • A significant portion of the order book is likely to be renewed to comply with environmental regulations and scrap old ships.
  • The CEO acknowledged growing concerns about potential strikes at US East Coast ports and proactive measures taken by customers.

In summary, Hapag-Lloyd (ticker not provided) spent the first half of 2024 with strong financial results and a proactive approach to market demands and disruptions. The company continues to focus on its strategic goals and is preparing for the upcoming launch of the Gemini network. Despite facing potential challenges such as port disruptions and market uncertainties, Hapag-Lloyd ⁇ 's leadership expresses confidence in the direction of the company and its financial health.

This article was created, translated and reviewed by an editor with the support of artificial intelligence. See our Terms and Conditions for more information.

Evacuation and loading in Iskenderun Port will start in 3 months

Limak Iskenderun International Port Authority has temporarily suspended the ship evacuation and loading operations since February 6 due to the earthquake.

During the earthquake, many of the containers overturned or slipped with severe shaking. The fire caused by the earthquake was extinguished on 13 February. In the fire, 3 thousand 670 of the 5 thousand 400 containers in the hail field were burned. It was determined that the damage conditions of the containers toppled due to the earthquake will be determined separately, and approximately 1,730 containers burned with the loads inside. Meanwhile, work continues intensively in order to return to loading and unloading operations as soon as possible after the fire disaster at Limak Iskenderun International Port Operation.

It is stated that the empty container door exit operations of the companies with empty containers in the port have been started, and after this is completed, the overturned and damaged containers will be spread to the stock area and re-stacked and damage detection studies will begin.

According to the information obtained, it is aimed to start full container door exit and internal unloading operations in Limak Iskenderun International Port in March. It is stated that after the stacking and counting processes are clarified and the full containers are moved to the appropriate area for inspection, planning will be contacted for entry to the port, and compliance with the requests for entry to the port cannot be provided except for planning.

Ship evacuation and loading operations are planned to start within 3 months at the port where the works are carried out meticulously.