Damage at Iskenderun is a reminder that ’a single point of failure’ can ripple across supply chains - Russell Group
Two major earthquakes in eastern Turkey and Syria have caused extensive disruption to Turkish air and sea terminals, threatening global supply chains.
The container fire at the Port of Iskenderun, Turkey will cause a loss in trade of around $679m, according to Russell Group. Further analysis shows that a $36.7m disruption in Iron and Steel exports and $51.4m in plastic materials imports is expected to be disrupted by the fire.
It is understood that parts of the Iskenderun port collapsed and operations were halted, with the shipping complex suffering from a series of fires on Monday. As a result the port has been closed with many shipping lines postponing or diverting shipments to Mersin, one of Turkey’s largest ports.
Plans to divert vessels
Global shipper Maersk warned that the damage was “significant”, adding it would “need to perform a change of destination for all bookings bound for the port or already on the water.
”We are currently planning to divert containers to nearby hubs within operational feasibility or hold at transhipment ports - including Port of Mersin and Port Said.”
Sealand, a division of the Danish shipping company, said it would divert Iskenderun cargo to other ports. Mersin’s trade flow during this period of disruption is estimated to be $999m, according to Russell’s analysis.
Despite plans to divert ships, industry sources told the Loadstar that they believe operations in other ports could be hit by power outages and other bottlenecks, as a result of the scale of the devastation.
The earthquakes have also left roads around the Iskenderun port area impassable, halting truck movement.
Iskenderun is the one of two major shipping container ports in Turkey’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.
Suki Basi, Russell Group managing director commented on the incident: “The Iskenderun incident highlights a reoccurring 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 their corporates to invest in insightful data analytics that can help them understand their exposures at any given time.”