$679 million of trade disruption caused by Iskenderun Port Fire says Russell
Container fire is estimated to generate $679 million in trade disruption says Russell
The container fire at the Port of Iskenderun, Turkey will cause a loss in trade of around $679 million (£562.85 million), according to Russell Group.
Further 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 6th February to 28th February 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 devasted Turkey, and as a result the port has been closed with many shipping lines postponing or diverting shipments to Mersin, one of Turkey’s largest ports.
Mersin’s trade flow during this period of disruption is estimated to be $999 million (£828 million) according to Russell’s analysis.
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.
Iskenderun, is one of the largest Turkish ports, by dollar revenue with an annual flow of $18 billion (£14.92 million) of trade in 2022 according to Russell’s analysis.
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 (re)insurers and their corporates to invest in insightful data analytics that can help them understand their exposures at any given time."