The container fire at the Port of Iskenderun in Turkey is projected to cause a significant loss in trade, estimated to be around $679 million according to data and analytics company, Russell Group.
The fire was caused by a magnitude 7.8 earthquake that hit southern Turkey near the northern border of Syria on 6 February, followed by a 7.5 magnitude aftershock that claimed more than 16,000 lives.
The earthquakes heavily impacted logistics and transport infrastructure in the region, as a fire erupted at the Port of Iskenderun in Turkey resulting in a complete stop of all operations.
As of 9 February morning, the fire at the port has been extinguished, although the port remains closed until further notice.
The analysis conducted by Russell Group was based on modelling from 6 February to 28 February 2023 and looked at the actions of major shipping companies.
The Port of Iskenderun is a significant contributor to the country’s economy, with an annual trade flow of $18 billion in 2022. It is one of Turkey’s largest ports in terms of dollar revenue and is home to numerous heavy industries, including the steel sector.
The analysis shows that the fire is expected to cause a $36.7 million disruption in iron and steel exports and $51.4 million in plastic materials imports.
During this period of disruption, Mersin’s trade flow – where most shipments are being diverted to – is estimated to be $999 million according to Russell’s analysis.
“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,” said Suki Basi, Managing Director of Russell Group.
“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.”
Russell’s figures are based on current and forecasted trade data taken from IHS Markit and Moody’s. The approach used by the company connects global trade by commodity to vessel movements and then correlates this to the business activities of all companies above $100 million.