The Cost of Waiting at Ports: 5 Billion Dollars!

Long waiting times at ports are imposing significant costs on exporters. Rıza Mehmet Korkmaz, the General Manager and CEO of ÜNSPED Customs Consultancy, highlighted the issue by saying, “Waiting times at ports alone result in an additional cost of 4-5 billion dollars. This is just for exports; there is also the import side to consider.”

Customs consultants play a crucial role in efficiently managing foreign trade. Currently, 92% of Turkey’s foreign trade operations are conducted through customs consultants. In the latest episode of How’s the Economy TV on YouTube, we discussed important topics such as the role of customs consultants, taxes, waiting times, import-export procedures, and customs warehouses.

Rıza Mehmet Korkmaz emphasized that foreign trade is becoming increasingly complex and pointed out that the role of customs consultants has grown significantly as a result.

Waiting Times Are Burdening Exporters

Korkmaz stated that they are expecting improvements from the government in three key areas to make foreign trade more efficient, summarizing them as follows:

• Reputation Advantage: Ensuring easier visa procedures for exporters and logistics workers to avoid travel difficulties between countries.
• Cost Advantage: Reducing additional costs such as customs duties and port fees.
• Time Advantage: Reducing waiting times and eliminating logistical barriers so that exporters can deliver their goods on time.

Four Days of Waiting Equals Half a Percent of Customs Duty

Korkmaz stressed the substantial costs caused by long waiting times at ports, explaining:

“We are in a situation where 4 days of waiting equals half a percent of customs duties. If you delay shipping your product by a week, you will lose that market. It adds an extra 15% cost. Your costs increase, and you lose the market. Therefore, speed is crucial. Particularly in exports, delivering goods on time is essential. To achieve this, there should be no issues with the vehicles transporting the goods or with the drivers’ visas. Turkey handles around 13 million containers annually. According to the Ministry of Trade's analysis, these costs range from $350 to $650. Based on calculations, waiting times at Turkish ports alone result in an additional cost of 4-5 billion dollars. This is just for exports; the import side is also a factor.”

How Will US Tax Policies Affect Turkey?

Korkmaz pointed out that China would be the most affected by the US’s additional customs duties but also raised potential risks for Turkey:

“The US is the world’s largest importer, accounting for about 25% of global GDP. Therefore, countries that trade with the US will be significantly impacted by these new regulations. If the European Union also begins applying similar taxes, a more challenging period in foreign trade is ahead for us. Turkey could also be seriously affected. Additional taxes of about 10% are expected on key export products such as textiles, automotive, chemicals, and plastics.”

Korkmaz added that Turkey is one of the most active countries in reducing imports and summarized:

“Currently, additional customs duties are applied to more than 4,000 products. Furthermore, over 3,000 products are subject to surveillance. While these policies reduce the foreign trade deficit, they may undermine exporters’ competitiveness in the long term. If Turkey continues to impose strict import measures, other countries may apply similar restrictions on Turkish goods. This would increase the risk of losing new markets for our exporters. At the moment, there is a balance, and it is important to maintain that balance carefully.”

Turkey Could Become a Global Trade Hub Through Re-Export

Rıza Mehmet Korkmaz emphasized that Turkey, due to its strategic geographical location, has significant potential to become a re-export hub in global trade:

“However, to achieve this, new logistics centers need to be established, and warehouse capacity must be expanded. Currently, the existing warehouses in Turkey are nearing full capacity, and without new investments, it will be difficult for them to meet the growing trade volume. Poland has made substantial investments in warehouses, creating a capacity of over 10 million square meters and becoming one of the region's hubs. Countries like the Netherlands, the UAE, Singapore, and Hong Kong earn nearly half of their exports through re-export. As trade revives, the existing warehouses will be insufficient and need further development. We believe that if logistics centers in Turkey are built with private-sector involvement, Turkey could become a re-export hub. Additionally, if we establish specialized LME (London Metal Exchange) warehouses in Turkey for LME-listed products, it could provide significant cost advantages for imports while offering great opportunities for our exporters.”