Optimistic scenario from MSC: Turkey may diverge positively in global recession


■ MSC, the world’s largest container shipping company, predicts that Turkey, which stands out in supply, will not be affected by the expected recession in global markets as much as other countries, and may even differentiate positively.

■ MSC Turkey General Manager Barış Dilek said, “We do not expect a major contraction in Turkey’s exports in the last quarter. We get this signal from many of our customers. We have increased our container stock, and we are also expanding our Turkish flagged fleet.”

MSC Turkey General Manager Barış Dilek said that despite the slowdown and recession expectations in the global markets, Turkey will be positively differentiated in this process and that the freight movement gives this signal. Dilek said, “The USA and EU do not look at the cost, they buy from Turkey instead of the Far East. Although some sectors are more affected, there are many customers who cannot keep up with their export orders.”

MSC, a Swiss family company, surpassed the Danish container operator Maersk with its investment during the pandemic period and became the company with the largest ship fleet in the world in recent months. MSC continues to make significant investments in Turkey as well. On the one hand, the company supports the project of enlarging the Tekirdağ Asyaport Port, of which it is a partner, on the other hand, it enlarges its fleet of ships with Turkish flags and strengthens its container equipment park.

MSC provides services to export giant companies in Turkey as well as globally. The company, which has a wide customer portfolio, can also receive signals that can make predictions about Turkey’s exports and imports before official data. MSC Turkey General Manager Barış Dilek said that the meetings they had with their customers and the current freight movement gave clues that Turkey will differentiate positively in the global economy in the last quarter.

Barış Dilek stated that there was a slowdown in the demand for export loads in Turkey due to the contraction in global markets, but they did not expect a major contraction in the last quarter. Dilek said, “Last week, during the talks with our customers, the business slowed down in the EU, but the order demand for Turkey did not decrease at the same rate. Because the EU and the USA have turned the route to Turkey in supply. This process, which started with the pandemic, was strengthened by the Russia-Ukraine war. The USA and the EU started to procure the products they bought from the Far East or Russia from Turkey, regardless of the cost. One of our customers was going from China to Europe for 1 million tons for a product group, now 600 thousand tons of this is bought from Turkey. “I cannot produce goods for the EU,” he said. We started to hear examples like this frequently. Our observation is that some sectors such as white goods are more affected by the slowdown in global markets. But demand is still very strong in some sectors,” he said.

Expressing that they expect the effects of the global recession to be seen more clearly as of September with the end of the holiday season, Dilek said, “Companies will look at their stocks after the holiday. He will make his purchases and planning accordingly. Therefore, the picture will become clearer in September and October.”

The star of the USA shines in exports

Stating that the demand in the USA is still strong despite the slowdown in the EU, Barış Dilek said, “The USA is the shining star. We observe that many companies invest in the European market in Turkey. Investments are made to increase production capacities. This is a very important development because the USA has been a market that we have not competed with because of China, and therefore put it in the background. Now, with these geopolitical developments and the clarification of the ranks in the multipolar world, we have started to see the effect of this on trade more,” he said. Dilek said that they do not anticipate that the impact of the expected recession will be too great for Turkey, and that it is too early to be a pessimist. MSC also takes care to use its ships on this line in the most optimum way to meet the increasing export demand to the USA.

Barış Dilek stated that one of the important issues at this point is to reduce the dependency on the EU and said, “We should not be so dependent on the EU, from which we make 60 percent of our exports, and we should go for market diversity. There are great opportunities, especially in Africa,” he said.

Learned from crisis, tripled container capacity

MSC Turkey also strengthened its equipment park in order not to experience a similar container crisis, which caused major disruptions in supply chains and experienced globally with the pandemic. Although an increase in demand is not expected as much as in the pandemic, MSC Turkey has tripled its container equipment capacity, which is 35 thousand on average. Barış Dilek said, “We are preparing for the last quarter. Frankly, our expectations are high. We enter with a very strong container stock. There is no problem as of now. Because when the demand was high during the pandemic, the investment in the container increased. Now, when there was a slowdown, those containers were wasted. There was an abundance of containers. But we are cautious. “We are prepared for times when demand can suddenly increase,” he said.

Enlarges the Turkish-flagged fleet and equipment park

MSC Global had ordered a record number of ships with the pandemic. It has become the leading company in fleet size this year, overtaking the Danish maritime giant Maersk with the ships purchased. MSC Turkey continues to invest in ships. Finally, MED Trabzon joined the fleet. Barış Dilek said, “We want to continue our investments in Turkish-flagged ships. But right now, ship prices are very high in international markets. The ship is also very difficult to find. We cannot find ships to buy, especially in small tonnage. In particular, there is a great need for 1500-2.000 TEU ships,” he said.

Getting ready to enter the healthcare industry

MSC has stepped up its investments in global markets. Finally, Mediclinic, South Africa’s third largest hospital operator, is being acquired by a joint consortium of MSC and Remgro. Mediclinic, which is planned to be acquired for approximately $4.5 billion, is considered a step taken by MSC to expand its commercial activities and enter the healthcare industry. It also operates in Switzerland, where MSC is headquartered. Increasing its investments in the field of logistics, the company continues Bollore Group’s shipping, logistics and terminal operations in Africa; it also acquired terminal operations in India, Haiti and East Timor for €5.7 billion. Bollore Africa Logistics has 250 subsidiaries and approximately 21 thousand employees in 49 countries, 47 of which are in Africa, and is Africa’s largest transport and logistics operator. The company also submitted an offer to buy ITA Airways, the new airline that was established jointly with Lufthansa to replace Italian Alitalia. MSC and Lufthansa partnership offered 1.2 to 1.5 billion euros for ITA airways.

“Don’t expect any big drop in freight”

MSC Turkey General Manager Barış Dilek also evaluated the recent decline in global freight indices, which broke historical records during the pandemic, and said, “Freight is falling, but it does not fall to 2019 figures. For this, costs need to decrease to 2019 figures. Costs are still three to five times higher than in 2019. Therefore, it is very difficult for services to continue with 2019 freights. Services are closed, we cannot find a ship to send the goods. Neither the customer nor the shipowner will pay the freight to be damaged. Currently, there is a loosening in freight in global indices. However, I do not foresee that the decline will continue at the same pace. Maybe it may increase a little in the last quarter depending on the demand. It’s good to be clear. Don’t expect a big drop in freight. Because the costs are still high, there are waiting times at the ports. Especially the strikes at many ports increase the waits,” he said.

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