Turkish shipping companies report losses due to exports to Russia

Problems with transfers from Russia to Turkey caused difficulties for Turkish shipping companies, whose ships began to stand idle due to a drop in export volumes, the Ekonomim newspaper reports, citing representatives of Turkish cargo carriers.

As the publication notes, after the introduction of sanctions against Russia, Western countries limited the export of goods to the country. Against this background, international logistics companies stopped transporting goods to Russia, and Turkish exporters replenished the fleet of sea vessels, intending to occupy the vacated niche.

However, problems with money transfers from Russia to Turkey for goods led to a reduction in exports: according to the Turkish Ministry of Trade, exports to Russia from Turkey in February decreased by 33% compared to the same month in 2023, to $670 million.

Interlocutors from among representatives of shipping companies told Ekonomim about a significant decrease in transportation volumes to Russia. At the same time, the rate of decline in freight rates has accelerated, sources said.

The CEO of one of the Turkish companies that transports cargo by sea, in a conversation with Ekonomim, drew attention to the excess supply of capacity against the backdrop of a decline in exports and transportation volumes. According to him, some of the company's vessels began to stand idle due to an imbalance of supply and demand.

“On the other hand, rising costs make it increasingly difficult for us to compete with companies that ignore embargoes, don’t pay insurance and don’t make payments,” he said.

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As Reuters sources noted , the drop in Russian-Turkish trade volumes is due to the December decree of US President Joe Biden. The document allowed the American authorities to impose sanctions against foreign banks that help carry out transactions with sanctioned persons from Russia or facilitate the supply of certain materials and equipment to the Russian military-industrial complex.

The order has made organizations more cautious for fear of losing access to the dollar, which accounts for nearly half of global financial transactions. Reuters sources cited the reason for the problems as a review of processes by Turkish banks and their tightening of requirements for Russian clients.

Russian authorities call the sanctions illegal. Moscow is holding a dialogue with Turkey regarding payment difficulties faced by Russian companies, the Kremlin said.