We spoke with Neslihan Torlak Gönençer, chair of the board of directors of the Association of Coastal Shipowners and Operators (KOSDER), about the effects of tensions in the Middle East on the logistics sector.
How are tensions in the Middle East - and particularly the risks around the Strait of Hormuz - affecting the logistics sector? Has this situation led to changes in shipping routes?
Tensions in the Middle East have turned the logistics sector into a comprehensive risk area - not merely a regional security issue - but one that impacts energy supply security, transit continuity, insurance costs, and operational planning. Developments around the Strait of Hormuz, particularly throughout March, caused significant disruptions in maritime traffic; waiting times for various ship types increased, discharge ports were changed for some cargoes, and a decline in oil shipments was observed. These developments directly impacted global maritime trade through energy costs.
While there has been an increasing shift toward alternative routes on long-haul routes, the more critical issue from our perspective is the impact of this shock on regional markets. Although the Turkish coastal shipping fleet is not directly tied to the Strait of Hormuz route, fluctuations in global markets are directly affecting the Europe–Mediterranean–Black Sea route through bunker prices, insurance premiums, and vessel positioning. This once again highlights just how critical a complementary role coastal shipping actually plays within the global system.
What trends have you observed in the freight market recently? How do you assess the current situation in terms of vessel availability and prices?
In the freight market today, we clearly see a structure where cost pressures and fragile demand are operating simultaneously. While fuel and insurance costs are pushing freight rates upward, the cargo side cannot absorb this increase at the same pace. This creates a volatile trend in the market rather than a balanced one.
The fact that the Baltic Dry Index is hovering around the 2,000-point mark as of the end of March indicates that the market is not entirely weak, but that volatility has increased. In the coastal shipping segment, tonnage has not disappeared, but the balance between the right vessel, the right cargo, and the right cost has become more critical than ever.
We are seeing that the increase in bunker costs is directly reflected in freight rates, particularly on the Black Sea and Marmara routes. This clearly demonstrates that the rise in freight rates is largely cost-driven, not demand-driven. Understanding this distinction is of critical importance for both shipowners and cargo owners.
How is the rise in geopolitical risks affecting insurance costs, delivery times, and operational planning?
The harshest and fastest impact was felt on the insurance side. We saw significant increases in war risk premiums within a short period, and coverage conditions were tightened. This situation is affecting freight rate formation and chartering decisions not only in high-risk regions but across a broader geographic area.
Delivery times are experiencing significant deviations due to delays, port congestion, and the use of alternative routes. Delays of up to 10–14 days on routes circumnavigating southern Africa are no longer the exception. This situation has become a factor directly straining the supply chain, particularly for time-sensitive cargoes like steel.
On the operational planning side, the industry no longer operates with a single-scenario approach. Multi-layered planning, involving alternative ports, alternative bunkering, alternative insurance, and different voyage calculations, has become mandatory. This clearly demonstrates that logistics is no longer just about transportation but is fundamentally a risk management business.
What strategies are logistics companies implementing to manage risks in this uncertain environment?
Based on our observations, the most common approach is not to address risk as a single, lump-sum issue, but to manage operational and commercial risks separately.
The first strategy is evident in contracts and pricing: bunker adjustment factors, the inclusion of war risk premiums in charter party (c/p) contracts, shorter charter periods, and flexible loading/unloading windows are prominent.
The second strategy involves geographic and supply chain diversification. Companies are developing alternative suppliers, loading/discharging ports, and customers to avoid reliance on a single region.
The third strategy focuses on cash flow and tonnage management. Companies that are strong in the face of short-term uncertainty are choosing to protect their position rather than charter a vessel at any price; weaker ones, however, are opting for more aggressive pricing to avoid reducing utilization rates. In the coastal shipping market, the right strategy is determined by evaluating not just freight rates, but also bunker costs, lay-up risk, payment security, and voyage duration together. Therefore, in today’s environment, simply “securing cargo” is not success in itself; securing profitable and safe cargo has become the primary criterion.
The key determinant is the ability to manage costs, risks, and payment security together. This makes the flexible and experienced operational capabilities of KOSDER members even more valuable.
What kinds of logistical challenges have emerged recently in the transportation of heavy industrial products like steel?
Steel transportation is one of the segments with the highest logistical sensitivity in the current environment. The low product margin means that even small fluctuations in freight rates can rapidly affect commercial balances.
Additionally, uncertainty regarding delivery times directly impacts production planning and inventory management. Even a delay of just a few days can lead to serious commercial consequences.
On the other hand, the direction of trade is also shifting. Regulations in Europe, risks in the Middle East, and supply pressures in Asia are making steel trade more regional in nature. At this point, the Turkish coastal fleet is becoming one of the most critical carriers of trade flows emerging in the surrounding region.
Looking ahead, what trajectory do you expect in the logistics sector and the freight market?
Current developments are making KOSDER’s strategic role within the regional logistics system more visible. As disruptions on global routes increase, shippers are turning to shorter, more flexible, and more manageable routes. This transforms coastal shipping from merely an alternative into a critical solution.
However, the sustainability of this advantage is directly linked to the fleet’s structure. The average age of the Turkish coastal fleet and fuel efficiency are no longer merely technical issues; they are factors that directly determine competitive strength.
For this reason, investments in fleet renewal, energy efficiency, and operational optimization are no longer a choice for the sector; they have become a prerequisite for remaining competitive. A more efficient and younger fleet means not only a cost advantage but also greater operational flexibility during crises.
How do you think these developments in global trade will transform the logistics sector in the long term?
We anticipate three key transformations in the long term.
First, logistics will no longer be solely about cost but will also focus on safety and resilience. Companies will begin to prioritize routes that offer the most manageable risk rather than the cheapest route. This will increase the importance of regional warehousing, local sourcing, multi-port distribution, and more flexible, protective commercial contract structures.
Second, energy efficiency and a younger fleet will become more critical. Geopolitical crises first hit bunker prices; when bunker prices rise, the competitiveness of older, inefficient vessels drops rapidly. Consequently, for the Turkish coastal fleet, fleet renewal, fuel efficiency, speed optimization, and digital operational tracking are now not just environmental but direct commercial imperatives. The rise in regional steel freight rates alongside bunker costs demonstrates that this efficiency gap is becoming visible in the market.
Third, trade flows may become more regional. The weak demand, excess capacity, and high uncertainty highlighted by the OECD in the steel sector could favor a more controlled trade model focused on nearby markets rather than aggressive long-distance expansion. For countries like Turkey, which possess both production and regional maritime transport advantages, this situation can be turned into an opportunity with the right policies.
In this environment, the advantage will lie with players who can act quickly and manage their costs with discipline.
What are your expectations for 2026?
2026 is shaping up to be a period where uncertainty has become the norm for the logistics sector. High costs, geopolitical risks, and a fragile demand structure persist.
Consequently, the sector has entered a phase where players are acting more cautiously, selectively, and flexibly. From the perspective of the Turkish coastal shipping fleet, this process holds both significant opportunities and a critical need for transformation.
In this context, we believe the most rational approach is a “wait-and-see” strategy that closely monitors developments, diversifies risks, and can take swift action when necessary - rather than pursuing aggressive growth. This approach will enable both protection in an uncertain environment and the ability to capitalize on the right opportunities at the right time.
Looking ahead, we foresee a clear market structure where more efficient, younger, and better-managed fleets will emerge as key factors shaping the direction of competition, while those unable to keep pace with the transformation will face increasing challenges.