On February 6th, 2023, a devastating 7.8 magnitude earthquake shook the region near Nurdagi, Gaziantep, Turkey. The aftermath of this natural disaster has profoundly impacted various industries, exports, and supply chain operations, not only in Turkey but across multiple countries. In this blog post, we will delve into the consequences of the Turkey earthquake, shedding light on the key industries and exports that have been affected, as well as the challenges faced by supply chains in the region.
The Widespread Impact:
The earthquake’s repercussions extended far beyond Turkey’s borders, affecting 15 countries, including Syria, Cyprus, Lebanon, Jordan, Palestine, Egypt, and more. The scale of this disaster is immense, with over 900 sites within a 249-mile radius of the earthquake’s epicenter at risk, as reported by Resilinc.
Supply Chain Disruptions and Recovery:
As the rescue operations continue amidst harsh weather conditions, aftershocks, and disrupted infrastructure, the estimated supply chain recovery time is daunting: eight months (32 weeks). This prolonged recovery period is primarily due to the extensive damage caused by multiple subsequent earthquakes, which have hindered progress.
Economic Impact on Turkey:
Turkey’s economy had steadily grown before the earthquake, driven by increased exports and tourism due to disruptions in Asian supply chains. However, the earthquake has had a significant economic impact, leading to inflation concerns and losses of $84 billion. Several major industries and exports have been adversely affected.
Textile Industry Under Scrutiny:
The textile industry, a significant contributor to Turkey’s economy, has come under the spotlight as it is the world’s fifth-largest textile exporter and the third-largest textile supplier to the EU. Thankfully, textiles are relatively easier to source from alternate suppliers compared to industries like high-tech or automotive. Undamaged textile mills are being used to house survivors, temporarily halting production.
Automotive and Manufacturing Challenges:
The automotive sector, Turkey’s largest export, has been hit hard, with renowned companies like Renault and Fiat being significant contributors. Similarly, general manufacturing suppliers have also suffered, impacting machinery and electrical equipment exports. Steel manufacturers, such as Bastug Metalurji, have suspended operations, and cement plants have also been affected.
Impact on Ports and Transportation:
Ports, airports, and railways have all been significantly disrupted. The Port of Iskenderun, one of Turkey’s largest revenue-generating ports, remains suspended due to fires, leading to the rerouting of vessels to alternative ports like Mersin. Additionally, Ceyhan Port, a crucial hub for oil exports, has suspended operations, affecting oil prices and supply chains.
Airport Disruptions and Airfreight Backlogs:
Hatay Airport and Gaziantep Oguzeli International Airport have experienced disruptions, further exacerbating airfreight backlogs caused by winter weather conditions and prioritization of rescue teams over commercial flights.
Looking Ahead:
The road to recovery for supply chains in the region is expected to be challenging, with various industries shifting operations to alternative locations. The earthquake is a stark reminder of the importance of building resilient supply chains and contingency planning to mitigate the impact of natural disasters. Mapping and monitoring the entire supply chain, including multiple tiers deep, is recommended to enhance resiliency.
In conclusion, the 2023 Turkey earthquake has left a lasting mark on supply chains and industries, emphasizing the need for robust disaster preparedness and resilient supply chain strategies in an increasingly interconnected global economy. As the recovery efforts continue, businesses and nations alike must learn from this disaster to better withstand future challenges.