Türkiye, China and the European Union: the struggle for logistics markets, Greek shipowners and the game-changing middle corridor

The global logistics market, estimated at a value exceeding $4 trillion, has attained a level of significance comparable to that of the energy market. The market can be broadly classified into two main categories: sea and land logistics. Until recently, the two spheres developed in parallel and did not engage in significant competitive activity, as marine logistics held a dominant position.

At the present time, approximately 85% of all goods are transported by sea, primarily by container ships. This mode of transportation is advantageous due to its substantial capacity, particularly for bulky and heavy cargo. This has contributed to the accelerated growth of maritime transport. In 2024, the shipping market is estimated to have a value of USD 75.21 billion, with a projected value of USD 96.86 billion by 2029. This represents a compound annual growth rate of 5.19%. Nevertheless, some experts hypothesise that the growth in containerised sea freight volumes may decelerate or even reverse from 2024 onwards. There are objective reasons that could challenge the dominance of maritime logistics.

Sea and Land Cargo Carriage

The global ocean freight shipping market has experienced significant growth as a result of the expansion of internet usage, an increase in purchasing power, and the development of e-commerce infrastructure. The capacity to procure goods at competitive prices from any location worldwide has significantly elevated the demand for ocean freight shipping. Nevertheless, this method of shipping is not always rapid. In terms of speed, sea freight is considerably less expedient than land freight, particularly for the transportation of goods between Eurasian countries. The Middle Corridor offers a significantly faster transit time for cargo from China to Europe, with an estimated delivery window of 15-20 days, compared to the 45-65 days typically required for sea routes. In an increasingly competitive environment, the speed of delivery becomes a critical advantage, particularly in the context of the internet and social media, where consumer preferences can change with remarkable rapidity. Furthermore, there are geopolitical risks that threaten maritime shipping, given that major sea routes pass through vulnerable points such as the Suez Canal and the Red Sea. Furthermore, China, which has long been known as the 'world's workshop', now faces significant competition from India, which offers a faster shipping route to Europe by sea.

The role of Greek shipowners in the global market is another factor to consider.
The high level of maritime monopolisation is dominated by Greek shipowners, which is an additional factor that must be taken into account. For decades, Greece has been the dominant force in this area, supported by geopolitical hegemons such as the United States, the United Kingdom, and the European Union. This guaranteed Greece a dominant position in the ocean freight market. Currently, Greece retains uncontested leadership within the European Union, with a commanding 70% share of the EU merchant fleet. Additionally, Greek shipowners employ the use of "flags of convenience" in countries with minimal taxation and lax safety standards. The positions of Greek shipowners remained robust even in the context of anti-Russian sanctions. Notwithstanding the imposition of price ceilings on Russian oil, Greek companies have been observed to engage actively in grey oil transportation schemes, thereby indicating their influence and relative independence from external pressure.

China's Challenge to Greece's Leadership on the High Seas

Nevertheless, China has recently surpassed Greece to become the largest shipowner globally in terms of tonnage. The Chinese fleet has a registered tonnage of 249.2 million, representing 15.9% of the global market. China's preference for carrying its own cargoes provides it with an additional competitive advantage over Greece. A competition is underway between China and Greece for dominance in the maritime freight market, with the EU taking the side of Greece. China has placed orders for 544 vessels of the four main ship categories, whereas Greece has only placed orders for 525 vessels of these categories.

The Middle Corridor and the Beijing-Ankara Axis: A Factor Shifting the Structure of World Logistics Markets

China and its partners in the One Belt, One Road initiative possess a significant competitive advantage that could potentially alter the established norms and dynamics of the global maritime freight transport market. The Middle Corridor offers a rapid and dependable delivery system for goods in Eurasia. It is not possible for Greece, the United States or the European Union to make a similar argument.

China's partnership with Turkey, a country with an interest in the development of the Middle Corridor, is becoming a significant factor in the transformation of global logistics markets. Turkey, like other countries in the Middle Corridor, is seeking to diminish the dominance of Greek shipowners and provide new opportunities for overland communications and freight transport within Eurasia.

Elbrus Mamedov
The Director of the Information Support Centre for Azerbaijan-Georgia-Turkey Strategic Partnership.

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