Growing from a web-based shipping tool to a fully functional freight forwarding company, Origin Logistics, a member of New Silk Road Network from Turkey, has had a remarkable journey in a short span of time. A freight forwarding company for the new age, Origin has significant experience with technological advancements in the field of logistics and flawlessly apply them in their day-to-day business.
In this interview, we speak with Ersin Dundar, Overseas Network Manager of Origin Logistics about various critical topics that concern the industry presently. Apart from learning about Origin's large network of offices and their functioning in Turkey, we also take a dive into Turkey’s growing food export and how Origin leverages those opportunities. Finally, we also discuss the growing presence of rail freight in the region, what still needs to be done for rail freight to successfully flourish, and the effects of the pandemic in recent years.
In conversation with Mr Dundar…
NSRN: Origin Logistics was established as a part of Fevzi Gandur Group (FGL), which is a large logistics entity. How did the company begin its journey? What have been some of the achievements over the years?
Ersin: Origin Logistics is part of the FGL group. We started our journey with a web-based shipping tool company and entered logistics with information systems that clients could use to check container services worldwide. This website had succeeded and made a big splash in the market, after which the owners of FGL approached our current General Manager and company shareholder Yuksel Kahraman and offered partnership for a new brand freight forwarding company.
Fevzi Gandur has represented UASC and China Shipping Container Lines for years as their agents until they merged to become HL and Cosco and opened their own branches in Turkey. Their main activities involve shipping agency services, and under the same name, they also conduct freight forwarding activities, serving their customers in the areas of inland freight and warehousing.
Origin Logistics worked as a freight forwarder with a completely different name under the group and was established in 2013 in Istanbul. From its early days, Origin offered its customer's container shipping. The core team had experience in the shipping line side and knew how to sell containers directly to the customers, giving us ample opportunity to rapidly increase our volumes. After 3 years since its establishment, our company emerged as a strong freight forwarder with aggressive selling activities and sound market knowledge. Year by year, we established our organization in FCL, LCL, temperature-controlled shipments, project shipments, airfreight shipments, sea & air charter shipments, full and partial road shipments and finally, rail shipments. Through the years, by increasing our capacity productively, Origin Logistics was awarded "Turkey's Fastest Growing Company" two years in a row and was awarded the "Sea Freight Company of the Year" award two years in a row as well!
NSRN: In a short span of time, Origin Logistics has already developed various forwarding divisions such as sea freight, air freight, road freight, and rail freight. Apart from that, Origin also facilitates warehousing services, making it a complete logistics provider. What would you describe as the area of expertise for the company?
Ersin: Yes, we have long term contractual warehouses all across the country. Origin Logistics has seven offices and can be found in all big industrial areas; this provides us with very flexible selling and operational activities. We have dry warehouses in Istanbul where we arrange our consolidation shipments to UAE, Egypt, and Israel at approximately five containers a week. We also have contractual warehouses in Izmir and Mersin. Additionally, we have branches in Ankara, Bursa, Konya and Gaziantep, allowing us to provide speedy warehousing and contractual logistics services to our customers whenever needed. In addition, at the Istanbul Airport, our group company opened a large warehouse two years ago.
Our expertise allows us to offer all forms of transport solutions, even though we initially began with container shipments. Now we provide a large scale service network to our customers and partners worldwide. Our motto is knowledge is power, so we place importance on investing in information systems, data sharing and digital services. Now we are one of the few logistics companies in Turkey that sends offers to customers online and provides instant information of their activities, such as cargo tracking, data statistics, performances and online downloading of documents such as invoices, bills of lading etc.
NSRN: Origin Logistics has capabilities in transporting a wide range of cargo, especially food items coming under perishable and reefer shipments. Simultaneously, Origin also has strong expertise in transporting niche products such as hazelnuts, one of Turkey's biggest exports. Would you describe the various nuances of these niche areas, and how did you come to develop them?
Ersin: Food export is one of the strong arms of our country’s economy. 67% of the world’s hazelnut production takes place in Turkey. Turkey is also the centre of other niche products such as apricots, raisins, figs, dairy products, confectionery products, organic & fresh and frozen fruits and vegetables. In addition to plant-based foods, Turkey also has a large meat and egg production industry. We have big brands in poultry, fish and red meat production that export these goods worldwide. Our country covers 78% of the Middle East’s egg demand.
Origin was aware from the beginning of the importance of food export and approached customers and offered complete logistics services. We provided the best rates and operational support. We have also partnered with the world's leading food logistics companies. We have an experienced team that handles temperature-controlled shipments. We know the market, how to sell, how to proceed, as reefer shipments require special knowledge to undertake transportation steps, handle cargo, conduct stuffing, set temperature and adjust air etc. All these require solid know-how. Our team in perishable cargo understands these processes very well from beginning to end.
NSRN: Geographically, Turkey is considered the gateway to Europe and has functioned as the connector between East and West for the longest time. What strategic benefit does the geographical position provide for Origin Logistics? At the same time, what challenges does the Turkish market pose?
Ersin: Anatolia has been critical since ancient times. First, some of the earliest civilizations were established in these lands. Turkey is an important geopolitical place considering the Bosphorus and acts as a bridge between the two continents. For sea transportation, it could not be a hub, due to the other large competing ports in the Middle East and Europe. However, we could establish an alternative for our neighbouring countries, such as Greece, which has faced troubles in the past.
However, they solved their problems through a joint venture, and we missed that chance. Even then, for air freight, Turkey plays in the champions league and with the force of Turkish Airlines and a large airport such as Istanbul as the hub, our country has emerged as a leading hub in air freight, offering services to the whole world. We also have a warehouse in the airport that has been serving our customers and partners there for two years. We are very positive about the future of air freight developments in our country. There are huge traffics: multimodal or direct loads, affecting routes from Turkey to Europe or CIS countries due to increasing volumes for land transportation.
Rail connection began in the last few years but is dependent on government support and investors. In the past, there were weekly services to central European hubs, but those did not last long due to competition with land and sea transportation. However, nowadays we have established a rail connection from China and Pakistan on a weekly basis and are looking to further develop, considering global problems in sea transportation, rail freight will invite more investments in near future.
NSRN: Coming to the current topic of the New Silk Road, it is evident that rail freight is getting a boost in Turkey. What opportunities do you think will present themselves in the rail freight industry, and what are your plans to leverage them?
Ersin: We are looking for opportunities to establish more connections with an operator in Turkey, and sometimes we use rail services for our customers, but I believe that there is still a long way to go for rail transportation. First, better rates are needed, infrastructure also needs a boost, especially considering the competition (which is sea transportation) where billions of dollars are still invested in vessels, ports, digital systems and market information. It's not an easy challenge to catch up to them, but one needs to start somewhere, establish and invest more. All these challenges are directly connected to the Turkish market and rail operator, so they cannot be separated when considering to increase the market. As far as I see, the Turkish operators are doing their best to sell and support partners; however, the frequency and rates must improve. Although the container market reached ten thousand USD level for import, rail has not been the first option, unfortunately.
NSRN: The pandemic was responsible for a lot of challenges last year, including container and space shortage, rising rates, and ports locking down. We are already in the second half of 2021, and the situation persists. How did you cope with the challenges, and what can we expect for the industry in the coming few months?
Ersin: This topic has interested me for months. I am continuously following this issue and have also written some articles for a Turkish sea freight online magazine. Yes, you are right. It seems the intensity of traffic will continue until the first quarter of 2022. We are heading into high season, and it's always a painful period for finding equipment, allocations and watching the rate levels increase. If you also consider the pandemic as a disadvantage, we will be entering a very hard period. Even though we are in the holiday period for Europe and Northern countries, US West Coast ports are dealing with massive congestion and rates are still the highest ever.
The pandemic has affected us in some positive ways too since Turkey replaced the production and exportation of some countries (such as China, India, etc.) exporting to Europe and the US. But we had trouble providing shipment requests regardless of the leading freight forwarders and customers for shipping lines. We focus on targeting specific requests and keeping our good old customers satisfied.
NSRN: Finally, what are the future plans for Origin Logistics in the coming year? And how do you see Origin developing both market and service wise in the long term?
Ersin: Origin has reached 70,000 TEUs and 750 tons in air freight shipments last year. This also includes project shipments, but it has been slower because of the pandemic. This year, it seems we will reach the same levels, but if we hadn't faced such a global crisis, our expectation was of growth a minimum of 20%. So for next year, we can target at least 20% growth for both sea and air freight.
For a long time, our other target was digital investments and growth. We know the world is going there. We have to follow global trends, considering that shipping lines are investing in web tools and digitalisation. So as Origin, we will have to make more investments since web tools and digital data startups and companies are increasing. We know that logistics will continue to change and not be like what it is today.