Israeli importers are scrambling to find ways around President Recep Tayyip Erdogan's embargo on trade with Israel, as the government has yet to provide immediate solutions. Erdogan's decision has sent shockwaves through the trade sectors of both countries, prompting major import companies like Diplomat to issue warnings and reassurances to the stock market.
For consumers, this is certainly not good news, as imports from Turkey are relatively quick and inexpensive. Now, importers must "adapt" and reassess their logistics, with the added costs likely to be passed on to consumers.
According to industry sources, there is considerable alarm among large companies that have already ordered goods, which are now stuck in factories or ports. "Despite the shock, there is a strong desire both in Israel and Turkey to find alternative solutions to ensure the continued flow of goods," said one source. "Many have already paid Turkish suppliers they have worked with for many years. The money has been paid, the order placed, and it's now sitting in warehouses. Many Turkish suppliers are not interested in this embargo at all."
Turkey might grant a three-month extension to Turkish exporters who have already produced goods for Israel or begun fulfilling orders, according to some reports, but Turkish officials have denied this.
Goods to be routed through Eastern Europe to Israel
The Israeli shipping company iShip Forwarding has found a workaround for the embargo, creating a new logistical route where Turkish goods are first sent to third countries before being shipped to Israel. This solution allows Turkish manufacturers to continue producing and supplying goods to Israel without violating the embargo and without knowing that their products are ultimately destined for Israel. The same method can be used for exports from Israel, and the company claims that such routes through third countries already exist.
"Since no advance notice was given about the trade embargo, it created an acute problem in the industry," Eitan Ivan, CEO of iShip Forwarding, told Ynet. "There are orders that were already completed and ready with Turkish manufacturers, and there are orders that have been paid for but the goods are stuck in Turkey. Our primary goal is to rescue these shipments," Ivan added. "We received a tsunami of inquiries. As an Israeli citizen, I was shocked by the magnitude of the problem and the entities that reached out to us, including leading companies in Israeli industry and retail."
The shipping company declined to disclose through which third countries the shipments are routed, but Ynet has learned that Bulgaria and Romania are among them. While this additional step increases shipping costs, it ensures the continued flow of goods for now.
"It is indeed a more expensive process," Ivan admits, "but the potential damages from halting production lines or failing to meet commitments are far greater. We were astonished by the volume of inquiries we received, which undoubtedly reflected a real crisis. The new situation poses significant challenges for Israeli importers, who now have to seek alternative suppliers in other countries. The process of finding new suppliers and negotiating prices with them can take a considerable amount of time."
For some suppliers, this involves the entire product—manufacturing and packaging sent to Israel as a complete item. However, even when it comes to producing just the packaging, it is not a simple matter of replacing a supplier. Some importers claim it could take them at least six months to find an alternative supplier for packaging. This is because it requires time to locate a new supplier, create molds, design graphics, and conduct quality control checks.
For some companies, the transition will be easier because they are part of global conglomerates like Colgate-Palmolive, Unilever, and Procter & Gamble. These corporations sell products in Israel that are internationally branded and produced in multiple countries, making the issue seemingly less acute for them, though it still requires resources and adaptation.
In addition to consumer goods, clothing, and footwear, there is significant import from Turkey of building materials such as cement and steel, as well as electrical goods and vehicles. According to Central Bureau of Statistics data, last year, imports from Turkey to Israel totaled $4.61 billion, while exports from Israel to Turkey amounted to $1.57 billion.