Tuesday, August 28, 2018

Freight Forwarding Boss Says Multimodal Business as Usual in Turkey Despite Crashing Currency

However Many Unhappy to Deal with the Present Administration
Shipping News Feature
TURKEY –UK – Following up on our earlier piece regarding the latest rounds of tariff hikes and sanctions imposed, it is left to Davies Turner chairman Philip Stephenson, to try and put a positive spin on trading relations with one country. The independent freight forwarding and logistics outfit operates daily two-way overland and multimodal trailer services between the UK and Turkey with Turkish partner EKOL. Between them, EKOL and Davies Turner move around 70-110 trailers a week between the UK and Turkey, mainly groupage, along with sea freight containers.

Stephenson, says that the weakened Turkish lira and escalating tariff war between the US and Turkey might make life harder for British exporters but easier for UK importers. The lira of course started its slide after the US president imposed a 100% jump in import tariffs on of Turkish steel and aluminium. Naturally this tends to make Turkish exports cheaper if not on the proscribed list but of course can cause an imbalance in trailer freight movements. Philip Stephenson explains the effect thus:

“If it becomes more difficult for not only UK, but European exporters to sell to Turkey, it could put a strain on the rotation of trailers between Turkey and the UK. Ideally for Davies Turner, balanced traffic flows in both directions are best, supplemented by collecting extra southbound freight from our partners in countries in the near-continent.

“We have some longer term concerns if the ongoing financial situation has a significant impact on future foreign investment within Turkey, but we still believe the country's strong export growth will continue despite the country’s current economic difficulties.”

Together Davies Turner and EKOL provide a complex network of delivery options, EKOL, one of the few operators authorised to carry out export customs clearance at its own terminal due to its Authorised Economic Operator (AEO) status, also has a portfolio of RoRo freight services maintained by its own vessels on routes to and from Turkey, with connecting chartered block train services within Europe.

Earlier this year the Turkish headquartered group increased its RoRo sailings between Izmir in Turkey and Mete in southern France to two per week, while at the same time adding a new rail service from Mete to Zeebrugge, Belgium, offering onward connections to the UK and Sweden. EKOL also operates RoRo between Istanbul and Trieste in Italy, with connecting trains from there to Cologne and Zeebrugge, as well as train services from Sete to Paris and Battembourg.

However not everyone is happy about the continuation of trade with Turkey. Whilst this week PM Theresa May encouraged discussions with the country talking of a possible visit from the finance minister in encouraging terms, the shadow of President Tayyip Erdogan, and his actions, hang like a bad smell for many impartial observers. On September 7 Erdogan will sit down in Tabriz with Presidents Putin of Russia and Hassan Rouhani of Iran to discuss how to eliminate ‘radical Islamic groups’ in Syria.

Obviously these will not be the same groups which Turkey provided aid to in the recent conflicts (eye witnesses attest to economic support for Isis in the battle with Kurdish forces) but Erdogan remains determined to stamp out any sign of Kurdish independence and, as usual the complexities of the Syrian situation, and their effect on neighbouring countries, remain an intractable mess. The US awaits the incarcerated pastor Andrew Brunson to be freed by Erdogan, and threatens extreme repercussions should Assad resort to chemical weapons against his enemies.

The current Turkish currency crisis is however not simply a matter of reaction to US trade policy. Analysts generally agree that it was precipitated by the country’s current account deficit coupled with its foreign-currency debt and fuelled by Erdogan’s own attitude to interest rate policy, coupled with his authoritarian method of government.

As is the case with Burma, there are several states around the world in which it is ‘uncomfortable’ to business today. Turkey is rapidly rising to the top of the list with an alleged 180,000 people detained by President Erdogan, including almost 3,000 judges and a host of teachers and journalists, many charged with treasonable acts following a failed coup d'état in July 2016. The country has value as a NATO ally which even Trump acknowledges but his patience, along with many others, may be running out.

Photo: EKOL trailers can be seen loading at Davies Turner’s Dartford, Kent terminal.