Monday, February 22, 2021

Post Brexit UK - Turkey Free Trade Deal is Working for Some

Asian Deep Sea Container Problems Give Traffic a Boost
Shipping News Feature

UK – TURKEY – When Britain departed from the EU one of the first actions of the Department for International Trade was to sign a Free Trade Agreement with Turkey. Hitherto this was subject to the EU-Turkey Customs Union, alongside agreements on agriculture and coal and steel.

The deal, like many others at this time, is controversial due to the political situation. The country is currently viewed with severe disapproval by such as Human Rights Watch (HRW) which says ‘Turkey has been experiencing a deepening human rights crisis over the past four years with a dramatic erosion of its rule of law and democracy framework.’

The agreement however has meant a boost in trade between the two countries, with benefits for to UK importers and exporters, as well as the freight forwarding and logistics companies that manage their supply chains. One such is Davies Turner which considers its overland trailer services as an important part of its operation.

Add to this the near-shoring trend in manufacturing being caused by the ongoing problems in the deep sea container shipping markets as importers turn away from Asia and look for supplies closer to home, and a rise in the trade is inevitable. Davies Turner director Alan Williams said that suppliers in Turkey can offer rapid response times for goods while freight costs are significantly lower, especially now that those container rates in the Far East to Europe trade have soared to record highs.

Williams say the cost of trailer operations from Turkey has also been mitigated by the increased use of ultra-high-capacity double deck trailers whilst exchange rates currently favour exports from Turkey to the UK, which has also helped to offset the country’s somewhat higher labour costs compared with Asia.

As ever Covid 19 has played a part in the changing face and pace of trade. Shoppers are ordering far more online during lockdown and fashion trends, a mainstay of the cotton producers in Turkey, have been radically, if unexpectedly, affected by the reaction to the pandemic. Williams explains:

“The move to a more casual at home look has seen volumes for our larger clients in some cases treble as production has moved from Asia to Turkey. Added to this is the massive increase in ocean rates from China, so we expect our clients’ volumes in this trade to continue to increase for the remainder of 2021.”

With reports of containers being stranded on the Continent for weeks or even months, Davies Turner says its overland service can offer a much more consistent journey time. It can sidestep any border delays on Turkey’s road frontier by using the ferry service from Istanbul to Trieste in Italy operated by its partner Ekol Logistics, with rail links on to Northern Europe and by truck for the final leg into the UK. Williams says the company has also been looking to make more use of regional ports as entry points into the UK since Brexit. He concludes:

“This sees us using the Channel ports a little less and moving to regional options such as Tilbury and Hull. This means we can clear on entry as well as adding a drop and swap option for larger clients, allowing a much more flexible service to our clients and helping us combat the lack of HGV 1 drivers in Europe.”