Tuesday, October 9, 2018

Road Haulage Rates Almost Double Making Container Sea Freight a More Viable Option

Turkish Political and Economic Crisis Affects Choices of Suitable Modes of Transport
Shipping News Feature
UK – TURKEY – As a specialist freight forwarder with a long history of doing business with the country, John Good Shipping is one of the few logistics operations qualified to speak on the current difficult situation in which Turkish importers currently find themselves. Indeed the currency imbalance which now exists between Turkey and its regular trade partners is having an effect far beyond those who deal directly with the country.

With its own offices in Istanbul and Izmir John Good provides weekly groupage services to and from the country and, due to the fact it mainly runs services by container, as opposed to road trailer, the company says it has insulated itself from the worst effects of the currency exchange situation. A plunging lira may mean happy days for foreign holidaymakers, but the situation for the Turkish economy is far from that. Because of the political and economic situation sterling is worth around 90% more against the Turkish lira than it was in 2017.

The proclamations of President Trump mean relations between the US and Turkey are at an all-time low with the US imposing sanctions and double tariffs on imports of Turkish steel and aluminium, whilst abroad President Erdogan is viewed as a pariah, having imprisoned thousands of journalists (Turkey apparently has in custody more journalists than those currently jailed in North Korea, Cuba, Russia, and China combined) and members of the judiciary and seen his forces kill numerous protestors.

This combination of economic and political instability means that whilst exports thrive, Turkey’s imports have diminished drastically as the costs rise. This increased trade imbalance means trailers are often moving back from the UK to Turkey with no backload cargo. Road hauliers are therefore recovering this cost by drastically increasing the Turkey-UK rates. Paul Ferguson, Sales Director for John Good Shipping, commented:

“We have seen some quotes for trailers double as ultimately operators are having to cover the price of the trailer going back to Turkey empty. As such, road freight from Turkey is proving extremely challenging for a variety of reasons at present, namely significant cost increases, regular delays before trailers are available to load cargo, additional delays in transit, breaks in the chain of communication, ongoing delivery failures, groupage shipments loaded alongside unsuitable and excessive cargo and the implementation of surcharges.

”We are therefore recommending to our clients that shipping from Turkey by sea freight is a more viable option with the current market conditions, both for part load and full load movements.”

This leaves shippers with the option of air or sea freight, with the maritime option overwhelmingly the favourite for those who don’t need their cargo instantly. The sea freight route via Istanbul and Izmir offers comparatively fast transit times of little more than a week, suitable for the needs of most customers. John Good says that chronologically maritime transits are similar to current road freight transits with port to port in around 8-9 days and door to door in 14-16 days.

With Brexit looming and yet no certainty regarding transit permits through the European Union, the thoughts of many shippers will doubtless be turning toward the comparative certainty of container transport, as opposed to driver accompanied road haulage. As with any consignment, the balance between value, urgency, cost of shipping and a multitude of other factors will guide one to the best routing and method of carriage. Currently however, both for those with full loads or groupage cargo, the FCL and LCL services afforded by a containerised route to and from Turkey will often prove to be the favoured method of transit.

Photo: Aliağa container terminal, Port of Izmir.