Drewry has reported that economic turmoil in Turkey, Europe’s fifth largest importer of goods from Asia, could jeopardise rising freight rates between Asia and the Mediterranean.
The global shipping consultancy has found that despite weaknesses in the Asia to Europe trade lane, the first quarter of 2018 witnessed Mediterranean imports from the continent rise by 7%.
However, growth has stagnated in Q2, during which imports barely rose.
Neil Davidson, of Drewry, discusses new developments at the Port of Long Beach in a recent Port Technology technical paper
Drewry stated: “…the chances of an immediate upturn look slim, as the economic crisis currently engulfing Turkey will remove a significant chunk of demand.”
Turkey accounts for roughly 30% of East Mediterranean imports from Asia and, in Q1 2018, Turkish imports of Far East goods surged by 12%.
Since the first quarter high public debt and the falling value of the Turkish lira has prompted an economic crisis.
Westbound Asia to Mediterranean container traffic (Credit: Drewry Maritime Research)
The situation only worsened in August 2018, after US President Donald Trump imposed heavy tariffs on Turkish steel and aluminium products.
Subsequently, container shipments from Asia to Turkey have plummeted, and the country is heading for recession.
Drewry has now predicted that Asia-Mediterranean trade will “struggle” to see much growth in the coming months, adding that carriers will need to adjust capacity accordingly to maintain the freight rate momentum.
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