top of page

Turkey's Logistics Development Based on Logistics Elements



1. INTRO

It is true that logistics is the second most promising industry in Turkey, after tourism. Turkey has a strategic location that connects the east and west. The nation access to the Balkans, the Black Sea, the Caucasus, the Caspian, Central Asia, and the Middle East as well as the countries of Northern Africa This demonstrates the significance of the Turkish logistics sector. and, in particular, the transportation sector

International and domestic land transportation, warehouse distribution, project transportation, duty-free storage, distribution to the final consumption point, and container transportation are the main services provided by logistics companies in Turkey.

Textile is the first sector to which logistics companies provide services, followed by automotive, retail-food, construction materials, and chemistry, iron-steel, and machinery, in that order.

Although Turkey's logistics industry has enormous potential, it suffers from a number of fundamental issues.

One of the industry's most serious issues is the lack of a strategic plan for the future of logistics companies in Turkey, and when one is available, it is very limited and short-term. Companies typically focus on the next one or two years. Budgets are tight, and competition is fierce.

Another critical issue is education. Because the logistics industry necessitates a wide range of skills, there is a severe shortage of qualified personnel. Many experts believe that education will be one of the most critical issues in Turkey's logistics sector in the coming years.

We should also mention that logistics companies in Turkey believe they can provide any service to any sector under any conditions. In practice, however, this is not the case. Logistics companies never say "no" to a customer's request. There is no service or industry in which they cannot provide or serve. This approach stifles the growth and progress of companies that have achieved success in a specific sector. The significance of systematic strategic planning becomes clear in this context.

Despite the fact that Turkey has natural infrastructure that could propel it to the forefront of the logistics sector due to its unique geographic location, it is unable to attract a sufficient number of investors due to a lack of physical infrastructure, investments, and qualified human resources. As a result, this enormous potential will never be realized. The protective global trade trends that peaked in the 2018-2019 period, as well as the financial problems experienced on a local level, had a negative impact on this overall trend.

1.1. Industry Overview

As intriguing as it is in the logistics industry, it is a difficult issue to quantify. Because the Transportation and Storage activity branch classification includes passenger transportation activities, presenting the size of the logistics sector in relation to the direct load is insufficient. As a result, it is largely based on assumptions in logistics industry evaluations. According to the industry and academic consensus, the logistics sector accounts for approximately 12% of GDP. It is accepted that 50% of this size is due to the activities of companies that provide direct logistics services, and the other 50% is due to the logistics activities of companies that trade goods. GDP in 2018 was 3 trillion 700 billion 989 million TL in this context. The logistics sector was estimated to be worth 444 billion TL in 2018. Although GDP data for 2019 has not yet been released, we have an estimate that we can use as a guide. According to the New Economy Program, which was released in the fall, GDP in 2019 is expected to be 4 trillion 269 billion TL. In this context, the size of the logistics sector has surpassed 2019 billion TL in 500. Also, According to Turkstat, the total number of jobs in Turkey's logistics sector in 2019 is 1,255 thousand.


1.2. Foreign Trade

When it comes to Turkey's foreign trade data by mode of transport, the dominance of maritime transport is unrivaled. Maritime transportation, which has increased its share of both export and import, is followed by road transportation, which has decreased its share from 41.5 percent to 28.5 percent in the last ten years. These two modes of transportation account for more than 90% of total volume and 71% of total import. The distinction is in the import of crude oil and natural gas via pipelines.





2. TRANSPORTATION IN TURKEY

2.1. Road Transportation

Due to its traditional role in Turkey, road transport is widely used in both domestic and international transportation. Except for the first and last stages, on-road vehicles are generally preferred in all transportation operations. The underlying reason for this preference is Turkey's impaired supply-demand balance as a result of excess fleet capacity. For example, in Turkey, the number of trucks increased from 314 thousand in 1994 to 845 thousand in 2018, representing a more than twofold increase in less than 25 years, with 673 thousand of them being used for commercial purposes.



According to Ministry of Transport and Infrastructure data from 2018, companies transporting international and domestic goods have a total fleet of 1,240,767 vehicles.



Furthermore, because the country has a more developed road network than other modes of transportation, it is possible to carry out all transportation without transit, and there is also a freight advantage compared to the railroad due to the country's excess fleet of vehicles.

Domestic passenger and cargo transportation by road is the most popular mode.

Significant investments, particularly over the last 15 years, have improved operational quality in this field.


The total road length increased by 6.7 percent between 2002 and 2019, reaching 67 thousand 333 km from 63 thousand 82 km. The length of the divided roads increased by more than five times during this process. Furthermore, the highway's length has increased from 1,714 km in 2002 to 2,159 km in 2019. This increase indicates that the proportion of highways in total main roads has increased from 2% to 4%. In addition to these investments, improvements to existing infrastructure, bridges, tunnels, and other similar investments were made to shorten roads, reduce traffic, and reduce the risk of accidents.

Located at a crossroads where Europe, Asia and Africa approach each other, Turkey is located on important corridors in terms of east-west axis transportation activities and therefore international road routes. In addition to the east-west axis road movements, these corridors pass through Turkey with the ports located in the Black Sea, Mediterranean and Aegean Seas, as well as the integration of land and sea transportation.



In international land transportation, Turkey has land borders with Bulgaria (Kapikule, Hamzabeyli and Dereköy), Georgia (Sarp, Türkgözü and Aktaş), Iraq (Habur and Üzümlü), Iran (Gürbulak, Kapıköy and Esendere), Nahçıvan (Dilucu), Syria (There are border gates of Karkamış, Cilvegözü, Yayladağı, Nusaybin, Öncüpınar and Akçakale) and Greece (Pazarkule and İpsala). Due to political and security reasons, Armenia and some Syrian highway border crossings are not actually used.



2.2. Maritime Transportation

Turkey is surrounded on three sides by seas and has sea linkages with a number of countries. Maritime transport handles more than half of Turkey's overseas trade, both exports and imports.

Local and international trade are the primary uses of maritime transportation. As of the end of 2019, it maintained its unquestioned supremacy, accounting for 62 percent of exports and 54 percent of imports. In 2002, these figures were 47 percent and 46 percent, respectively.

The volume of cargo handled at ports is increasing in general, thanks to increased foreign trade, maritime logistics, coastal shipping, and transit transport. As of November 2019, the overall volume of cargo handled had increased from 190 million tons in 2003 to 443 million tons. It is expected that 2019 will surpass 2017's record-breaking year.



Both imports and exports are extensively transported by sea in Turkey, with maritime transport accounting for 61,7% of total exports and 54,5 percent of total imports.

Ports are a major player in marine logistics. Turkey aspires to reach $500 billion in exports by 2023 and completing major port projects is one of the conditions for achieving that objective.

Currently, the country is constructing three ports in three major seas: the Aegean Sea's Çandarlı Port in İzmir, the Black Sea's Filyos Port in Zonguldak, and the Mediterranean Sea's Taşucu Container Port in Mersin.

Turkey has an 8,333-kilometer-long coastline. As a result, it's no surprise that Turkey has about 200 ports and piers, which can be classed according to their functions, such as cargo, military, fishing, or private yacht harbours. When we speak about significant seaports, we are referring to the port's capability in terms of marine trade, not its physical size.



Turkey's transhipment cargo in ports is centered in the Ambarli (cargo handling, general cargo, container, and storeroom) region, with the region's ports having the biggest volume compared to the rest of the country. Container ports account for 27 of Turkey's ports. Let's take a closer look at Turkey's top ten ports by cargo handling capacity.








2.3. Air Transportation

In 2017, the overall amount of goods moved climbed by 13.1 percent, 10.7 percent in 2018, and 10.9 percent in 2019. The acceleration caused by international transportation was responsible for the significant rise in 2017 and 2018.


The volume of the sector, which transports 3.4 million tons of weight as of the end of 2019, is predicted to increase by 13% to 3.9 million tons in 2020. This level is slightly higher than the previous year.

Turkey's market for air cargo transportation from port to port has grown to $ 3 billion. Turkish Cargo has seen the most growth in the last three years, with an increase of 80%.



The national flag carrier THY, which is the airline that flies to the most countries and destinations in the world, to 116 cities in 43 countries in Europe; 60 cities in 39 countries in Africa; 35 cities in 13 countries in the Middle East; It flies to 19 cities in 9 countries in the USA, 39 cities in 22 countries in the Far East, and 50 cities in the country

According to the data published by DGCA, Turkey had a fleet of 515 aircraft in 2018, while in 2019 it had a fleet of 546 aircraft, resulting in an increase of approximately 6%. Cargo capacity in 2009 was 1,121,108 kilograms; In 2019, this capacity grew once again and reached 2,296,450 kilograms.74. Approximately 95% of the import and export air cargo volume in Turkey is handled by UTIKAD members.



2.4. Rail Transportation



Turkey has not been able to reach a substantial volume in cargo transportation, despite the importance of rail transportation in terms of sustainability. Despite the fact that trains hauling 15.9 million tons of goods in 2002 climbed to 28.7 million tons in 2018, it should be emphasized that this statistic remains unchanged from 2014.

Railway intercity passenger transit continues to improve as a result of investments. This acceleration is expected to gather even greater power as ongoing investments and renewal projects are completed.

By the end of 2018, the number of passengers in urban transportation has increased from 55.4 million in 2014 to 76.3 million. In comparison to the 2017-2018 period, this 37.7% gain represents a 20.9 percent increase.





Passenger transportation via High Speed Train (HST), on the other hand, has not yet achieved the targeted levels, but it is growing rapidly. When it first began in 2009, the HST carried fewer than one million passengers. By the end of 2018, the figure had risen to 8.1 million persons.



There is no information about the existence of any project regarding its use. In this case, the Marmaray Tube Passage will have to be used for the railway crossing between the two continents, and freight train crossings were made from Marmaray in 2019 and 2020. On November 7, 2019, the Chang'an Train, which departed from Xian, China and went to Prague, became the first freight train to cross the European continent using the Marmaray Tube Passage. In 2020, Marmaray Tube Passage was used more intensively for freight trains; Both domestic and international freight trains used Marmaray. The 400-meter-long and 1200-tonne freight train, which carried plastic raw materials from Gaziantep to Çorlu on 8 May, passed through Marmaray and reached Çorlu on 9 May. During the period until the end of the tenth month of 2020, the total number of domestic and international freight trains departing, and arriving was 328, and the amount of freight carried by these trains reached 142 thousand tons.56. On 4 December, the first international freight train, which is the first export train to go from Turkey to Xian, China, was made and the train carrying 42 containers of white goods arrived in Xian on 19 December. On 20 December, the second export train started its journey from Çerkezköy with a load of 1400 refrigerators in 42 wagons. In 2021, it is planned to make reciprocal train services between Turkey and China twice a week.57. In the framework of the Belt and Road Initiative, Turkey's ability to be an alternative in the middle corridor for the cargoes to be transported in the east-west direction depends, first, on making the cargo movements with the least interruption. In Turkey, the Marmara Region, Izmir and Aliağa Region, Mersin and Iskenderun Ports can play an important role in transferring the cargo to be transported via the BTK Line to the seaway over Turkey.

With the operability of investments and projects such as Baku-Tbilisi-Kars railway line, Marmaray Tube Crossing, Yavuz Sultan Selim Bridge railway crossing, Turkey's load share in international railway corridors may increase, and with the development of intermodal transport in addition to east-west axis railway transport, highway connections could strengthen Turkey's position for international rail freight movements.



3. BIG LOCAL SERVICE PROVIDERS



4. FACING PROBLEMS

Turkey, despite its unique geographic location, struggles to attract enough investors due to a lack of physical infrastructure, investments, and competent people resources. As a result, this enormous potential will be squandered. The protectionist global trade tendencies that peaked in the 2018-2019 period, as well as financial challenges on a local level, had a negative impact on the overall trend.

Information in this section was compiled from the views of Prof. Dr. Mehmet Tanyaş, expert Logistics & Supply Chain Management, and Yavuz Öner, Transport Sector Leader, KPMG Turkey

Main problems of the sector under the following headings

  • The logistics industry's key issues include a lack of strategic strategies and price-driven competition.

  • In most places, there are no rules governing a free market economy.

  • The port and railway facilities are both in need of repair. It is impossible to attain scale economy.

  • The port scales are insufficient.

  • There was no way to build world-class logistics villages or centers due to a lack of training, research, standards, and certification. It is necessary to create logistics education and professional standards. The establishment of logistics service system standards is critically required.

  • International trade and logistics should be coordinated.

  • National logistical coordination was not fully realized.

  • Professional management is absent from the sector's businesses.

  • Despite beneficial changes in customs standards, logistics costs are rising (due to the usage of Custom-Customs Customs, the lack of a single border door system, and so on).

  • It was not possible to fully comply with international conventions (ATP, etc.).




5. LOGISTICS CENTERS

In the previous ten years, public and private infrastructure investments have considerably improved Turkey's logistics services. Many new airports have been constructed, and motorways have been constructed throughout the country. Furthermore, a booming high-speed train network has begun to connect key cities, and Turkish port capacity has been increased. Turkey is also constructing 21 logistics centers/villages, of which 10 have already been built, to help reduce transportation costs by providing a variety of ways of transit within these centers/villages.



Except for the logistics centers operated by the private sector, such as Ankara Logistics Base, Samsun Logistics Center, and Mersin Logistics Specialized Organized Industrial Zone, TCDD opened 10 logistics centers: Samsun (Gelemen), Izmit (Köseköy), Uşak, Istanbul (Halkalı), Eskişehir (Hasanbey), Balkesir (Gökköy), Denizli (Kaklık), Kahramanmaraş The Konya (Kayacık) Logistics Center has been constructed and is now available for business.

Kars, zmir (Kemalpaşa), Sivas, Bilecik (Bozüyük), Karaman, Kayseri (Boğazköprü), Bitlis (Tatvan), Mardin, Şırrnak (Habur), and Istanbul (European Side) Logistics Centers are still under construction.



6. 2023 MASTER PLAN

"We aspire for Turkey to become a regional logistics hub in global trade," stated Mehmet Cahit Turhan, Minister of Transport and Infrastructure, at a press conference in Ankara today. We studied field data in our Ministry's records, received comments from important stakeholders, and looked at examples of good practices around the world to determine the critical investment areas that will offer us with a competitive advantage in the short, medium, and long term."

The Turkey Logistics Master Plan is divided into three sections: transit trade income, export-oriented infrastructure enhancements, and productivity growth. The goal of transit trade revenues is to increase load demand on transportation routes in the region we're in, namely to Turkey. International trade routes on an east-west axis, such as China's "One Belt, One Road" (OBOR) project, the Trans-European Transport Networks (TEN-T) and the Transport Corridor Europe-Caucasus-Asia (TRACECA), as well as increased commercial activity between Africa and Russia in the north-south axis in recent years, all point to Turkey's high potential.

The second focus is the development of a logistical infrastructure to meet Turkey's goal of 1 trillion dollars in yearly exports by 2053. To that end, the goal is to expand the number of provinces that export more than USD1 billion, which are primarily located in Turkey's west, from 17 in 2018 to 27 in 2035 and 50 in 2053, as well as to make better use of the country's eastern areas. The cost of access to the east will be reduced by investment plans like as railways, logistics centers, and junction lines; trade is predicted to expand, particularly in provinces where the transit load passes through.

Efficiency is the third theme. Measures to reduce logistics costs in foreign trade and in Turkey will be implemented in order to give Turkey a competitive advantage in terms of exports and to allow its citizens to access more affordable products on the domestic market, as well as to prioritize investments that can be realized quickly by analyzing productivity losses. The railways would receive the largest part of investments, accounting for 75% of the total, while highways will be positioned as a complementary route of freight transportation under the 30-year plan.

The current logistics coordination board will take on a more executive role in order to carry out the investments and activities prioritized with contributions from the Turkey Wealth Fund as planned, while also assisting in the coordination of the various organizations in Turkey's logistics ecosystem around a common goal to enable the strategy's implementation.


bottom of page