Turkey logistics industry

1. Turkey Logistics Industry
Overview
Turkeylogisticsandwarehousingmarketdisplayedaconsistentgrowthduringthe period2013 to
2018. The growthin automotive exportscoupledwiththe risinge-commercesectorwaswitnessed
to drive the Turkey logisticsmarket. Inadditiontothis,the implementationof Vision2023 and
LogisticsMasterPlan2023 by the governmentalsoindicatesapositive outlookforthe industry. The
investmentsininfrastructure andtechnologyhave impactedthe Turkeylogisticsmarketpositively.
The leadingcompaniesinthismarketincludeEkol Logistics,NetlogLogistics,DHL,Mars Logistics,
Kuehne +Nagel,CEVA Logistics,BorusanLojistik,OmsanLogistics,PTT,YusenInci Logistics,
HellmannWorldwide Logistics,KarincaLogistics,andseveral others.
Freight
The keycontributive factorsforthe growingmarketincludedthe risingdemandforroadandsea
freightlogisticsacrossthe country. The countryisimplementingrail freightcorridors,coastal freight
corridorsand international highwaycorridorstobecome aleadinglogisticshub.
Warehousing
The growth inthe warehousingmarketwasprimarilydue toexpandingmanufacturingsector,
increase inimportedgoodsandincreasinggovernmentexpenditureonimprovinginfrastructure.The
demandforcoldstorage warehouseshaspickedupinthe pastfew years.
Courierand Parcel Market
The keycontributive factorsforthe growingmarketincludedthe increasingtrendof online
shopping.Duringthe period2013-2018, the country alsowitnessedincreasingsmartphoneusers,
internetusersandthe lifestyleof peoplewhichalsocontributedtothe growthof the courierand
parcel marketof the country.The leadingcompaniesinthismarketincludethe national postal
service – PTT as well as otherssuchas Yurtici Cargo,TurkishCargo, DHL Express,SuratKargo, and
MNG Express.
E-Commerce Logistics
The market displayedsolidgrowthoverthe pastfive years.Thiswasprimarilydue tothe rising
numberof online ordersinTurkey.Moreover,the costof logisticsservicesinthe e-commerce space
of Turkeyalsodeclinedbythe year2018. Cross-bordere-commerce hasalsogainedtractionin
recentyearsinTurkey.
Third part logistics
Almostall international logisticsplayersinTurkeyprovide 3PLservices.The marketobserveda
growthin the outsourcingof logisticsrequirementswhichhelpscompaniestofocusontheircore
area of businessandreducesthe additionalcostof operations.The growthinthe marketalso
encouragedthe emergenceof several new players.3PLisagreat way forthese companiestobe
asset-lightandyetdominate the marketbypartneringwiththe domesticlogisticscompanies,who
knowthe marketbetter.

2. COMPETITION
The Associationof InternationalForwardingandLogisticsService ProvidersTurkey(UTIKAD)
representsmore than450 freightforwardermembersofferingair,ocean,rail,androad forwarding
activitieswithatotal workforce of about50,000 employeesasof 2018. The competitioninthe
freightforwardingindustryinTurkeyishighlyfragmentedwiththe presence of bothdomesticas
well asinternational logisticscompaniesinthe country.Withthe presence of alarge customerbase
fromindustriessuchasfoodand beverage,pharmaceuticals,telecom, heavyindustries,andother
end-userverticals,the logisticsindustryisattractinghuge investments.Turkey’sgovernmentis
continuouslyincreasingitsbudgetaryallocationforthe infrastructure sector,whichwillreduce the
cost of transportationandfreightandmake way fornew entrantsinthe market. Some of the players
have startedofferingniche servicessuchasexpressdeliveryandcoldchaintoincrease itscustomer
base and remainsignificantinthe market. The growingdemandforperishable productsinthe
countrywill consequentlyaugmentthe requirementforfastdeliverytherebyhavingapositive
impacton boththe courierandparcel and coldchain marketsof Turkey.
Figure 1:Found logistic bases inTurkey
Logisticscentersthatare opentoservice – GREEN
Logisticscenterswhose stageshave beencompleted –RED
Those whose constructionandprojectingcontinues –BLUE
LOGISTIC PERFORMANCEINDEX
LogisticsPerformance Index withamaximumscore of 5 (LPI:LogisticsPerformance Index) evaluates
the logisticsperformance of countriesaccordingtothe followingcriteria.
(WorldBank):
- Logisticsinfrastructure,Efficiencyof the customsprocess,
- Qualityandcompetitivenessof logisticsservices,

3. - Deliveryontime,
- Ease of transportationorganizationat competitivecosts,
- Traceabilityof the shipment.
Accordingto "LogisticsPerformance Index (LPI);Turkey,whichranks34thin 2007. In 2012, It rose to
the 27th rank, butthere wasa decline afterthisyear.Asof 2018 TurkeyItranks 47th. Customs
criteriatookthe leadinthis decrease;atcustomsbottlenecksandcostfactorswere effective.
Shippingcriteriaandlogisticsservicesqualityhasalsodeclinedinrecentyears
Table 1: Turkey's Logistics Performance
YEA
RS
ORDE
RS
LPI
SCO
RE
CUSTO
MS
INFRASTRUCT
URE
INTERNATIO
NAL
SHIPMENT
LOGISTI
CS
SERVICE
QUALIT
Y
SHPMENT
TRACKIN
G AND
TRACABIL
ITY
ON
TIME
DELIVE
RY
2007 30 3.15 3.00 2.94 3.07 3.29 3.27 3.38
2010 39 3.22 2.82 3.08 3.15 3.23 3.09 3.94
2012 27 3.51 3.16 3.62 3.38 3.52 3.54 3.87
2014 30 3.50 3.23 3.53 3.18 3.64 3.77 3.68
2016 34 3.42 3.18 3.49 3.41 3.31 3.39 3.75
2018 47 3.15 2.71 3.21 3.00 3.65 3.23 3.63
Accordingto the data of Table 1, in2018 in Turkey,accordingto the 2016 rankingas well asall itis
seenthatthe performance criteria have regressed.
SWOT
STRENGTHS:- Strengths
- Favourable geographical locationof Turkey:Locatedinthe mostimportantareaof the SilkRoad
line, Itisa country that connectsthe continentsof AsiaandEurope andis surroundedbythe seaon
three sides.
location,
- East Marmara Region'snatural harbourarea onlandand railways,tothe bay It isimportantin
termsof the wide roadnetworkinthe countryand the road route.
Locatedabove the corridors,
The advantage of havingone of the largestcommercial vehicle fleetsinEurope, Regionallocation
advantage of ports, Effective investmentsinthe airline (DGCA:General Directorate of CivilAviation
data.
Accordingly,asof the endof 2018 a passengerandcargo airline inTurkey11 Company'stotal of 515
aircraft;486 are passengersand29 are cargo aircraft.29 belongingtocargoaircraft total cargo
capacityis 2 194 450 kilograms),

4. - Istanbul Airport,Marmaray,Baku-Tbilisi-Karsinfrastructure investments,
- Increase inroad logisticsperformance thankstonew roads,
- Europe-Asiathankstothe Marmaray Passand Yavuz SultanSelimBridge railwaylinepotential tobe
connected
Weaknesses:-
- Lack of LogisticsDatabase andlack of logisticscoordination, Inadequacyof the railwaynetworkand
infrastructure, Lackof informationtechnologiesandnotbeingable toadaptto developing
technology, Highinvestmentandoperatingcosts
- Unplannedurbanizationandunplanneddistributionof logisticsunitswithinthe country inthe field
of transportation the routes passingthroughcity centresandthe congestioninroadtransport, Long
bureaucraticprocesses,excessive export/importformalities.
-
- Highwaitingtimesatports andterminal, handlingandwarehouse services costs,
- Lack of sufficientstandardsinthe logisticssectorandtraining,
- Barriersto macroeconomicstabilityandnon-tariffdue tohighinflation poorperformance inthe
fieldof the goodsmarketdue to
- Lack of coordinationbetweenlogisticscompaniesande-commerce companies,
- The competitioninthe sectorismore price-oriented,
- The lownumberof customsgates andtheirlow capacity.
Opportunities
- Increase inelectroniccommerce volume worldwide, Advancesindigitaltechnologies.
- Directingthe trade volume todevelopingcountries, Wide networkinthe aviationindustry,
Experience inroadtransport.
- Beinginthe centre of an area withlarge trade volume andlogisticsbases activitiescarriedouton
behalf of the establishment.
Threats
-,
- Increase trendinexchange rates,high inflationandeconomiccontraction,problemsinthe Middle
East Regionandweakeningrelationswiththe EuropeanUnion, Protectionistpoliciesfortrade and
transportation,
- The competitive advantageof foreigncompaniesinthe market, Costincreasesand logisticscost
burdenincludedinthe total costof industrial products.
- Bilateral andtransittransportquotas, Strictvisaapplicationsandvisarestrictions, Informal
economy, Covid-19epidemicanduncertainty,whichaffectedthe whole worldby2020.

5. - Foreigndirectinvestmentsandespeciallyfixedcapital theirinvestmentstendtodecrease inrecent
years,
- Economiccontractionon a global basis.
RESULT
In 2026, the global logisticsmarketsizewillreachapproximately17billionUSD It isestimated.
However,the logisticsof the Covid-19outbreakthatstartedas of 2020 industryandmany variables,
especiallythe supplychainstructure, Itisobviousthatitwill be reconsideredonnew equations.
Turkey;47th inthe LogisticsPerformance Index 2018, Global CompetitionIndex Itisranked61st in
the 2019 ranking. Failingtoexhibitlogisticsperformance inproportiontoitspotentialandmoreover
inthe last2 years Comparedtoothercountries,primarilyperformance reduceslogisticsbasesin
Turkey for thispurpose,primarilytodevelopthe infrastructureandthe “LogisticsDataIt must
activate the coordinationbyestablishingthe "base". Itisacceptedthatthe share of the logistics
sectorin GDP isbetween11-13%. are being.50% share inthisratio isdirectlyrelated tologistics
service providers. stemsfromitsactivities;The remaining50% share isownedbycompaniestrading
goods. consistsof the logisticsactivitiescarriedoutwithintheirorganization(UTIKAD).InGDP With
the increasingshare of sectorsize,the country'sforeigntrade volume andeconomicItscontribution
to growthwill alsoincrease.Ithasthe greatestimportance inforeigntrade activities Inorderto
improve maritime transport,the numberof ports isincreasedandexistingportstheirtechnical
capacitiesneedtobe improved.However,inimportandexport Improvementsshouldbe made in
rail transport, whichhas a verylowshare,and The connectionsof railwaynetworkswithports
shouldbe made effective andefficient.Therefore,the volume of activityof multimodal and
intermodal transport The share of the logisticssectorinGDP shouldbe increasedbydeveloping a
continuousandreal economicgrowthmustbe pavedthe way.Combinedtransportsystem withan
emphasisonthissystem the typesof transport,vehicles,stationsandports,equipmentthat
constitute mustbe recognized. Commoncustomsstandardsshouldbe improvedsothatproduct
flowsbetweencountriesshouldbe accelerated. Bureaucraticobstaclesshouldbe removedand
delaysatthe bordersshouldbe ended.Also,transit The freedomof transitrule shouldbe regulated
inorder to eliminate the problemsexperiencedintransit. Waitingtime atcustomsisone of the most
importantproblemsinthe logisticsindustry.Export The "exitprocess"forcustomsprocedures
shouldbe facilitatedandcitytrafficshouldbe regulated.
In orderto become a regional base,customsshouldbe able to serve 24hours a day,everyday.
Electronictransactionsof foreigntrade transactions usingstandardizede-documents
implementationinthe environmentshouldbe accelerated.Free trade agreements,customsgates
the numberof visasshouldbe increasedandthe proceduresforthe abolition of visasshouldbe
accelerated. Forthe developmentof the logisticssectorandtoincrease the service qualityof
companies,technological Adaptingtoinnovationsanddigitalizationare essential.However;across
the country "Logistics Database ”shouldbe establishedandlogisticscoordinationshouldbe enabled.

6. favourable geographical locationof Turkey:Locatedinthe mostimportantarea of the SilkRoad line,
it isa country that connectsthe continentsof AsiaandEurope andis surroundedbythe seaon three
sides.