Improving Turkish logistics and the PTT

Published 22.02.2019 00:14

Turkey has built and renewed an extraordinary logistics network and infrastructure over the last decade. Now, it is time to reap the benefits of these developments

International logistics is a rising asset for Turkey and the whole world. Global logistics and airfreight giants have enjoyed the fruits of international logistics over the last couple of decades. In response, governments, ministries and national postal services of less-developed and developing countries are now designing country-specific transport policies and systems, essential for a robust, sustainable logistics infrastructure because they are aware that failure to invest in logistics can be a critical mistake and cause deep economic damage to their economies.

Thus, it is necessary to have clear and concrete domestic and international logistics plans implemented to get a share of the growing logistics pie, which today is mostly driven by e-commerce. It is no surprise that China, one of the fastest growing economies in the world, is trying to be a leader in this area by reaching out to Africa and building a transportation web that will serve them in the long run.

Turkey's experience

Turkey has long suffered from poor logistics and infrastructure. That situation, however, has changed rapidly over the last decade.

On the one hand, the non-functional, mostly non-existent transportation and logistics infrastructure, was built and modernized, with much effort made to improve the competitiveness of local institutions dealing with transportation, communication and logistics. Thus, the Maritime Undersecretary, the Directorate General of Coastal Safety, the Turksat Satellite Communications and Cable TV Operations Company and the General Directorate of Highways were all integrated into the organizational structure of the Ministry of Transport to maximize the effectiveness of communication and close cooperation between the various institutions.

In addition, to bring related public institutions under one roof, the name of the ministry was changed to the Ministry of Transportation, Maritime Affairs and Communications in 2011, subsequently changing to the Ministry of Transport and Infrastructure with the transition to the presidential system.

As a result, some significant work was undertaken in the last decade, as Turkey made significant progress in the field of transport and logistics. Thus, Turkey has become a super hub for international logistics by connecting all parts of Turkey through divided roads and highways, modernized rail systems and inland waterways, new commercial sea routes and ports for domestic, regional and international use, integrating airfreight into the transport policy, improved short and deep sea shipping with international and cross-continental connections, optimizing the physical and digital transport network and most importantly, building airports in almost every city in Turkey.

These investments have enabled Turkey to have an extraordinary peer-to-peer network that attracts global airfreight and logistics companies. Based on 2018 data, it is worth underlining that Turkey has built about 27,000 kilometers of divided roads, contributing TL 17.65 billion to the economy.

In addition, the current network of motorways has 3,000 kilometers and is expected to reach 4,509 kilometers by 2023. Thanks to Turkey's flag carrier, Turkish Airlines (THY), the country has an exceptional air network reaching 300 destinations in 121 countries.

Apart from local and regional airports connecting neighboring countries with Turkey, the newly built Istanbul Airport, the biggest in the world, should become one of the main aviation and logistics hubs, strengthening Turkey's position in international logistics.

According to the Ministry of Transport and Infrastructure, 2018 was one of the busiest years in Turkey's aviation history, with more than 2,017,763 flights using Turkish airspace – one flight every 15 seconds. This number should increase when Istanbul Airport becomes fully operational in March.

All these developments and Turkey's strategic position as the meeting point between Europe, the Middle East, Africa and Asia have been tempting international logistics companies, including the British Trans Global Projects, P&O Ferrymasters and Danish shipping and logistics giant DFDS.

DHL's initiative

DHL has been operating in Turkey since 1981. It announced in December its plans to turn Turkey into a regional hub for their e-commerce market, emphasizing Turkey's great potential in e-commerce.

DHL made a 1 million euro strategic investment and opened a huge warehouse in the Manisa Organized Industrial Zone to meet all logistics requests from its customers, especially for warehousing services. Companies in the region represent huge potential and export to more than 100 countries across the globe.

The average export volume of those companies was about 3.5 billion euros in 2017. DHL's strategic move indicates that Turkish industrial zones will be future logistics hot spots. They have clear and simple strategies and implementations, but most importantly they have the right kind of professionalism and dedication.

DHL has also positioning itself in the newly built Istanbul Airport. Work recently done by DHL in Europe, Africa and the Far East underlines the importance and significance of a robust logistics infrastructure. They see the potential in these regions and conclude key partnerships with national players.

With all this activity, Turkish companies must maximize their efforts to compete with international logistics companies planning to invest more in Turkey. As a key player in logistics, the Turkish Post and Telegraph Organization (PTT), which has undergone a massive transformation over the last decade, now has massive capacity thanks to its wide network and logistics infrastructure.

However, it is important to break the chains and bring the current global logistics understanding and remember that today's logistics is not limited to goods exchange between countries by post. The PTT must maximize efforts, focusing on global business models and Turkey's logistics infrastructure.

Becoming Turkey's best logistics network would require more from the PTT; it has to take part in all kinds of logistics planning. The PTT must put great importance on e-commerce and domestic land transport and become a part of the flow of commercial goods between cities and regions, including neighboring countries and regions. Optimization and dynamic planning of the logistics fleet is essential. The potential of industrial zones in Turkey is shining. In these business circumstances, the PTT has the potential to be a warehousing services provider, too. Turkey has built and renewed an extraordinary logistics network and infrastructure over the last decade. Now, it is time to reap the benefits of these developments.

* Works for the PTT, Ph.D. candidate at Yıldırım Beyazıt University

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