To get a substantial share from the intercontinental logistics volume of business, Turkey should pay more attention to improving its multimodal logistics network and customs legislation, experts say.
As business networks around the world have expanded over time, competition and effectiveness have emerged as key indicators for success in international trade. Logistics is one of the most crucial elements in competitiveness for both companies and countries as it has a significant effect on determining the price of goods and services. Besides being an important input cost, the quality and speed of transporting goods and services also is a strong factor in determining customer satisfaction.
The report “A Status Analysis for the Logistic Sector and Competitive Strategies,” published by the İstanbul Chamber of Commerce (İTO) outlines that Turkey, with its location serving as a bridge between the East and West, is ideally suited to become an international logistics hub in international trade. “However, despite Turkey’s advantageous location on the world’s map, it still needs to show improvements in its technical infrastructure, in reducing its bureaucracy and in cost-reducing moves in order to increase its competitiveness in international trade,” the report noted.
One of these cost-reducing models that Turkey should pay more attention to is the “Multimodal Logistics Model,” the İTO report underscored. “If multimodal logistics will be used effectively, there will be time and cost reductions for a company while damage to the environment will be limited,” it added. Multimodal logistics combines and utilizes more than two modes in the transportation chain. For instance, by combining sea and airfreight modes, the logistics sector of a company or the country in general will stand to benefit. “If Turkey wants to increase its share in international logistics, or to turn itself into an international transportation hub, the state should increase the pace at which it improves the multimodal infrastructure in the country,” the İTO report suggested.
International Transporters’ Association (UND) President Engin Özmen told Sunday’s Zaman that Turkey’s decision to bypass the former Yugoslavia, which was engulfed in a war then, can be seen as one the best examples for multimodal transportation. “Turkish transporters opened the first Ro-Ro line [Roll-on/roll-off ships] at the end of the ‘90s to bypass the war in the Balkans with the support of the state and the UND. With this development, Turkey entered a new era combining logistics methods such as land and sea [transport]. Thanks to multimodal logistics, other means of transportation have eroded less and input costs have decreased. It has also helped us to bypass the obstacles for Turkish goods transported to European countries over land,” he added. Özmen underscored that the multimodal logistic model plays an important role in becoming a regional transportation hub by saying that the required measures have achieved similar successful results with regard to other means of transportation as in the Ro-Ro case. “Railways, airways and short-distance sea transportation networks, along with ports with sufficient storage space for goods and the capacity to handle more ships, are needed. When this can be achieved, Turkey will play a more important role in the intercontinental transfer of goods,” Özmen added.
‘Customs legislation biggest obstacle’
Cem Kumuk, president of Horoz Logistics International Services Group, one of Turkey’s leading transportation companies, said that changes made recently in customs legislation have prevented Turkey from its goal of becoming a regional logistics hub. “Whether we talk about transfers to third countries or carrying goods from a different location in Turkey, the changes in the customs legislation two years ago have made the circulation and transfer of customs goods very difficult. If the legislation does not allow you to handle, transfer and carry goods from Turkey to a third country easily, an advantage in geographical location will not have any importance,” Kumuk said. “Therefore, Turkey urgently needs to make changes in customs legislation for transferring goods which have entered the country and increase the number of ports and free zones if it wants to make better use of its advantageous location on the world map.” He underlined the importance of multimodal logistics and said having the opportunity to carry goods via different transportation methods would be a plus for a country. However, he noted that despite the fact that Turkey can combine sea, air and land freight, the limited number of ports, their low capacity and the absence of a large railway network across the country make it difficult for Turkey to become a regional transportation hub.
Özmen expressed similar views by saying that having a strategic position in the world does not always result in getting a higher share from global transport without improving the infrastructure and changing customs legislation. “The total value of handled goods between East and West, or developing and developed economies, recently reached $1 trillion, and Turkey sits precisely at the heart of this business. Unfortunately, we cannot benefit from this volume. The Global Logistics Index announced by the World Bank is an indication of this. Turkey’s score in this index is 3.22 out of 5 and currently ranks 39th on a list comprising 155 countries,” Özmen said. “This score shows us that Turkey does not have a satisfactory development of logistics infrastructure and technological equipment. We need to improve the infrastructure, customs legislation and quickly construct more logistic hubs in the country if we want increase our share in international transportation.”
As business networks around the world have expanded over time, competition and effectiveness have emerged as key indicators for success in international trade. Logistics is one of the most crucial elements in competitiveness for both companies and countries as it has a significant effect on determining the price of goods and services. Besides being an important input cost, the quality and speed of transporting goods and services also is a strong factor in determining customer satisfaction.
The report “A Status Analysis for the Logistic Sector and Competitive Strategies,” published by the İstanbul Chamber of Commerce (İTO) outlines that Turkey, with its location serving as a bridge between the East and West, is ideally suited to become an international logistics hub in international trade. “However, despite Turkey’s advantageous location on the world’s map, it still needs to show improvements in its technical infrastructure, in reducing its bureaucracy and in cost-reducing moves in order to increase its competitiveness in international trade,” the report noted.
One of these cost-reducing models that Turkey should pay more attention to is the “Multimodal Logistics Model,” the İTO report underscored. “If multimodal logistics will be used effectively, there will be time and cost reductions for a company while damage to the environment will be limited,” it added. Multimodal logistics combines and utilizes more than two modes in the transportation chain. For instance, by combining sea and airfreight modes, the logistics sector of a company or the country in general will stand to benefit. “If Turkey wants to increase its share in international logistics, or to turn itself into an international transportation hub, the state should increase the pace at which it improves the multimodal infrastructure in the country,” the İTO report suggested.
International Transporters’ Association (UND) President Engin Özmen told Sunday’s Zaman that Turkey’s decision to bypass the former Yugoslavia, which was engulfed in a war then, can be seen as one the best examples for multimodal transportation. “Turkish transporters opened the first Ro-Ro line [Roll-on/roll-off ships] at the end of the ‘90s to bypass the war in the Balkans with the support of the state and the UND. With this development, Turkey entered a new era combining logistics methods such as land and sea [transport]. Thanks to multimodal logistics, other means of transportation have eroded less and input costs have decreased. It has also helped us to bypass the obstacles for Turkish goods transported to European countries over land,” he added. Özmen underscored that the multimodal logistic model plays an important role in becoming a regional transportation hub by saying that the required measures have achieved similar successful results with regard to other means of transportation as in the Ro-Ro case. “Railways, airways and short-distance sea transportation networks, along with ports with sufficient storage space for goods and the capacity to handle more ships, are needed. When this can be achieved, Turkey will play a more important role in the intercontinental transfer of goods,” Özmen added.
‘Customs legislation biggest obstacle’
Cem Kumuk, president of Horoz Logistics International Services Group, one of Turkey’s leading transportation companies, said that changes made recently in customs legislation have prevented Turkey from its goal of becoming a regional logistics hub. “Whether we talk about transfers to third countries or carrying goods from a different location in Turkey, the changes in the customs legislation two years ago have made the circulation and transfer of customs goods very difficult. If the legislation does not allow you to handle, transfer and carry goods from Turkey to a third country easily, an advantage in geographical location will not have any importance,” Kumuk said. “Therefore, Turkey urgently needs to make changes in customs legislation for transferring goods which have entered the country and increase the number of ports and free zones if it wants to make better use of its advantageous location on the world map.” He underlined the importance of multimodal logistics and said having the opportunity to carry goods via different transportation methods would be a plus for a country. However, he noted that despite the fact that Turkey can combine sea, air and land freight, the limited number of ports, their low capacity and the absence of a large railway network across the country make it difficult for Turkey to become a regional transportation hub.
Özmen expressed similar views by saying that having a strategic position in the world does not always result in getting a higher share from global transport without improving the infrastructure and changing customs legislation. “The total value of handled goods between East and West, or developing and developed economies, recently reached $1 trillion, and Turkey sits precisely at the heart of this business. Unfortunately, we cannot benefit from this volume. The Global Logistics Index announced by the World Bank is an indication of this. Turkey’s score in this index is 3.22 out of 5 and currently ranks 39th on a list comprising 155 countries,” Özmen said. “This score shows us that Turkey does not have a satisfactory development of logistics infrastructure and technological equipment. We need to improve the infrastructure, customs legislation and quickly construct more logistic hubs in the country if we want increase our share in international transportation.”