Türkiye’s role in global trade
Türkiye has emerged as a pivotal player in global trade, and the role of Turkish logistics is at the heart of this ascendancy. In 2024, Türkiye solidified its position as the EU’s 5th largest trade partner, with bilateral trade reaching a record high of almost €206 billion. This significant increase is largely attributed to the EU-Türkiye Customs Union, which has facilitated the removal of tariffs and quantitative restrictions on industrial goods, thereby enhancing trade flows between the two regions.
Impact of the EU-Türkiye customs union
The EU-Türkiye Customs Union has been instrumental in boosting trade volumes. In 2024, the EU’s exports of goods to Türkiye totalled €111 billion, while imports from Türkiye amounted to €95.5 billion. Key sectors driving this trade include the automotive industry, machinery, and electrical equipment. The EU remains Türkiye’s largest goods import and export partner, with 41% of Türkiye’s exported goods destined for the EU and 29% of its imported goods originating from the EU.
Free trade agreements and global reach
Beyond its relationship with the EU, Türkiye has a robust network of free trade agreements (FTAs) that further bolster its position in global trade. As of 2024, Türkiye has 23 FTAs in place, including agreements with EFTA countries, Israel, North Macedonia, and several other nations. These agreements cover a wide range of products and services, enabling Turkish businesses to access diverse markets with preferential tariffs. For instance, the Turkey-EU Customs Union alone covers 37.9% of Turkey’s exports and 44.1% of EU exports.
Geographical advantage and logistical infrastructure
The strategic geographical location of Türkiye is another critical factor in its logistical prowess. Situated at the crossroads of Europe, the Middle East, and Central Asia, Türkiye offers a unique advantage for companies seeking to serve these regions. This proximity, combined with its extensive port network, makes Türkiye an attractive hub for international trade. DP World Yarımca Port and Evyap Group’s Evyapport are examples of major logistical facilities that are expanding their capacities to meet the growing demand for sophisticated logistics in the region.
Expanding operations
DP World, in particular, has been aggressively expanding its operations in Türkiye, reflecting the country’s potential as a logistics hub. The company aims to offer end-to-end logistics solutions, from picking up cargo to delivering it to the end user, leveraging its ports, warehouses, and freight forwarding capabilities. DP World’s acquisition of several companies, including Imperial and Syncreon, has enhanced its global reach and ability to provide comprehensive logistics services. The company is also developing block trains to Europe and establishing inland container depots, further integrating Türkiye into global supply chains.
Another significant development in Turkish logistics is the acquisition of Ekol Logistics by DFDS. This move has significantly enhanced DFDS’ ability to provide reliable and efficient transport infrastructure between Türkiye and Europe. Ekol Logistics, with its extensive network in 10 European countries, uses a combination of road, ferry, and rail to transport goods, making it the largest customer of DFDS’ Mediterranean ferry route network. This acquisition aligns with DFDS’ strategy of expanding its logistics network across Europe and connecting it to Türkiye, thereby supporting the country’s growth as a manufacturing hub.
Addressing supply chain challenges
The Turkish logistics sector is also addressing the challenges posed by global supply chain disruptions. For instance, the issues around the Red Sea have led to extended transit times, but companies like DP World have responded by offering rail solutions that reduce journey times significantly. DP World’s rail solution for automotive customers from China to Türkiye, which takes less than 35 days, is a prime example of such innovative solutions.
In addition to its physical infrastructure, Türkiye is also focusing on the modernization of its trade agreements and regulatory frameworks. The inaugural meeting of the EU-Türkiye High-Level Dialogue on Trade in July 2024 aimed to address remaining bilateral irritants and discuss areas of cooperation to strengthen the Customs Union. This includes efforts to prevent the circumvention of EU sanctions and to modernize the Customs Union to cover areas such as services, public procurement, and sustainable development.
The labor and cost dynamics in Türkiye also play a crucial role in its logistical capabilities. While Turkey faces competition from North Africa and ASEAN countries in terms of labor costs and supplier delivery times, its proximity to European and Middle Eastern markets remains a significant advantage. However, challenges such as capital cost and labor availability are being addressed through strategic investments and partnerships. A survey by S&P Global in May 2024 highlighted these challenges but also indicated that companies are looking to overcome them through innovative solutions and investments.
Conclusion
In conclusion, Turkish logistics is a cornerstone of Türkiye’s growing importance in global trade. With its robust trade agreements, strategic location, and expanding logistical infrastructure, Türkiye is well-positioned to continue its ascent as a key player in international trade. The ongoing efforts to modernize trade agreements, address supply chain challenges, and enhance logistical capabilities further solidify Türkiye’s role in facilitating efficient and reliable global trade flows. As the global trade landscape continues to evolve, the role of Turkish logistics will remain pivotal in connecting Europe, the Middle East, and beyond.