Master plan through to 2053
Turkey at the turning point of orientation towards the global economy and logistics? ‘Driving by sight’ is well-known as the policy of many Western states and companies. The confidence and optimism of many Turkish players sets them apart from this approach. Christian Doepgen travelled to Turkey recently and took stock of the situation there, through talks with managers working for DP World, Arkas and Turkish Airlines and the deputy minister of transport and infrastructure.
The development of the Turkish economy and logistics sector is currently being monitored very carefully, both internally and externally. In Q3 / 2022 the country’s GDP grew by 3.9%, according to TurkStat, the Turkish Statistical Institute.
In foreign trade, exports rose by approximately 12.6% year-on-year, and imports by around 12.2%. Inflation, however, is rampant, even though it came down for the first time in more than a year in November, namely from 85.5% to 84.4%. So what’s the outlook for the future?
The foreign player DP World identified the country as a growth market quite early on, and is thus pushing ahead with the expansion of its Yarimca maritime container terminal, amongst other projects. Terminal manager Kris Adams elaborated on the status quo to the ITJ by stating that “here on the Asian side we can handle ships with 20,000 teu capacities.”
Adams expects the sea freight market to consolidate from mid-2023 onwards, which is why the terminal aims to add to its annual capacity of around 1.4 million teu by implementing a third expansion phase. “The Turkish market is maturing on a healthy foundation,” according to Adams. DP World will bank on this potential.
The Arkas group, in turn, operates 47 containerships, making it the domestic player with the largest maritime transport capacity. It benefits from Turkey’s geographical location on the Middle Corridor. It isn’t breaking new ground in this regard, however.
“We already transported 100,000 teu across the Caspian Sea in 2018,” says Ahu Kahveci, the group’s manager for project logistics and intermodal transport, pointing to cooperation on the New Silk Road with partners such as the rail enterprise Kazakhstan Temir Zoly (KTZ).
Arkas Rail is adding five Siemens locomotives to its rolling stock, which already encompasses 700 wagons. Cooperation with the multimodal operator Duisport, for example, is a part of the company’s portfolio expansion. Since 2015 Arkas Rail and Duisport have developed the multimodal dry port Kartepe Terminal together. In future around 350,000 to 400,000 teu a year will be handled there.
Organic growth – and cooperation
Ahmet Bolat, the CEO of Turkish Airlines, sees both the country as well as his company well prepared for the future. “The global recession is coming, but Turkey is in a favourable position,” he analysed. Turkish Airlines – Bolat was keen to underline that its name will not be changed – is heading for revenues of USD 18 billion in 2022, and profits of USD 2 billion. Incidentally, the group is paying out 20% of this as a bonus to employees, following four salary increases this year. Airfreight activities also contributed to this record with the recent high margins of 7 USD / kg – up from approximately 1 USD / kg.
Bolat, however, believes that the growth potential lies primarily in network cooperation and in more belly-hold capacities. His plan is to “organically and gradually expand our fleet of 20 full-freighters to 50 in ten years, by converting older passenger planes.” Cargo activities are thus a key part of the airline’s overall strategy.
The meta-perspective of transport development in the country has been elaborated by the national ministry of transport and infrastructure, through its ‘Master Plan 2053’. Deputy minister Enver Iskurt told the ITJ that “from 2003 to 2022 we invested approximately USD 183.6 billion in our infrastructure. Another USD 197.7 billion will flow into it by 2053.”
Railway lines, above all, are to be more than doubled, from 13,000 to 28,600 km. Turkey wants to counter bottlenecks between Asia and Europe with a railway line on the third Bosphorus bridge, which will run between the road lanes.
“The project is coveted and a joint USD 6.8 billion financing plan with the EU is in place,” says Iskurt. The project is part of an overall Middle Corridor concept that will connect Anatolia to Bulgaria through an additional 160 km of tracks. The invitation to tender in 2023 will be followed by a four-year construction phase.
It is well-known that planning has its pitfalls, especially when it covers several decades. At the same time, a faint-hearted view of the future has rarely been rewarded in history. This case far from applies in Turkey, however.