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Issue 8 2013 Freight Business Journal


///TURKEY


The slick man of Europe


Until very recently, Turkey was not so much the Sick Man of Europe as Europe’s Teflon Man. While all around it the economies of southern and central Europe spiralled


into near collapse,


Turkey’s went into overdrive astride a seemingly unstoppable export surge. Prime Minister Erdogan even boasted that soon Turkey would be among the top ten economies. Who needs the Euro – or EU membership?


Lately, though, a few events have


happened to make people take stock. The recent anti-government protests and the civil war in Syria have all tempered this headlong optimism. Stock markets have fallen and foreign investors have, if not exactly taken fright, have at least paused for thought. Some worry whether the


consumer credit boom has overstretched itself, and many retailers


are reporting reduced


sales as consumer confidence ebbs away, at least for now. But Turkey has seen booms and


busts before and those able to take a long term view are confident that she will make a comeback. In the meantime, the weakening Turkish Lira can only be good for the country’s exports, and the freight industry. In the past few years, Turkey


has made a name for herself as a ‘near source’ alternative to China,


whose costs have been rising, shipping schedules subjected to slow steaming and manufacturers are increasingly turning to the domestic market. No one is seriously suggesting that Turkey will ever become a complete China substitute, but many retailers are supplementing their bulk volume with smaller quantities shipped rapidly from Turkey, which is only around seven days from the UK overland.


PSL keeps things moving


PSL Freight operations director, Richard Catt says that there can be long queues on the Turkey/ Bulgaria land border, notably if there is industrial action or during religious holidays. “We do use this route and also via Italy (Trieste) but then this can be affected by weather and sailings especially during the winter months,” he points out. “Obviously we change plans as we hear about problems, but certainly on the UK/Turkey leg this can be difficult if route and documentation has been pre- arranged.” Trieste is a favoured option


subject to weather/sailing delays normally to do with the weather


– although Italian Customs are quite prone to call examinations (both documentary and physical) for inbound Turkey-UK cargo. Turkey’s only other European


and EU land border is Greece, but PSL does not favour this routing. Turkey does have an EU


trading agreement, but is not a member of the EU so customs clearance is still needed for export and import for cargo. Preference agreements are in place subject to being supported by ATR or EUR preference certificates giving most goods from Turkey to the UK a reduced (in most cases nil) duty. The ATR/EUR certificates give


Pall-Ex sees potential


Turkey offers huge potential for a domestic distribution network, says Anand Assi, project director at palletised freight system, Pall-Ex. As in other countries where the UK-based company is considering extending its concept, talks are going on with potential national partners, although there is no time scale on when operations might start. The plan, as everywhere else, is to


offer a whole-country service, even the furthest-flung reaches, although around 60-80% of the country’s business is concentrated on the


Marmara area centred on greater Istanbul. The latter’s fearsome traffic congestion could be a challenge, though Assi points out that trucks moving in an out of a hub in that region would do so in the small hours of the morning when it should be relatively free-flowing. Retailing is booming in Turkey,


distances are long – which makes empty running expensive – and yet the haulage industry has historically been fairly fragmented and localised. “It’s a market that has yet to be conquered,” says Assi.


preference and status, but the transit document is covered by TIR carnet for which the haulier has a bond open against the movement to Customs clearance in the destination country. More recently Turkey has joined the CT (Community Transit) mechanism for which loads now travel on guaranteed T1s (put up by the forwarder or customs agent). Richard Catt adds: “We have noticed the T1 being used more and more, and it is more prolific on movements of higher value cargo where the TIR carnet may not have sufficient cover.” PSL Freight in Dover Customs clears over 50 inbound loads


from Turkey per week, operating 24 hours a day, seven days per week. Export loads are also dealt with although oſten these may be departing to another EU country to complete loading, in which case only preference certificates and EADs are required. The Dover office also covers


the other ports for loads moved on alternate routes and the clearance section clears for several blue chip companies irrespective of carrier. Catt adds: “Turkey is one of the fastest growing economies, and we have certainly seen the importance of UK trade with Turkey increase over the last few years.”


Traffic set to double


With Turkey one of the top ten fastest growing economies in the world, by 2015 Turkey’s freight industry will double, says DSV Air & Sea route development manager, Aydin Sezen Mahmutoglu. Given the tough economic


climate in Europe, many consumers are looking to find the best value products and Turkey is well placed to provide those. By 2020 Turkey is expected to be one of the largest hubs in the world. This expansion will gather pace as countries look to source products from Turkey rather than China and other Asian


countries, he predicts: “Turkey can now compete with China on price. And in industries such as clothing, electronics and finished products, many manufacturers choose to source from Turkey rather than China. Transport time, service quality and product control are the biggest factors affecting this choice.” Mahmutoglu set up the the


Turkey to UK route for DSV before becoming route development manager for Turkey based in the UK in 2007. DSV Air & Sea has seen business increase by more than 100% in the last six years.


Turkey is top for trade, says Allport


There’s a very good chance that the best of china in your house came, not from China, but Turkey which accounts for one in two of all such items sold in the UK, along with one in four of all TVs sold in this country – and most Ford vans and a good many of the Mercedes trucks. Total Turkey to UK trade is up


24% this year, says John Williams, director of overland at logistics company Allport. “The Turkish Lira has dropped by 20% versus the Euro and while we did notice that this cooled Turkey’s imports for a while around June and July, it has since picked up again.” The UK sells a lot of steel and a huge variety of manufactured goods along with vehicles, pharmaceuticals and chemicals back to Turkey. But it’s the flow in the other


direction that makes the trade what it is. “Turkey is a very export- orientated nation,” Williams says. “They excel in areas like fast fashion.” Allport, which Williams says is


one of the market leaders on the Turkey to UK route in conjunction with its partner Ulusoy, has also seen its business rise on the back of new contracts wins for major retailers. It runs about 40-50 groupage and full load trailers a week, which equates to a groupage departure virtually every day of the week. It offers an intermodal option, taking around seven days (8-10 days for groupage door to door) using ferries from Istanbul to Trieste, rail to Germany and road thereaſter to the UK. This is a workable intermodal option, Williams feels. While it is possible to rail traffic all the way from Istanbul to western Europe, there are question marks


over the route’s reliability, he says. For those in more of a hurry,


there is express and super-express road using double-manned trucks or relay drivers on the overland route, in as little as days. And for the really urgent spares, airfreight is another option. Offering a variety of overland


options is a good idea, Williams says. “It means that you don’t have all your eggs in one basket – for example, if the land border is busy or the ferry is full – and for some companies reducing their carbon footprint is important, so the intermodal option is attractive.” It is also possible to ship


containers all the way from the UK to a variety of Turkish ports, taking around 15-16 days. Allport and Ulusoy also operate


direct services into Mersin and Izmir. Ulusoy operates is own ferry service between Cesmir (near Ismir) and Trieste – logistics companies running their own ferry services seems to be something of a trait in this part of the world. Ulusoy also has its own office at


Trieste port which, Williams says, is “a big advantage as it can speed things up no end, sorting out paperwork and prioritising trailers onto the ferries.” Allport has partnered with


Ulusoy for the past 25 years, and it’s this stability that is a key factor in its success on the route. While there is no shortage of truckers in Turkey, there are only a relatively small number of large operators with the resources to maintain a long and frequent overland operation to western Europe. Lately, there has been some instability in the trucking sector, with takeovers and companies seeking cash injections.


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