Turkey's Logistics Performance
In the Logistics Performance Index (LPI) measured by the World Bank, Turkey ranked 47th with a score of 3.15 in 2018, and rose to 38th place with a score of 3.4 as of 2023. This rise demonstrates that Turkey is continuously improving its logistics infrastructure and service quality. Official authorities state in the 12th Development Plan that Turkey aims to rise to 25th place in the LPI ranking as its target for 2028. To achieve this goal, Turkey continues to make significant investments in the logistics and transportation sector.
First of all, let's elaborate a bit more on what this LPI is and why it is important. With these published measurements and reports, the World Bank announces an average score by evaluating each of six different criteria: Customs, Infrastructure, International Shipments, Logistics Competence, Tracking & Tracing, and Timeliness. During the evaluations, it conducts surveys with about a thousand authorities, experts, and senior managers worldwide, presenting a transparent, comparable picture, and offering recommendations by commenting on risks and opportunities.
Of course, it is not easy to improve this score and rapidly climb to the top of the list without detailed work under so many different headings. Because alongside internal dynamics such as infrastructure, laws, regulations, and investments, we must also have a stable action plan for many external factors ranging from geographic location, tension in your region, climate events, to your political relations at the country level. In this respect, it is pleasing to see that Turkey is on a rising trend and acting in line with a set goal. Expecting it to be in an even better position when compared to its potential is our most natural right.
Share Received from the Global Pie
If we accept the LPI ranking as our logistics competence and global confidence index, 38th place is a mediocre score for the world's 18th largest economy; however, our ranking in getting a share from the world logistics pie is in a better position. Turkey's logistics sector, with a size of 100 billion dollars, receives a 2.5% share from the global logistics market and ranks 11th in the world with this rate. Furthermore, the share of the logistics sector within Turkey's total service exports is 40%, and this rate is increasing every passing year. Although this growth reveals the competitiveness and potential of Turkey's logistics sector, it does not fully overlap with the LPI score. This means that despite its shortcomings, Turkey has certain strong aspects that compel others to do business with it. Geographic location, being situated on major routes, and offering competitive prices are the first factors that come to mind.
Strategic Position and Logistics Advantages
Turkey offers a natural advantage in logistics due to being located at the intersection point of Europe, Asia, and Africa. Especially cities like Istanbul, Izmir, and Mersin have become key points in global logistics activities by taking place at the center of trade routes. The intense industrial activities and ports in the Marmara Region increase Turkey's competitiveness in logistics.
Although it brought about very major debates, the New Istanbul Airport, which opened in 2018, is one of the largest and most modern airports worldwide. The high-capacity cargo terminal and strategic location of the airport enable Turkey to assume a central role in international cargo transportation. This airport has become an important hub directing cargo traffic between Asia and Europe.
The growth of Turkey's logistics sector on a global scale also means that it needs to create global logistics brands. Although many successful companies that come to mind when we say Turkish logistics sector, such as Mars Logistics, Ekol Logistics, Netlog Logistics Group, and Arkas Logistics, give us reason for hope in this field, their numbers and impact need to increase. Looked at geographically, it is possible to see that our potentials can still be enhanced with our advantageous position in Road, Sea, Air, and Rail transport.
So, what steps should we take to utilize these potentials?
This is precisely where the LPI comes into play. With every positive step under the subsection headings in the reports, both our global index will rise and the share we receive from the global pie will inevitably increase. The steps Turkey will take in the upcoming period should be parallel to headings such as Strengthening Infrastructure, Human Resources and Education, Supporting Exports, Regional Collaborations, New Logistics Centers, Environmentally Friendly Practices, Customer Satisfaction and Quality, and E-commerce-focused Logistics.
