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WORLD OF INDUSTRIES - LOGISTICS 2/2017

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WORLD OF INDUSTRIES - LOGISTICS 2/2017

Istanbul: the epicentre

Istanbul: the epicentre of Eurasia’s logistics sector For centuries Istanbul has been a focal point for trade owing to its location on the route connecting Europe, Asia and central Asia, making it an ideal location for Eurasia’s largest trade fair dedicated to intralogistics and supply chain management. Turkey’s unique location at the crossroads of the world trade routes and energy routes, its geographic proximity to Europe, Asia, the Balkans and North African countries and to the energy producing regions in the Caspian and Central Asia make it a thriving trading hub and an attractive base for transport and logistics. Turkey’s strategic location provides access within a four-hour flight radius to multiple markets with a combined population of more than 1.5 billion people, a combined GDP of $ 25 trillion, and more than $ 8 trillion of foreign trade, which corresponds to a majority of the total global trade. The country well placed between Europe and Asia has for centuries enjoyed the technological advancements from Europe and access to larger markets in Asia. Businesses in Turkey have been rising significantly, in 2015, Turkey was responsible for 1.05 % of the global trade volume, and this number is expected to exceed 1.5 % by 2023. Increase in Turkey’s foreign trade volume will lead to a substantial growth in the transportation and logistics industries. Turkey is in a strong global position, compared with its central Asian and southern European neighbours when it comes to logistics. The Eurasian nation ranks 30 th on the World Bank’s logistics performance index, far above its closest regional competitor, Greece, which ranks 44 th . Overall 2016, was not a very positive year for Turkey’s logistics sector, which saw slight contraction due to the crisis with Russia, shutting down of roads to the Middle East due to problems in Iraq and Syria, a wait-and-watch tendency for investments after the July 15 coup attempt, and tightening EU borders amid the refugee crisis. But in the long run, Turkey is committed to exploiting its advantageous location by positioning itself as the region’s leading transport and logistics centre. The sector is worth approximately $ 100 billion. The Investment Support and Promotion Agency of Turkey (ISPAT) stated that the logistics industry contributes roughly 10 to 12 % of the total GDP. Estimates from the ISPAT indicate that the sector will be worth $ 180 to 200 billion by 2023. Turkey: Logistics market composition A contrast exists in the domestic and international transport networks established by Turkey. Road transport, for example, dominates internal freight distribution with more than 80 % market share. International trade looks much different, as shipping holds the greatest market share with more than 75 %, followed by road at 11 %. Comparatively, the market composition changes when we look at foreign trade by value. Sea freight still claims 50 % of the market, closely followed by road with 35 %, air with 10 % and railway with With the third Bosporus bridge now open to traffic, Istanbul is cementing its position as a key logistics route between Asia and Europe CEMAT EURASIA Author: Sushen Doshi, International Correspondent for World of Industries – Intralogistics & Distribution

1 %. The government is hoping to see trade levels rise to $ 1 trillion by 2023. Half of this total is to come from exports, which will have an immense effect on the transport & logistics sector as a whole. Third party logistics (3PL) companies are seeing significant dividends due to the fact that the sector remains relatively unorganised in Turkey at present. While some major retail firms handle their own distribution networks, many rely on third party support to ensure cargo reaches its destination. Domestic 3PL suppliers’ performance gives insights into the enormous opportunities Turkey can offer. In the last decade, the leading local firms have enjoyed a stunning double-digit growth with increasing domestic and international trade volumes. A changing retail landscape is likely to have positively affected the demand for transport, logistics and warehousing services across Turkey. With the population now dominated more and more by the youngsters, the overall buying habits are changing, for example, frozen and preserved food consumption is on the rise – creating a higher demand in the market for cold chain service providers. Urbanisation and increased e-commerce sales, now worth in excess of Euros 6 billion, will also play their part in providing small and mid-size logistics firms the scope for Turkish expansion too. CeMAT Eurasia Due to the importance of western Turkey as the industrial heartland of the country and an important consumer market, most of the good quality distribution facilities are located in Istanbul or in Gebze. Various analysts rank Istanbul and Izmir in the top 10 list for logistics competence. As Turkey’s trade volumes go on increasing the logistics and transportation sector is about to feel the problems arising due to congestion, especially in Istanbul. A mega city like Istanbul, requires a unique strategy to deal with its logistics and congestion problems, for example, one cannot apply the same strategy for development to Istanbul and Kinshasa. Istanbul and Turkey will need to develop its own unique eco-system which takes into account the movement people, management of data and finance, reduce wastage of energy and other resources. More investment on infrastructure is one part of the solution but more importantly better utilization of resources and smarter ways of operation will make a whole lot of difference. There is also a lot of scope to improve the technological developments in the industry including the satellite communications of the vehicles, track and trace of the shipments, introduction of RFID. This will inevitably create a logistics ecosystem in which more and more components are networked. The international trade fair CeMAT Eurasia for material handling, logistics, transport and supply chain systems can play a vital role in this context by introducing new ideas and newer products with networking capabilities. The international event to be held from 16 th until the 19 th March 2017 in Istanbul, provides an ideal platform to meet with experts and professionals in the logistics and supply chain management representing the large as well as small enterprises. Exhibitors from around the world will present their innovative logistics systems, cranes and forklifts, packaging technologies, shelving systems, logistics IT and electronics at CeMAT Eurasia in Istanbul. More than 75,000 visitors and 1,500 exhibitors from 40 countries are expected to attend, thereby consolidating its place as the most influential trade fair in the region. n Turkey possesses Europe’s largest truck fleet with more than 750,000 vehicles across the nation n In April 2016, it was announced that private freight operators will have access to Turkey’s rail network for the first time – a move that could see rail freight volumes rapidly expand n Turkey is also collaborating with China on a number of domestic and international rail projects. A $ 30 billion high speed network linking Edirne and Kars is one such development n A new freight corridor from Lianyungang to Istanbul, crossing three Central Asian states and two sea transit segments, was declared in January 2016 – befitting Turkey’s location as the perfect gateway to the East n The European Parliament has noted that the importance of maritime freight transport is rising in importance in Turkey. A 105 % increase in sea freight volumes over the previous decade is testament to this. Apart from Istanbul’s eye catching scenic beauty, the event offers an excellent opportunity to penetrate deeper into the Turkish market, to promote innovative products and equipment that offer solutions to the entire logistics chain. This event attracts visitors from around the world and is the ideal place to get a sense of latest trends and technologies in materials handling, intra-logistics, warehousing and storage services. CeMAT Eurasia provides a unique opportunity for global as well as domestic players to gather market intelligence and customer’s requirements, which helps the engineers in future, product development tasks. For companies in this sector who are hunting for fresh markets to drive their growth, Istanbul offers an access to otherwise inaccessible markets like Iran, Iraq, Balkans and Central Asian countries. The product category at CeMAT Eurasia includes a wide range of products from various segments like: n Move & Lift: Industrial trucks, forklifts, cranes, hoists, lifts, escalators, moving walkways, cableways, mechanical handling equipment, vertical lifting equipment, lifting platforms, port logistics equipment, remotely operated transportation systems etc. n Store & Load: Warehousing systems and accessories for warehousing, conveyor systems, robotic handling systems, industrial doors & gates, loading and transfer bridges, loading ramps, loading systems for bulk goods, pallets, bins and containers, turnkey solutions for logistics, storage shelf systems / technology etc. n Pick & Pack: Labelling systems and identification, packaging and order picking systems, packaging materials, packaging technology for warehouses and operations, scales and measuring devices etc. n Logistics IT: Application software for intralogistics, transportation logistics, computer systems and controls for intralogistics, identification technology, auto-ID systems, intralogistics sensors etc. Photograph: lead fotolia www.cemat.com WORLD OF INDUSTRIES – INTRALOGISTICS & DISTRIBUTION 2/2017