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The Turkey freight and logistics market is expected to grow at a CAGR of around 8% during the forecasted period. The growth is a result of the country’s strategic location between Asia and Europe. The key growth drivers for the market include increasing online purchasing boosting the e-commerce market, the Middle Corridor Initiative by Turkey, increasing yearly investments by the government to improve the state of infrastructure in the country such as road & rail networks, and expansion of airports and seaports.

Key Market Trends

Roadways have Largest market Share for Domestic Freight Transportation

The manufacturing and the automotive industries have been the major driving force for the growth of the logistics industry in Turkey. The manufacturing sector contributed to almost 25.0% of the country’s GDP. The machinery and equipment manufacturing sector has been the major contributor to the exported items in Turkey. As a result, Turkey is the fourteenth major automotive producer in the world and fifth-largest in Europe, with a 78.0% average export rate. For the domestic manufacturer’s in these industries the transportation costs are a huge segment of the product’s final cost, as a result the roadways are more preferred over any other mode of freight transportation. More than 85% of domestic freight is transported through roads in turkey, a huge majority compared to the next largest market sector, rail, with 5%. The volumes have been on a constant increase since 2010. The Turkish road network has been vital to the growth of the country’s logistics industry. The country is implementing various projects for rail freight corridors, coastal freight corridors and international highway corridors to become a leading logistics market. Moreover, initiatives like the much-anticipated Belt and Road initiative (BRI) by China will provide a boost to the logistics industry in Turkey.

Infrastructure Investments and Public Private Partnership (PPP)

Turkish economy is rapidly growing with an average annual GDP growth rate of 5.5%. With increasing population and urbanization, the manufacturing industries are also flourishing. Therefore, Turkey’s growing trade volume and strategic location compels the country to develop its infrastructure. Till mid-2019, Turkey has implemented $139 Billion worth of Public Private Partnership (PPP) projects in a variety of sectors from transportation to healthcare and energy, ample opportunities for investment are available. Turkey has implemented a variety of mega projects with Build-Operate-Transfer model such as New Istanbul Airport, Yavuz Sultan Selim Bridge, Gebze- Orhangazi – Izmir Motorway and Eurasia Tunnel. A total of 242 projects have been set up from 1986 till 2018. Transportation and energy infrastructure projects dominate the PPP market in Turkey. From 2003 - 2018, a total of 515 billion ? worth of infrastructure investments have been done including completed PPP projects and government investments. With the country being located at such a strategic location that connects the east and the west, the country provides access to Europe, Central Asia, Middle East, and North Africa. This placement justifies the importance for its logistics market and the need for infrastructure investments.

Competitive Landscape

The competition in the freight forwarding industry in Turkey is highly fragmented with the presence of both domestic as well as international logistics companies in the country. As of 2018 The Association of International Forwarding and Logistics Service Providers Turkey (UTIKAD) represents more than 450 freight forwarder members offering air, ocean, rail, and road forwarding activities with a total workforce of about 50,000 employees. Some of the existing major players in the market include – XPO Logistics, DB Schenker, Agility Logistics, DHL, Kuehne + Nagel, Nippon Express, C.H. Robinson, Hellmann Worldwide Logistics, Omsan Logistics, CEVA Logistics, Karinca Logistics, KITA Logistics, Ekol Logistics, Netlog Logistics and Mars Logistics.

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