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Silk Road Türkiye: transport route of unlimited possibilities
Any company that transports goods from the Far East to the European Union is familiar with the trans-Siberian route. Goods travelling from China via the Northern Corridor of the New Silk Road reach the EU in Poland or Finland via Russia and Belarus. The corridor has been seen as the best way of shipping goods efficiently from the manufacturers to their destination for a long time. However, there is now an alternative route for transporting goods to the European Union: the Middle Corridor. What are its benefits in comparison with the northern route?
Any projects, which establish infrastructure and trading networks on overland and maritime routes between China and more than 60 other countries in Asia, Africa and Europe, have been described as the New Silk Road since 2013. They are attempting to breathe new life into the historic Silk Road. The Middle Corridor should also be seen in this light and its importance is growing all the time. In the past, the trans-Caspian route extended from China as far as Azerbaijan via Kazakhstan. The BTK (Baku-Tbilisi-Kars) railway line now links up with the corridor there and opens up new prospects for trade between the Far East and Europe. The railway line runs from Azerbaijan through Georgia and ends at Kars in Türkiye. Well-developed railway lines exist between Kars and Istanbul and goods from the Far East can be transported along them to Türkiye’s major city and distributed from there to Europe and particularly to Germany. The first container train from China to Europe along the Silk Road via Türkiye departed in May 2022.
Benefits of the trans-Caspian trade route
The transport initiative known as the Middle Corridor is distinct from other types of organisations such as the Belt and Road Initiative (BRI). The Chinese President, Xi Jinping, launched the BRI as a global strategy for developing infrastructure as early as 2013. The BRI is also seeking to resurrect the Silk Road. A total of 149 countries have been included in the initiative so far. The Middle Corridor transport route, however, opens up much more wide-ranging opportunities in order to benefit from trade between China and Europe in economic terms. Specially established logistics centres and free trade zones in the ports of Turkmenistan, Kazakhstan and Azerbaijan, for example, are helping to develop and consolidate cooperation in the trans-Caspian region.
The Middle Corridor is in theory more economical and faster than the Northern Corridor. The trans-Caspian trade route between Europe and Asia is 2,000 kilometres shorter and provides more favourable climatic conditions for transporting goods. In addition, companies using the Middle Corridor benefit from the geostrategic advantage that the route does not pass through Russia. The trans-Caspian route therefore represents an efficient alternative to the trans-Siberian corridor.
The Silk Road Türkiye - Bridge between Europe and Asia
Türkiye occupies a central position along the Middle Corridor route. Logistics companies particularly benefit from the structural connections to the ports in Türkiye and can then reach the Middle East, North Africa and the Mediterranean region without any problems. 96 percent of the roughly ten million containers, which are transported from China to Europe, currently pass through Türkiye on their journey by sea. These goods mainly involve spare parts and clothing items. The goods that are transported most frequently are non-radioactive items without any chemical additives. The transport operations are also handled by rail within Türkiye and this makes the risk of theft extremely low. There are therefore nothing but benefits for logistics companies by having a greater presence in Türkiye.
The country has constantly gained in importance during the last few years, in both economic and logistical terms. Türkiye now has a reputation for being a centre of innovation and growth. The country, in which 45 percent of the population are aged under 30, has a strategically favourable location. About 40 percent of global trade takes place within a four-hour direct flight radius from Istanbul in Türkiye. It is therefore possible to reach 1.3 billion people in the EU, the Middle East and North Africa (MENA countries) as well as Central Asia from Istanbul, for example. This means that Türkiye is the obvious choice to handle the centralised transfer of goods from east to west. Both the international and domestic transport market for packages is therefore a potentially exciting area for companies. The country provides a strong incentive for logistics firms as the vital crossroads between east and west. Already driving the country's development are Türkiye's strategic Eurasian bridge function and the Turkish Silk Road.
The development of exports in Türkiye
The e-commerce market in particular enjoyed significant growth in Türkiye during the COVID-19 pandemic. While this sector only accounted for less than four per cent of Türkiye’s gross domestic product just five years ago, the figure has already reached more than 14 percent. Experts are predicting that this will grow to 22 percent by 2026. Exports from the Turkish spare parts industry have particularly increased during the last few years. The major focus here is on spare part components. Clothing items as well as brown and white goods are often exported too. Türkiye currently transports 50 percent of its entire white goods to Great Britain, France, Germany, Italy and Spain. Turkish furniture exports registered an increase of 23.9 percent during 2021. At the same time, the income generated by this sector exceeded the figure for the previous year (2020) by US $ 4 billion. The aviation sector and the defence industry also have a reputation for being up-and-coming segments and they too provide a high level of export potential.
The most important factors for the increase in exported goods are design, quality and competitive prices. Turkish manufacturers produce very high-quality goods, which comply with the directives issued by the EU, and they are seeking to gain quality certification such as ISO 9001, ISO 14001 and ISO 18001. The “Certified in Entity and Intangible Valuations” certificate (CEIV) also exists for exporting white goods and it provides information that the manufacturers are producing items of a very high quality.
A best-practice example: A company with business operations in Türkiye
Türkiye's Silk Road and the country itself therefore offer a great deal of growth potential for logistics specialists. The Rhenus Group operates in the country, for example, in the road transport, port logistics and air & ocean freight segments as well as project logistics. Various business sites in important cities such as Istanbul, Izmir, Bursa and Ankara ensure that the company has a broad geographical presence. And this pays off: the logistics specialist’s economic clout has grown significantly during the last two years. The Group was still employing just 40 people, who handled about 400 shipments per month, in 2020, but this figure had risen to more than 190 employees, who are now handling more than 4,000 thousand shipments per month, by 2022. As a result, the company is one of the fifteen largest logistics firms in Türkiye.
“Consumers in Türkiye can purchase everything that they need online – faster, more efficiently and at more competitive prices.”
Korcan Tugrul | Managing Director at Rhenus Türkiye
Professional handling by logistics specialists
Having a reliable logistics specialist is extremely important for the successful transport of goods via the Middle Corridor and Türkiye’s Silk Road. A well-developed logistical network in the different countries also supports the services provider. That is precisely where so-called Direct-to-Consumer (D2C) products enter the scene. The manufacturer supplies the goods, which are directly produced in Türkiye or other countries in Asia, to European consumers without the need for any intervention by others. “When handing the transport operations, we can count on our extensive experience in customs matters, our professional expertise and our international operations in handling freight and making door-to-door deliveries. Consumers don’t need to worry about the delivery process or any possible damage or delivery times,” says Korcan Tugrul, Managing Director at Rhenus Türkiye, explaining the new concept.
An online booking system for the delivery is an integral part of the D2C concept and this enables customers to track the journey taken by their furniture items with complete transparency: logistics specialists such as the Rhenus Group pick up the goods that have been ordered from the manufacturers and transship them at the company’s own hubs along the Middle Corridor. The goods then arrive at the depots, from where the employees deliver the ordered items directly to customers at their homes. If required, the products are installed there. Korcan Tugrul is convinced that the benefits of the D2C order model, which is supposed to be officially launched next year, are obvious. “Consumers can then purchase everything that they need online in Türkiye – faster, more efficiently and at more competitive prices.”