Turkey has high hopes of becoming a major transit hub for land and sea cargo freighting, linking Central Asia and the Middle East with Europe, though it will need to invest heavily in infrastructure if its hopes are to be fulfilled.
Turkey already has an extensive transport grid, with some 11,000km of rail lines; 430,000km of roads, including 62,000km of motorways and main roads; a network of ports along its Black Sea, Aegean and Mediterranean coasts, and at least one airport in each of its 81 provinces.
While extensive, the results of a joint study conducted by the European Commission and Turkey's Ministry of Transport and Communications, released in 2008, showed Turkey has a long way to go before its transport network can service the future needs of the economy.
The Transport Infrastructure Need Assessment (TINA) acknowledged that Turkey plays an important role in the interconnection between the EU, the Middle East, the Caucasus, the Mediterranean, the Aegean and the Black Seas.
"The transport infrastructure networks in this region are therefore vital to competitiveness, economic growth and employment in Turkey, the EU and the entire region," the report said.
To capitalise on Turkey's unique geographic location, TINA said priority should be given to improving transport in the North-South and East-West axes to better integrate Turkish transport with international transport networks; upgrading intermodal transport facilities and services; and improving the country's ports and maritime connections.
These improvements will be needed if the assessment's projections are correct. The report said that Turkey's road freight demand would reach at least 305.2m tonnes by 2020, more than 233% up on the 123m tonnes for 2004, the base year used for the study.
Though both rail and sea freight will increase their overall cargo loads, their projected increase is far more modest. Train hauled cargos are predicted to more than double to 31.5m tonnes while the merchant marine is expected to lift its total by some 60% from the base year's total to 25.3m tonnes by 2020.
To meet this demand, Turkey will need to invest more than $25bn by 2020, with $11bn dedicated to its rail network and $10.75bn on roads, according to TINA.
The key challenge for Turkey will be to raise this cash, at a time when many other calls are being made on the limited Exchequer - including upgrading electricity generation and distribution grids, resolving environmental issues such as waste water processing and improving the health and education services.
Though some of this funding gap could be filled by assistance from the EU through its trans-European transport network (TEN-T) programme, most will have to either come from the state or the private sector, both of which are currently finding it hard to raise funds due to the tight credit markets.
Some of these major projects are well advanced, such as the Marmaray rail project, which includes a tunnel beneath the Bosphorus Strait that will link Europe to Asia, and a new high speed train connection between Ankara and Istanbul. However others, such as the duplicating of many of the country's main rail lines, remain on the drawing board for the moment.
While the government is looking to upgrade and extend infrastructure links with limited fiscal means, the transport industry may find itself in less of a position to enjoy the benefits of the improved networks, at least in the short-term. With Turkey's economy slowing, in line with those of its major export markets, there has been a fall in demand for long haul road, rail and maritime freighting.
According to figures released by the Turkish Exporters Association (TIM) in early March, overseas sales dropped 35% year-on-year in February to $6.87bn. Industrial output is also contracting, down by 17.6% in December compared to the same month in 2008, the Turkish Statistical Institute reported on February 8.
Lower industrial production means less raw materials are being freighted to factories, fewer finished products need to be shipped out while falling export demand sees reduced calls being made on Turkey's cargo haulage capacity.
The effects of the downturn on the transport sector are already being felt. The number of long haul trucks being shipped across the Dardanelles Strait is down by more than 20% so far this year, according to local ferry officials. Unlike the Bosphorus, the Dardanelles is not spanned by any bridges, with all road transport having to cross the waterway by ferry.
With much of the road-borne trade from the southern Aegean crossing the strait either heading up to Istanbul or west towards markets in Europe, the slowdown in vehicles being ferried across the Dardanelles is also indicative of the fall in trade.
The global downturn is particularly hurting the maritime freight trade. According to Erol Yücel, assembly chairman of the Turkish Chamber of Shipping, the steep drop in demand for shipping capacity due to low cargo levels has seen rental prices for ships fall by as much as 98%.
"Daily ship rental, which peaked in 2006 at $200,000, has declined to anywhere between $3000 to $4000 nowadays," Yücel told the local press on January 21.
Dozens of ships from Turkey's merchant fleet are now lying idle at ports around the coast, awaiting the next upturn of the local and global economy.
Turkish exports, and therefore production and the transport sector, may get a boost from the sharp drop in the value of the local currency, with the Turkish lira hitting an all-time-low of 1.78 against the US dollar on March 10. With the cost of Turkish goods becoming more attractive, trade could pick up, helping the transport sector onto the road to recovery.
