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hile the headlines from the Turkish transportation and logistics sector have been dominated recently by megaprojects—most notably the opening of Istanbul’s new airport—a number of undercurrents have more quietly transformed the sector.

The lira’s depreciation starting in late 2018 made Turkish exports relatively less expensive, which boosted demand. This increased exports by around 8% YoY, though in our interviews we found that these gains were generally cancelled out by increased financing and import costs. While the increase in exports might seem to be a boon for logistics companies, it too was washed out—this time by an equivalent 8% decrease in imports, wrought by falling Turkish purchasing power. These import-export logistics companies now find themselves leaving Turkey with containers full and returning with containers considerably less so.

The rise of e-commerce—a development not exclusive to Turkey—is also transforming the operations of logistics companies. In August 2018, one month after Alibaba’s majority takeover of Turkish e-commerce site Trendyol, Amazon entered the Turkish market. With the two global e-commerce giants now present—amidst an already crowded Turkish space—the market has taken off, driving up volumes and driving down prices.

While the e-commerce boom has considerably increased shipments, margins have fallen and changing consumer demands have strained networks. Logistics companies with large, resource-intensive networks have lost demand to companies with leaner, tech-intensive opera

Wtions. A raft of acquisitions and mergers in Turkey and around the world have followed, as incumbents and newcomers adapt to the new norms.

Indicative of this restructuring trend was private equity group Turkven’s acquisition of MNG Kargo. In it, MNG’s conglomerate holding company offloaded a business unit with shrinking margins, while Turkven saw an upside in digitizing and streamlining a cargo operation to claim its piece of the growing e-commerce pie. Notable for its size was Danish shipping company DFDS’ EUR950-million acquisition of U.N. Ro-Ro, a move to expand its intermodal network and penetrate the Mediterranean Turkey-EU trade market.

Transportation and logistics companies have also adapted their operations to Turkey’s changing infrastructure. Like the skyscrapers that redrew Istanbul’s skyline in the first decade of the 2000s, infrastructure megaprojects have reshaped Turkey’s transportation networks in the second decade.

After months-long delay—now seemingly customary for new international airports—Istanbul’s new airport opened on April 5, 2019, significantly boosting the city’s passenger and cargo capacities and cementing Istanbul's position as a major transit hub.

Also highlighting the spate of projects opened or in progress around Turkey are new highway and rail networks, revamped port infrastructure, new or upgraded regional airports, and an ongoing expansion of Istanbul’s subway system. Many of these projects have been financed by public-private partnerships (PPPs) or by private capital. ✖