08.02.20071 STATE OF AFFAIRS IN TURKISH TRANSPORT AND LOGISTICS SECTOR & FUTURE PERSPECTIVES MİNE KAYA CHAIRPERSON OF UND EXECUTIVE COMMITTE

08.02.2007 1

STATE OF AFFAIRS IN TURKISH

TRANSPORT AND LOGISTICS SECTOR & FUTURE

PERSPECTIVES

MİNE KAYACHAIRPERSON OF UND EXECUTIVE COMMITTE

2

ABOUT UND

UND WAS FOUNDEDON 14 MARCH 1974 INISTANBUL

IS A MEMBER OF FEDERATION OF INDUSTRIALASSOCIATIONS (SEDEFED),IRU, SECI,TRANSFRIGOROUTE,FIATA

FOUNDING MEMBER OFBSEC-URTA

UND Merkez

Etiler,İstanbul

4

WHO CAN BE OUR MEMBER?

MEMBERSHIP : 940

COMPANIES HAVING C2 LICENSE ISSUED BY THE MINISTRY OF TRANSPORT

REQUIREMENTS FOR OBTAINING C-2 LICENSE :

- AT LEAST 10 OWN VEHICLES (300 TONNE CAPACITY)

- TL 100 BILLION CAPITAL (OR OPERATIONAL CAPITAL)

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UND’S REGIONAL REPRESENTATIVE OFFICES

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UND TRAINING CENTER

19 September 2001 :

UND TRAINING CENTER was opened

and in 2002 it was accredited to IRU

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VISA SERVICES

On November 2002

UND opened its Visa and Services

Office in Mecidiyekoy,

a central location accessible by Members and

Diplomatic Missions

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SERVICES TO REDUCE COSTS OF UND MEMBERS

SYSTEMATICAL VAT REIMBURSEMENT

SAVING COSTS IN FUEL PURCHASES

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PUBLIC-PRIVATE PARTNERSHIPS

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MODERNISATION OF GÜRBULAK BORDER GATE

UND, modernized the Gürbulak Border Gate - the gate of Turkey to the East contributing the development of Turkish economy

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TRANSPORT AND LOGISTICS TRAINING SCHOOL

On March 2005, the New Building of Istanbul University Transport and Logistics Training School which was constructed throuh contributions from UND Members

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REGIONAL AND INTERNATIONAL COOPERATION

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BSEC-URTA UNION OF ROAD TRANSPORT ASSOCIATIONS IN THE

BLACK SEA COOPERATION REGION

UND is the Leading Transport Association in the BSEC Region

BSEC-URTA brings together road transport

associations of BSEC countries

under a single umbrella

IN 2004, UND PRESIDENT WAS SELECTED THE LIFE-LONG HONOURARY PRESIDENT

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NEA TURKEY

UND-NEA JOINT VENTURE

SIGNED IN 2004

TRAINING RESEARCH CONSULTANCY

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NEA TURKEY ACHIEVEMENTS AND PROJECTS

International Conference on the Southeast European Transport Axis

Netherlands Trade Mission SEKANS= Sectoral Benchmarking Study TINA Turkey

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TURKISH INTERNATIONAL ROAD TRANSPORT INDUSTRY

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Share of goods transport in Turkish transport

industry is 92 % Number of licensed international road transport

operators amounted to 1360 Capacity of own-vehicle fleet has exceeded

2 billion tonnes


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Turkish international road transport industry has one of the largest fleets in Europe with nearly 40.000 tractor-trucks

Most of this fleet is composed of EURO 1, 2 and 3 type trucks

Euro 4 and Euro 5 type trucks have started to be introduced in the market


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53 % of Turkish exports are carried by Turkish road transport opeators

In 2006, Turkish trucks carried out nearly 1 million export trips

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• Net Foreign Exchange Revenue for the last decade

• Net Foreign Exchange Revenue for the last decade

US$ 20 BillionUS$ 20 Billion

• Employment• Employment 300.000

300.000 • Total Investment• Total Investment US $ 3.5 Billion US $ 3.5 Billion

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DATA ON TURKISH LOGISTICS SECTOR

FOREIGN EXCHANGE REVENUE CONTRIBUTION TO TURKISH ECONOMY : US$ 8 BILLIONS

CONTRIBUTION TO GDP : US$ 11-12 BILLIONS

UND AIMS TO

MAKE TURKEY THE REGIONAL LOGISTICS CENTER AND TO RAISE THE VALUE ADDED PROVIDED BY THE

SECTOR TO THE ECONOMY UP TO 45 BILLION DOLLARS BY 2012

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Today Turkey, situated at the crossroads of a 600 billion dollar worth flow of goods between East and

West; in the heart of the Eurasian trade with her extensive road network, railways, seas surrounding 3 sides of the country, airports and distribution centers;

is connecting Europe, the Balkans, Black Sea, Caucasus, the Middle East and the North Africa.

Thanks to this strategical position, she has the potential for becoming the most significant logistics hub in this geopolitical setting and this potential has

been realized day by day.

Today Turkey, situated at the crossroads of a 600 billion dollar worth flow of goods between East and

West; in the heart of the Eurasian trade with her extensive road network, railways, seas surrounding 3 sides of the country, airports and distribution centers;

is connecting Europe, the Balkans, Black Sea, Caucasus, the Middle East and the North Africa.

Thanks to this strategical position, she has the potential for becoming the most significant logistics hub in this geopolitical setting and this potential has

been realized day by day.

TURKEY

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UND AIMS TO MAKE TURKEY THE REGIONAL LOGISTICS CENTER AND TO RAISE

THE VALUE ADDED PROVIDED BY THE SECTOR TO THE ECONOMY UP TO 45 BILLION DOLLARS BY 2012

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31ST IRU WORLD CONGRESS

WILL BE HELD IN ISTANBUL

ON 15-17 MAY 2008

WITH THE THEME: REVIVAL OF THE ANCIENT SILK ROAD

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HARMONIZATION WITH THE EU LEGISLATION

Transport sector is one of the most prepared sectors for the EU Membership

Harmonization with the EU Acqui = 70 %

Transport Master Plan ≈ EU White Paper on Transport

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UND AND SECTORAL HARMONIZATION WITH THE EU

“Assistance to Turkish Road Transport Sector: Gap Analysis” Project

Turkish Turkish road transport legislation and the EU legislation were scanned and were compared to each other

An Action Plan aimed at full harmonization was submitted to the Ministry of Transport

“Assistance to Turkish Road Transport Sector” project was officially launched on May 2006

Project budget: EUR 5.5 million 14 different institutions and bodies involved

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SECTORAL HARMONIZATION WITH THE EU

Improvement in Legislation:

2003 ► New Law on Road Transport

2004 ► New Regulation on Road Transport

2004 ► Regulation on Professional Competency Training for Road Transport Operators

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SECTORAL HARMONIZATION WITH THE EU

EU’s 3 BASIC CRITERIA FOR ACCESSION TO THE PROFESSION :

- Professional competency - Good repute

- Financial standing

were incorporated into Turkish legislation…

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UND AND SECTORAL HARMONIZATION

WITH THE EU

In 2004, UND Training Center became the

first institution to be accredited to organize

Professional Competency Training

Cooperation with IRU Academy

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HARMONIZATION WITH THE EU

TURKEY HAS BEEN PAYING CONSIDERABLE

EFFORTS TO FULFILL HER OBLIGATIONS

TOWARDS FULL MEMBERSHIP TO THE EUROPEAN UNION !

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EU ENLARGEMENT (May 2004 & January 2007)

A new front for Turkish hauliers ! Advantage for 12 new EU members

- low labor costs

- no transport permit/visa problems

- freight costs decreased by 25 %

- right to carry out cabotage transport Lucrative EU market ►New business

opportunities Increasing competition !

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PROBLEMS OF TURKISH HAULIERS

60 % of Turkish exports flows to EU

of which : 90 % is carried by road In last 3 years, Turkish exports ►increased by 50 % In last 3 years, road transport operations to EU

► increased by 26%

►Increase in transport operations < increase in exports

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In last 4 years, Turkish exports ► increased by %138 EU increased quotas only ► by 32 % !

limiting vehicles carrying exports

↓ ↓ ↓

limiting exported goods

↓ ↓ ↓

restricting foreign trade

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EU-TURKEY CUSTOMS UNION since 1996 ► Free movement of goods

Article 28 and 29 of the Treaty establishing EEC

General Agreement on Tariffs and Trade

- Article 5 ► Freedom of Transit

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UND AND QUOTA PROBLEM

Transport Permit Quotas:

Increase transit time Increase transport costs

Need for alternative routes and transport modes

ROAD TRANSPORT IS INDISPENSABLE !

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UND IS DETERMINED TO SOLVE QUOTA PROBLEM !

HALKALI-WELS RO-LA SERVICE is

operational since 21 September 2006:

UND-TCDD-RAIL CARGO partnership capacity of 20 trucks One trip takes 70 hours 1979 kms = the longest Ro-La route in the world Will eliminate the quota problem & congestion at

Kapıkule

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SITUATION IN

TURKISH-HUNGARIAN RELATIONS

2002 2003 2004 20052002-2005% change

EXPORT(000 $)200.934 284.647 349.938 379.092 89%

IMPORT (000 $)325.902 416.863 705.407 946.238 190%

FOREIGN TRADE (000 $)526.836 701.510 1.055.345 1.325.330 152%

EXPORT TRANSPORTOPERATIONS (Number of Trips) *

3.381 4.095 4.746 5.461 62%

Between 2002-2005Turkish exports to Hungary increase by 89 %

BUT export transport operations by Turkish trucks increased by 62 %

COMPARISON OF TRADE AND TRANSPORT GROWTH BETWEEN TURKEY AND HUNGARY2002-2005

38

SITUATION IN


2005 2006 % change

EXPORT (000 $) 379.092 484.567 27.8

IMPORT (000 $) 946.238 1.277.314 35

FOREIGN TRADE (000 $)

1.325.330 1.761.881 33

EXPORTTRANSPORTOPERATIONS TO HUNGARY (Number ofTrips)

5461 5.983 10

Between 2005-2006, Turkish exports to Hungary increased by 27.8 %

BUT export operations by Turkish vehicles only increased by 10 %

COMPARISON OF TRADE AND TRANSPORT GROWTH BETWEEN TURKEY AND HUNGARY2005-2006

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SITUATION IN


2002 2003 20042005

2006 % CHANGE

(2005-2006)

3.381 4.095 4.746 5.461 5.983 10 %

EXPORT TRANSPORT OPERATIONS TO HUNGARY BY TURKISH TRUCKS

Export transport operations to Hungary by Turkish trucks have been consistently increasing

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SITUATION IN


In 2005, 7 % decrease in transit operations through Hungary by Turkish trucks was a result of high amounts of penalties imposed on use of permits and ECMT licenses.

TRANSIT OPERATIONS THROUGH HUNGARY BY TURKISH TRUCKS

2002 2003 20042005

2005

(January-November)2006

(January-November%

CHANGE (2005-2006)

37.209 39.723 42.790 39.79735.602 36.261 2%

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SITUATION IN


FREE OF CHARGE PAYABLE

Bilateral /Transit (Conventional)

3,000 16,400

Bilateral/Transit (Euro 1)

7,000 0

Bilateral/Transit (Euro 2 ve 3)

11,500 0

Third country 2,000 0

Total 23,500 16,400

TRANSPORT PERMIT QUOTAS ALLOCATED TO TURKISH TRUCKS

42

SITUATION IN TURKISH-HUNGARIAN RELATIONS

SOLUTION:

Transport permit quotas are insufficient compared to the increase in transit, bilateral and third country transport operations.

Permit quotas for Turkish trucks ( especially free of charge and 3rd country permits) should be increased …

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SITUATION IN


Quotas allocated to Hungarian trucks are more than the required number. There are 13 thousand free of charge bilateral / transit and 6250 third country permits allocated in return for 3-4 thousand trips. Hungarian trucks will not be affected even if payable permits are not sent to Hungary.

FREE OF CHARGE PAYABLE

Bilateral / Transit (Conventionel)

13,000 16,400

Third country 6,250 0

Total 19,250 16,400

TRANSPORT PERMIT QUOTAS ALLOCATED TO HUNGARIAN TRUCKS

44

INSUFFICIENCY OF PERMIT QUOTAS

The last Turkish-Hungarian Joint Transport Commission meeting was held on 3 October 2006 in Budapest:

There was no increase in transport permit quotas, the Hungarian side did not accept the Turkish request for an

increase in the number free of charge permits.

Turkish side suggested amending the current 3 to 1 bonus scheme as 1 to 1 bonus scheme granted in return for train usage similar to the bonus scheme in Austria.

Hungarian side rejected any amendment in the bonus scheme.


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USE OF RO-LA TRAINS BY TURKISH TRUCKS

YEARS

SZEGEDWELS

ARADWELS

ARRIVAL RETURN ARRIVAL RETURN

1999 8.259 7.443 0 0

2000 4.359 4.312 0 0

2001 3.681 3.602 0 0

2002 3.812 3.732 0 0

2003 3.299 3.075 0 0

2004 2.820 2.697 0 0

2005 3.213 3.129 0 0

2005(10 MONTHS)

2.739 2.659 0 0

2006(10 MONTHS)

4.446 4.158 17 14

The requested change in the Bonus Scheme ( 1 to 1 ratio) will provide for a 100 % increase in use of Ro-La trains

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48-HOUR LIMIT ON THE VALIDITY OF PAYABLE PERMITS

Charges imposed by Hungary for transport operations (single trip):

HUF 30.000 (approximately EUR 121) for transport operations to Hungary,HUF 60.000 (approximately EUR 242) for transit operations through Hungary

The abovementioned charges are imposed on vehicles from non-EU countries regardless of whether they are empty or laden.

SOLUTION: Hungary should either

abolish the 48-hour limit for validity of authorization (operations to Hungary) or

extend the period of validity of authorizations from 48 hours to 96 hours


47

SITUATION IN


OTHER PROBLEMS AND REQUESTS

Exemption of tractors and empty trucks from permit requirement

Exemption of green trucks

Limitation on the period stay in Hungary :

the period stay should be equal to the validity of visa

Facilitation of visa procedures :

Fines imposed in Hungary are higher than average

Mutual recognition of Driving Licenses

48

2002 2003 2004 20052002-2005% change

EXPORT(000 $)200.934 284.647 349.938 379.092 89%

IMPORT (000 $)325.902 416.863 705.407 946.238 190%

FOREIGN TRADE (000 $)526.836 701.510 1.055.345 1.325.330 152%

COMPARISON OF TRADE AND TRANSPORT GROWTH BETWEEN TURKEY AND HUNGARY

2002-2005

49

Trade between Hungary and Turkey has been rapidly growing !

There are good prospects for cooperation

Solving problems in transport, will further grow bilateral trade…

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THANK YOU FOR YOUR ATTENTION

Documents

08.02.20071 STATE OF AFFAIRS IN TURKISH TRANSPORT AND LOGISTICS SECTOR & FUTURE PERSPECTIVES MİNE KAYA CHAIRPERSON OF UND EXECUTIVE COMMITTE