The country that delivers its product to its buyers in the fastest and most cost-effective manner will be one step ahead.

ÜNSPED Customs Consultancy and Logistics Services Inc. Chief Executive Officer and General Manager Rıza Mehmet Korkmaz said that in this period when trade wars are changing shape with geoeconomic instruments and competitive conditions are becoming increasingly difficult, delivering the exporter's product to the buyer in the fastest and most affordable price has become more important than ever.

The pandemic and the subsequent Russia-Ukraine and Israel-Palestine conflicts caused fundamental changes in the global supply chain. As trade routes were reshaped, concepts such as 'near shoring' and 'friend shoring' began to come to the fore. On the other hand, while commodity prices increased rapidly, global consumption demand decreased in parallel with high inflation. ÜNSPED Gümrük Müşavirliği ve Logistics Services Inc., one of the experienced names in foreign trade. General Manager Rıza Mehmet Korkmaz emphasized that in this period when trade wars have gained a new dimension and competition has become increasingly difficult, delivering the exporter's goods to the buyer in the fastest and most affordable price has become more important than ever. Korkmaz explained to ECONOMY the priority steps to be taken in Turkey in the field of logistics.

“It is necessary to create a cost advantage”

Rıza Mehmet Korkmaz stated that Turkey needs to increase its competitiveness in order to achieve its growth targets with exports and said, "In order for a country to increase its competitiveness, it needs to reduce the cost elements while producing, marketing and delivering." So, what are these cost elements in logistics? Recalling the World Bank's research at this point, Korkmaz said that the cost of a one-day delay in the transportation of a good means a 1 percent contraction in the trade of that good. Again, a 10 percent decrease in export costs in a country creates a 4.7 percent increase in the country's total exports. The return of a country delivering its goods one day before a rival country provides an advantage or profitability of between 0.6 percent and 2.3 percent from this transaction. Likewise, a 10 percent increase in the transportation cost of a good causes a 20 percent decrease in the trade of that good. A one-day delay in the delivery of goods results in a 7 percent decrease in that country's time-based product exports. Korkmaz said, “These data show us that it is necessary to deliver the goods to the buyer as quickly and at the least cost as possible. We need to reduce the share of logistics costs in the final product to an average of 10 percent, as in developed countries. Considering that approximately 40% of the total time spent in transportation is caused by waiting at border gates, it seems that there is a need for initiatives and common practices that will facilitate customs procedures in countries along the way.” said. There are some good developments at this point, Turkey, which ranked 47th overall in 2018 in the World Bank's Logistics Performance Index (LPI), will rise to 38th place in 2023, again ranking 58th in 2018 in terms of facilitation in customs procedures. Stating that our country's rise to the 47th rank is a positive indicator, Korkmaz stated that there are still many steps that can be taken.

“Waiting times should be reduced and time advantages should be provided with paperless customs procedures.”
Stating that reducing waiting times in logistics processes will return a cost advantage to foreign traders, Korkmaz said, "All transactions must be fast, simple, easily understood/implemented and done in a digital environment." For this purpose, reducing bureaucracy in customs and foreign trade transactions, popularizing the "paperless customs" concept, modernizing the customs automation system BİLGE, which enables all transactions from the entry of the goods to the customs area to their exit in a real-time computer environment, by making use of blockchain technology and making it more user-friendly. Pointing out that the digitalization process should be accelerated, Korkmaz said, "In Turkey, the single window system (TPS) was introduced in 2012, which enables all documents required for customs and foreign trade transactions to be obtained from a single point and the necessary control and permit processes to be carried out electronically. TPS not only reduced red tape and the number of documents used in customs procedures, but also significantly shortened and accelerated business processes. While the number of documents received digitally in 2014 was 6, by 2022 this number increased to 173 documents issued by 21 institutions. Although this is an undeniable development, although electronic declaration was introduced in exports in 2019, e-declaration was still not implemented in imports. "We must rapidly increase digital applications in all transactions and prioritize integration in order to provide time advantage to our foreign traders by reducing the costs arising from waiting periods, to reduce errors, to collect tax revenues with the least amount of disputes, to effectively prevent illegal trade, and to facilitate processes in legal trade." said.

“Facilities should increase in YYS”

Stating that providing more convenience to companies with Authorized Economic Operator Status (YYS), which is a certificate that offers convenience and some important advantages in customs procedures to reliable companies that fulfill the prerequisites and meet other general requirements, will accelerate the customs processes, Korkmaz said, “More reliable, transparent, more accountable.” It is necessary to seriously facilitate customs processes for companies that can provide "Modern practices all over the world are like this," he said. There are over 700 companies in Turkey with YYS certification. More than 30 percent of Turkey's foreign trade is carried out through these companies. Korkmaz said, “These companies are accountable, transparent, recorded and inspected with measurable data. Therefore, it is necessary to truly implement and disseminate the facilitations related to these. In this way, the burden of the customs administration due to physical inspections, which reached 13% of imports in 2022, will be alleviated; and the expectations of these companies from the AEO system will be met. On the other hand, it is possible to provide a reputational advantage to our foreign traders in other countries with agreements (MRA) for the mutual recognition of economic operator (AEO) applications, which are the equivalent of the AEO application in the world.” made the statement.

“Market conditions must be taken into account in TAREKS transactions”

Evaluating the Risk-Based Control System in Foreign Trade (TAREKS), Korkmaz said: “Almost one in every five products imported to Turkey is subject to TAREKS application and the processes take quite a long time, especially when it comes to actual inspection. Although Tareks is a very important practice for consumer health and product safety in the market, at this point, tightening the controls and making the processes difficult will increase the waiting times and thus increase the costs. This situation may lead to an increase in inflation as it will be reflected in prices. It would be useful to look at this issue a little differently. For example, according to the data of the Ministry of Commerce, although 300 thousand batches of products were sent for inspection in 2022, only 6 thousand products (2 percent) seem to have problems. For this reason, it is necessary to shift the inspections from customs to more market surveillance, and to provide more convenience, especially to companies with AEOs. In this context, we think that product safety inspections of companies with AEO can be carried out in the companies' own warehouses after the customs procedures are completed. When you carry out these transactions at customs, an additional burden will be created for customs places and areas, waiting costs will increase, and serious storage fees will occur. It should also not be forgotten that there is a cost if the product does not reach the production lines or the consumer on time.”

'There is a need for coordination regarding logistics'

ÜNSPED Customs Consultancy and Logistics Services Inc. General Manager Rıza Mehmet Korkmaz stated that planning and effective coordination are essential to ensure coordination in logistics processes in Turkey, to establish modern logistics centers, to manage the entire supply chain effectively and efficiently, to increase the competitiveness of our country by accelerating the processes, and for this purpose, the Ministry of Commerce or the Ministry of Transport Pointing out that it would be beneficial to establish a general directorate or a strong independent Directorate related to logistics within the Ministry of Infrastructure, he said, “There seems to be a need for a holistic and integrated logistics management system in Turkey, but unfortunately the current ad hoc structures do not meet the need in this regard. "A competent unit that will respond to the first-hand needs of the sector will be one of the steps of integrated logistics management," he said.

Korkmaz also stated that more frequent coming together of the public and private sectors will contribute greatly to meeting the needs in the sector, and that the revitalization of the previously established Customs and Trade Council structure for this purpose will open a channel of regular cooperation and interaction and provide accurate information regarding foreign trade practices from all relevant parties of the private sector. He stated that it would be useful in terms of receiving timely feedback.

“We should focus on value-added products and market diversity”

Rıza Mehmet Korkmaz stated that in addition to what needs to be done in the field of logistics to increase exports, Turkey should focus on the export of products with higher added value, and that our exports, which have reached approximately 1.6 dollars as of this year, will increase per kg. He stated that we must definitely increase its value, which will result in positive results in terms of foreign trade balance. On the other hand, Korkmaz emphasized that the issue of reputation advantage is important and said, "Free trade agreements and preferential trade agreements with countries should be designed in a way that will increase our competitiveness and enable us to reach our target figures in exports more easily." said. Korkmaz also said that market diversification is necessary due to the recession in the EU, our most important export market, and that there are important opportunities in the nearby geography at this point. Pointing out that all developed countries conduct their most intense trade with their close neighbors, Korkmaz reminded that there is a need to renew the Customs Union with the EU and said, "Although it is not caused by Turkey, the blockage of this process brings with it many problems for our country. The immediate renewal of the Customs Union will enable Turkey to sit at the table as an equal party, especially in free trade agreements made by the EU with third countries and in other areas, and will turn our gains in this regard into a more positive model. We know that there are efforts regarding this. "I hope for a year in which Turkey's Customs Union process will progress positively," he said.
 
There are many opportunities for Türkiye in 'reexport'

Reminding that Turkey is a natural 'hub' with its geographical location, Korkmaz said that at this point, correct modeling of logistics centers will create great opportunities for Turkey, especially in 'reexport'. Pointing out that Hong Kong, Dubai and Singapore have achieved great profits through reexport, Korkmaz said, “There is a need for a different modeling regarding logistics centers in Turkey. Our port infrastructures should be strengthened, multi-modal transportation should be supported, facilitating measures should be taken in customs procedures based on prior data exchange in countries along the route, especially for transportation by train throughout the middle belt, our country's storage capacity should be increased with new warehouse investments, London Metal Exchange (LME) approved warehouse and warrant application should be implemented in our country. "This should also be passed, thus new financial instruments should be introduced to our country," he said.

26 January World Customs Day

Stating that January 26 is celebrated as World Customs Day all over the world every year, Korkmaz said that customs consultants and assistant consultants, who carry out more than 90 percent of customs and foreign trade transactions in Turkey, have an important role in our foreign trade with a community of approximately 15,000 people and over 50,000 employees. He stated that they are honored to contribute to the development of exports and the development of our foreign trade, which are vital for the development of our country, and on this occasion, he congratulated the World Customs Day of all customs employees who work without knowing the concept of time in the public and private sector.