TBY talks to Markus Reckling, Managing Director of DHL Express Turkey, on the significance of the country to DHL's global portfolio, sectors that are seeing stronger exports, and the importance of localization.

Markus Reckling
Prior to being appointed Managing Director of DHL Express Turkey, Markus Reckling was Executive Vice-President, Corporate Development for the entire DP DHL Group and served in several other senior leadership positions within the Group. He started his professional career in 1993 and worked at the Otto Group and the Tengelmann Group in marketing, sales, and strategic market development. He holds degrees in European Business Administration from Middlesex University London as well as Reutlingen University in Germany. He also holds a Diploma of Marketing from The Chartered Institute of Marketing in London.

Considering your company's global reach, what importance do you give Turkey within DHL's international portfolio?

Very early on we recognized the potential of Turkey for our company. In 1981 we were the first company to offer international express services in the country. Later, we were the first express company to establish a fully owned subsidiary in Turkey. Turkey's geostrategic importance is a huge factor. The country serves as a bridge between East and West, Europe and the Middle East, and also as a bridge between cultures and civilizations. Over the last 10 to 15 years, based on growing domestic demand and exports to Europe and the US, we have seen the Turkish economy go from strength to strength and we have been very proud to be a part of this development. These days we are excited to see new trade lanes emerging; countries like Saudi Arabia and the UAE are suddenly amongst our fastest growing destinations, even in absolute terms. A shift is occurring, new relationships in different regions are developing, and we're promoting these new relationships and investing in them. Today, we are more than twice or almost three times larger than our nearest competitor. It has always been a very strong and stable environment for us, and the last decade has been even better in terms of revenue and profitability. The inflows we're generating into Turkey and the outflows we're generating from Turkey are roughly the same size, which is good for us, and fits well into Turkey's goal of growing exports. As for our part, we're seeing equilibrium in imports and exports. Our revenues are heavily export driven, and even our import business is export related, because a lot of the things we're importing are samples, spare parts, and project-driven items that usually create new exports. We're a very localized player in Turkey, and we apply the typical DHL strategy, which is to leverage the power of the network with a very localized team and a localized approach. It has served us very well. Strengthening exports for Turkey isn't just good for Turkey, but also good for DHL. Hence, DHL has been a very active promoter of strengthening Turkey's position as an exporter.

In which sectors are you seeing the most demand for Turkish exports?

The traditional export segments continue to dominate, although they've all slowed down a bit. The leading segments by far are textiles, automotive, technology, and electronics. Automotive has done better than we expected over 2013. Textiles showed a heterogeneous structure. Some customers are doing very well, especially those with links to Russia and the Middle East, while others are struggling, particularly those that export mainly to Germany and the UK. It hasn't been a homogeneous development this year. We also see first signs of Turkey shifting from a mere production hub for the “old economies" into developing its own brands and strong international OEMs. Expanding this will be crucial in sustaining the success of Turkish exports in the medium to long term. The firms that expand to foreign markets find the chance to revamp their operations in line with the know-how and new technologies they obtain in the international markets as well as the norms that force them to manufacture on a global scale. As Turkey continues to take firm steps forward toward its target of $500 billion in exports, each move made in exports plays an important role in the creation of new business opportunities. To show our commitment to support the efforts of Turkish exporters with the aim of developing, enriching, and diversifying Turkey's export mix, we host them at the “Stars of Exports" competition every year, which recognizes the achievements of firms that shape Turkey's push in exports.

Within the newly emerging trade lanes that you mentioned, what are Turkey's advantages for being an integrated logistics hub?

International trade is never independent of the basic economy, and trading has always been and will always be a key to the prosperity of the Turkish economy. Turkey, specifically the Istanbul area, rises as a leading international logistics and transportation hub with the advantages of its dynamic, stable, and attractive economy, increasing foreign trade, growing FDI, young population, low-cost labor, strength in pipeline transport, strong highway fleet, and its very central role regarding many upcoming markets and trading routes. Overall, I can say that Turkey has the right dynamics to become a major logistics hub. However, to better utilize Turkey's potential, we should increase the coordination in infrastructure investments both by the government and the private sector, as well as the magnitude and speed of these investments. Further steps should be taken to invest in customs procedures, especially to simplify import and export shipments as well as for improvements in the e-customs program to implement modernized customs processes in Turkey. As the market leader in the industry, our mission here is to increase our investments in new trade lanes in parallel with Turkey's objectives. We will resolutely sustain our efforts to expand our infrastructure and, as part of our exporters' pursuit of new markets, we will continue to offer services aimed at facilitating Turkish exporters' access to new customers and markets. Besides that, we will carry on our investments in technologies in order to support the fast and efficient integration of our customers into global markets. We always use cutting-edge technology and e-com solutions both through internet and mobile platforms.

How has being a global company with a strongly localized presence in Turkey affected your management style?

DHL is the most international company in the world. Taking our strength from this global network, DHL Express Turkey is very proud to connect Turkey to the rest of the world faster and more reliably than any other transportation company in the world. Keeping this in mind, you could answer this question from two angles. If you come here as an expatriate, you'll feel like this is very much a local company. On the other hand, if you've grown up in Turkish companies for 10 or 12 years of your business life and then came to work here, it would all be so different than a classic Turkish company. We're trying to combine the best of both worlds. This is a global network, and the power of this network we call “as one." The sending country and the receiving country work hand-in-hand, and this produces the quality that our customers want and expect. Hence, we need global procedures and global standards, and we need people to be able to speak to each other in English and run 24/7 operations. On the other hand, we're trying to be really local in the sense that we seek to exploit opportunities in the local market, use local energy, local motivation, and the local power of the people. Approximately 99.9% of our employees are Turkish citizens. Thinking globally and acting locally is more than a buzz word for us; it is an everyday reality. To give a very simple example: by combining the unparalleled global strength of our network with the unparalleled Turkish hospitality we created a product called “DHL Gift Express," through which companies can very easily buy and ship gifts from a DHL catalogue to anywhere around the world.

What is your broader outlook for the Turkish economy in the medium term, and where do you see DHL within that outlook?

As the express industry is an excellent but not leading current indicator for economic developments, we prefer to focus on the near term and leave the medium term forecasting to the economists. However, in the long term I can say that if Turkey keeps pushing the right agenda, it has healthy fundamentals upon which to build a solid future for economic prosperity. Turkey has huge potential, but some areas could also be improved. For example, the disunity between the labor market and the education system must be eliminated by investing more in education. The reality is that while in some professions there are serious job vacancies, while on the other hand in other professions college graduates can't find jobs, should be reversed. Additionally, the cooperation between industry and universities should strengthen. The simplification and re-covering of the customs legislation and the re-organization of the clauses will not only relieve companies and simplify processes, but also make sure the economy grows more strongly. Lastly, we observe that the Turkish economy is becoming more dependent on construction. Although this dependency keeps the economy alive in the short term, it can create a bubble in the long term, as seen in other countries. In order to have a stronger and more stable economy, production should be escalated and the dependency on Europe should be reduced. These three themes must be taken onto the agenda for Turkey to use its potential more efficiently.