Impact of Liner Shipping Connectivity on Container Traffic in Turkish Ports

Abstract

Demand for the transport sector is a derived demand; however, the transport sector is not only affected by the demand for the goods transported, but can also influence demand for itself by providing more transport facilities, which can affect trade by generating more options for foreign trade stakeholders. Accordingly, we have examined the effect of the Liner Shipping Connectivity Index (LSCI) variable, which is an indicator of countries' liner transportation connectivity, on Turkey's export and import container traffic, by using regression analysis. We have enriched our model by adding the real exchange rate variable, which is the most important factor affecting foreign trade. Our results show that a 1% increase in the country's LSCI increases export and import container traffic by approximately 1%. This result shows that not only exchange rate and production policies, but also transportation policies, are critical in improving foreign trade of the country. The development of transportation facilities can both reduce transport costs and shorten the delivery time, thereby supporting Turkey's policies to become a production centre.