This article by Bruce Barnard originally published on JOC.com.

LONDON — Politics will continue to dominate Turkey’s headlines at home and abroad in 2018, as President Recep Tayyip Erdogan steadily tightens his grip on the country, after the failed coup in 2016 further strains relations with the United States and Europe. 

Still, despite high-profile politics’ ability to capture international attention, Turkey’s transport sector could also hit the global headlines, albeit briefly, if its former prime minister sticks to his pledge to start work this year on his self-acknowledged “crazy project” for a 32-mile canal to divert shipping from the heavily congested, 19-mile Bosphorus Strait that divides Europe and Asia and links the Black Sea with the Sea of Marmara, the outlet to the Mediterranean.

Erdogan’s waterway plan, optimistically priced at about $10 billion, "that will outshine the Panama and Suez canals," is seen by some as a politically inspired project; its scheduled completion in 2023 coincides with the centenary of the founding of the Turkish Republic following the collapse of the Ottoman Empire.

The “crazy” canal, 60 miles west of Istanbul, which was first promised by Erdogan ahead of the general election in 2011, would be able to handle about 160 ships per day, including tankers up to 300,000 dwt, feature two-way traffic, and not have the locks or sharp turns that congest the Bosphorus Strait.

Furthermore, the canal would substantially reduce transit times of the more than 53,000 ships that sail through the Bosphorus Strait every year. But its commercial viability is open to doubt, due to uncertainty about how many companies will be prepared to pay to substantially higher transit fees, as the 1936 Montreux Convention compels Turkey to guarantee free passage through the Bosphorus Strait for merchant ships of all flags.

Although the Istanbul waterway remains in doubt, another much-publicized, mega-project dating back to 2011, a third Istanbul airport, to rank among the world’s largest for passengers and cargo, is close to completion. Its first terminal is due to open in the first quarter 2018 — well ahead of the originally scheduled November 2018 open. (This also contrasts with the Berlin Brandenburg airport, which is due to open in October 2020 — nearly a decade later than planned.)

The opening of Istanbul’s third airport will be a major boost to the nation’s plans to become a global logistics hub on the crossroads between Europe, Asia, and the Middle East.

The new, six-runway airport will be able to handle 5.5 million tonnes of freight and 150 million passengers per year when fully completed. It also will boast a 1.4 million square meter land area and a “cargo city” able to accommodate 29 freighters.

Turkey’s current largest airport Istanbul Ataturk is on a roll, with traffic jumping 15.8 percent in the first 10 months of 2017, compared with increases of 4.9 percent at Frankfurt Airport, Europe’s top air cargo hub, and 2.5 percent at second-ranked Paris Charles de Gaulle Airport.

The construction of the new airport has been flanked by the rapid and accelerating growth of Turkish Airlines’ cargo traffic, which surged 26.8 percent in the first three quarters of 2017 to 810,489 tonnes, accounting for 11.3 percent of the carrier’s total $8.2 billion revenue during the period. This followed a 38 percent surge in 2016 to 875,000 tonnes, which pushed the airline up four places to 16th in the global freight rankings.

Turkish Airlines’ chief cargo officer Turhan Özen has said the carrier is aiming to be one of the world’s top five freight airlines in 2023, an ambitious goal that will be eased by the imminent opening of the new Istanbul airport, which will challenge its Middle East Gulf rivals as the leading Euro-Asia hub and remove the constraints imposed at its current hub at Istanbul Ataturk airport.

And although Europe’s leading carriers are steadily shrinking their freighter fleets — Air France-KLM operates six freighters, down from 13 in 2013 and 26 when the French and Dutch airlines merged in 2003 — Turkish Airlines is growing its all-cargo operations. This was underscored by Turkish Airlines’ recent decision to switch an order for two Boeing 777 passenger jets to 777 freighters, which will boost its coverage on long-haul routes, followed by a contract for three more 777Fs in December.

Meanwhile, as the new airport and the potential waterway dominate the headlines, Turkey’s shipping, logistics, and port companies are steadily growing their operations at home and abroad.

Yildirim, the family-owned industrial and shipping/shipbuilding conglomerate, continues to set the pace, with chief executive Robert Yildirim confident its port arm, Yilport, currently 15th in the world rankings, will jump into the top 10 by 2025 through organic growth and acquisitions.

Yildirim, earlier had eyed the sale of its 24 percent stake in French container carrier CMA CGM to fund its planned acquisition of Ports America, a US terminal operator, but the deal never took off and the company plans to hold on to its estimated $3 billion stake; the company paid $600 million to rescue the Marseille-based line seven years ago.

Yilport continues to expand capacity across Europe while it waits for terminal prices to drop — which would pave the way for cheaper acquisitions. In December it announced it is doubling capacity at the Port of Gavle on Sweden’s west coast to 600,000 TEU by the fourth quarter 2019. That contrasts with the dire situation at the country’s largest port, the Port of Gothenburg, where traffic has crashed to an all-time low, due to a long-running industrial dispute at APM Terminals container facility and ACL, a 50-year customer that canceled direct calls, due to sliding productivity.

Further, the decreasing likelihood of Turkey joining the European Union — the best it can hope for is an “anchor” deal similar to one Ukraine is targeting — has failed to deter the transport sector’s involvement in the 28-nation bloc, with leading companies boosting investments, particularly in ports and rail freight.

One example: Ekol Logistics recently opened new branches in Paris and Lyon, as it seeks to increase traffic on its rail freight service between the French capital and the Mediterranean port of Sete, which it serves with a roll on, roll off (ro-ro) service from Turkey. The company also acquired a 65 percent stake in Europa Multipurpose Terminals in Italy’s Port of Trieste, its hub for block train services to Central Europe from where it is running a service to the German Port of Kiel, where trailers are transhipped on ro-ro vessels to Gothenburg. It recently began a service between Budapest and Cologne and is targeting a link between Trieste and Zeebrugge, as it expands its European footprint, which now involves almost 50 weekly services.

Meanwhile, Turkey’s Mediterranean presence has been consolidated by UN Ro-Ro’s 215 million euro ($257 million) acquisition of its domestic rival Ulusoy Ro-Ro, which added four ships to the group’s dozen ro-ro vessels that transport trucks to Trieste and Toulon in southern France, enabling them to avoid long lines at the Bulgarian border and bypass congested and underdeveloped roads in the Balkans.

UN Ro-Ro, founded by Turkish truckers in 1994, was acquired by KKR in 2007 for 910 million euros and sold seven years later by the US private equity fund for an undisclosed sum — reportedly at a loss — to a joint venture between Actera Group, owner of Pegasus, Turkey’s second largest airline, and investment company Esas Holding.

Turkey also muscled into Beijing’s One Belt, One Road project in October with the launch of a 515-mile rail link with Azerbaijan and Georgia dubbed the “Middle Corridor” that connects Europe and China and bypasses Russia.

And, there is more to come from Turkey’s transport, due to Turkey’s growing economy. Its GDP increased 11.1 percent year on year in the third quarter of 2017 and is expected to post a 7 percent rise for the whole year.

But for now all attention is focused on whether Erdogan will press the "Bosphorus button."