The geopolitical situation in Eurasia increases the role of the Middle Corridor (Trans-Caspian International Transport Route), which includes Azerbaijan, in China-Europe cargo transportation, Report informs, citing an article published by Railfreight website.
The article says that the Dutch logistics firm Nunner and its Chinese counterpart Tiedada supply goods from China to Europe. However, the current Russian-Ukrainian conflict is expected to have a significant impact on international cargo transportation.
"Against the background of the shocking events and the human tragedy currently taking place in Ukraine, we are trying to keep the supply chain between Asia and Europe intact so that our customers in Europe and the rest of the world get their necessary supplies delivered", Nunner mentioned.
According to the article, the Middle Corridor route has gotten a lot of attention since the Russian invasion of Ukraine: "More and more companies are choosing to avoid transit through Russia, either because they consider the route insecure or because they disapprove of the decisions taken by the Russian government. However, the rail freight corridor between China and Europe more often than not includes transit through Russian territory. The Middle Corridor now seems to be the only viable alternative for those who do not want to deal with the Russian railways. The Middle Corridor has been there for many years and has seen some growth, but it is much less competitive than the main route (Belarus – Russia – Kazakhstan). This is because there are seas in between (Caspian Sea, Black Sea), and the rates are still relatively high. From Turkey, the markets in Europe that are most easily reached by train are the southern European countries. For these countries, it has been more viable to opt for the Middle Corridor. Now that the main route is not the first choice for many, the Middle Corridor will also start to appeal to western markets, with different transport solutions possible from Turkey onwards.
What is the level of cargo transportation through the Middle Corridor, including Azerbaijan?
According to the annual report of ADY Container LLC, a subsidiary of Azerbaijan Railways, the operator of cargo transportation through the Middle Corridor, the Middle Corridor is the most important international transport corridor among other routes passing through the territory of Azerbaijan. Container cargo transportation by rail is mostly carried out through this route. In the structure of cargo transportation carried out in 12 directions in 2021 through the territory of Azerbaijan on the Middle Corridor, the China-Turkey route ranks 1st, the Kazakhstan-Turkey route – 2nd and the Georgia-Kazakhstan – 3rd. The volume of container traffic on the Middle Corridor increased by 52% in 2021 compared to 2020 and in January-February 2022 by 15% compared to the same period in 2021.
National Secretary of the IGC TRACECA in Azerbaijan Rufat Bayramov told Report that there are many appeals to the Middle Corridor from Central Asian countries: "Some time ago, an official delegation from Kazakhstan visited Azerbaijan. Azerbaijan and Kazakhstan reached an agreement on the establishment of a joint operator between Azerbaijan, Georgia and Kazakhstan to make freight transportation between countries more efficient.
Bayramov noted that about 700,000 containers were transported through the Belarus-Kazakhstan-Russia corridor: "These were 20,000-foot containers. Our infrastructure cannot take this volume yet. However, some of these cargoes will pass through our territory, and the rest by sea. More than 50,000 containers were transported through Azerbaijan last year. They were transported via the East-West and Baku-Tbilisi-Kars railways. But our potential is huge. The role of the Port of Baku in this cargo transportation is also significant. The capacity of the Port of Baku is currently 150,000 containers.
He added that during the Russia-Ukraine conflict, cargo transportation in the direction of Belarus-Kazakhstan-Russia was carried out to a lesser extent: "Some cargos have been sent, but some Chinese don't want to carry the containers. This direction is not completely stagnant at present, but its potential has decreased."
The TRACECA official noted that only one modal transportation is carried out on the Kazakhstan-Russia-Belarus route: "However, multimodal transportation is carried out in the Middle Corridor. All this creates added value. Therefore, it is not easy to compete with our route in terms of price. Consultations are underway between the countries on an appropriate tariff policy. But in any case, we're trying to pay attention to issues that create added value."