Trans-Caspian route on the cusp of the container boom Review by Caliber.Az

Azerbaijan and its partners in Central Asian (CA) countries are implementing a roadmap for the synchronous expansion of cargo potential of the Trans-Caspian International Transport Route (TITR).

The project participants plan to increase cargo flow along the TITR by up to 500 thousand containers per year in the next seven years. This was stated by Kazakh President Kassym-Jomart Tokayev, speaking the other day in the economic capital of Saudi Arabia Jeddah at the summit "Central Asia + Gulf Cooperation Council (GCC)”.

The geopolitical changes of the last year and a half related to the Russian-Ukrainian war are prompting the countries of the Caspian region to deepen transportation cooperation, removing bottlenecks in the Middle Corridor logistics.

Launched in 2018 on the initiative of Baku, Ankara, Astana and Tbilisi, the Trans-Caspian route, which has now become the main component of the "Middle Corridor", originates in China and then transports cargo to Türkiye and European countries via Kazakhstan and the Caspian Sea, Azerbaijan and Georgia.

"Among the most important priorities of Kazakhstan - building the capacity of TITR, and we intend to systematically increase cargo traffic on this route to bring traffic to 500 thousand containers by 2030," Tokayev said at the GCC summit.

For comparison: in 2022, 33.6 thousand containers were transported via TITR, and the total volume of cargo traffic through the Caspian ports of Kazakhstan - Aktau, Kuryk and Azerbaijan Alyat and Govsan amounted to 1.5 million tons, increasing 2.5 times compared to the indicator of 2021.

It is appropriate to recall here that in order to further expand the cargo potential of the TITR in November last year the specialised structures of Kazakhstan, Azerbaijan, Georgia and Türkiye adopted a five-year roadmap aimed at synchronous expansion of the transport infrastructure of the route and identification of bottlenecks to eliminate delays in transit traffic. In particular, the parties agreed to jointly reduce the time of cargo delivery, improve the process of informing about the deployment of rolling stock, eliminate administrative barriers, etc.

Another goal is the digitalisation of the cargo flow passing through the route, which will simplify and speed up logistics many times over and allow for the expansion of the multimodal component in freight transportation. A joint virtual dispatch centre is already in operation for the smooth and accelerated passage of cargo and prompt resolution of emerging issues, and direct contacts have been established between shippers and railroads of Kazakhstan and Azerbaijan for prompt resolution of emerging problems.

The parties to the agreement are introducing mechanisms for simplified customs procedures, exchange of customs risk analysis and preliminary exchange of other information, thus making risk analysis available to all three countries, eliminating the need for duplication of control measures, and significantly reducing the loss of time when cargoes pass through the borders.

Not long ago, Astana and Baku signed an agreement on the creation of a logistics company for the development of TITR, and Georgia will soon join this document: the single company will be engaged in unifying tariffs and handling all cargoes on TITR, and its main task will be to carry out transit cargo transportation between China and Europe across the Caspian Sea via ferries, feeder vessels and further to the railways of the South Caucasus and Türkiye.

The participants of the agreement intend to reduce the terms of cargo delivery along the route from the current three weeks to 18 guaranteed days, and further - to 10-15 days. Moreover, due to the wide diversification of the route, in addition to energy raw materials, the transit of non-resource cargoes (chemical and mineral products, grain, metal concentrates, rolled products, consumer goods) from Central Asian countries to the European Union will increase.

The roadmap pays special attention to aspects of port and railway infrastructure expansion, and investments in these projects along the entire length of the route are expected to amount to about €6 billion. In particular, the states participating in the trans-Caspian crossing and their regional partners, Turkmenistan and Uzbekistan, are showing an increased interest in expanding container transhipment.

In this regard, in the near future, Kazakhstan will start work on the creation of a container hub on the basis of FEZ "Sea Port of Aktau", which will attract international consultants and investors. At the same time recently the Kazakhstan group of companies PTC Holding has created on parity with the Georgian partners the joint enterprise Poti Transterminal for the purpose of construction in the Black Sea port of Poti container terminal on the area of 8 hectares. It is planned to invest about $10 million in the project, the realisation of which will be completed by the end of this year, and the transhipment capacity of the terminal will be 80 thousand containers (in 20-foot equivalent) per year.

Port Poti - the most important transhipment point on the Black Sea for transportation of cargoes on TITR, and the new container terminal will allow Kazakhstani businesses to participate in the formation of cargo flows, will create favourable tariff conditions and will attract additional volumes of transit cargoes to the route.

Ashgabat is making similar plans, planning to build a container terminal with a capacity of 1 million tons of cargo per year in the Special Economic Zone of Turkmenbashi port.

It is noteworthy that Turkmen President Serdar Berdimuhamedov, who participated in the GCC summit, also noted the importance of establishing a special committee on transport for the formation of new transport and transit corridors and reliable logistics infrastructure. Ashgabat fully welcomes the expansion of Trans-Caspian cargo transportation and the development of the LapisLazuli route: last year, cargo transhipment between Turkmen and Azerbaijani ports on the Caspian Sea significantly increased to 3.359 million tons.

Uzbekistan, which has no direct access to the sea, is also extremely interested in the development of Trans-Caspian transhipment, and in order to further expand transit along the "Middle Corridor", a delegation led by Uzbek Prime Minister Abdulla Aripov visited Alyat port on July 19.

Recall that since the launch of the TITR in 2018 and through the second quarter of 2023, Uzbek shippers and receivers of cargo through the Baku International Sea Trade Port (BISTP) have handled 18,000 TEU containers, 22,000 railcars and more than 23,000 units of wheeled vehicles.

As a key logistics hub in the region, Azerbaijan is carrying out a large-scale modernisation of its main commercial port in Baku (BISCP), whose transhipment capacity will be increased to 25 million tons of cargo. Accordingly, the throughput capacity of the Baku-Tbilisi-Kars railway line (BTK) will be increased to 5 million cargoes, where, with Baku's financial support, modernisation of the section of the "steel highway" passing through the territory of Georgia has been underway since spring of 2023.

Thus, the capacity of the container terminal of Alyat port from the current 100 thousand TEU-containers in the medium term will be increased to 200-250 thousand TEU per year through the commissioning of a new specialised terminal for the transportation of containers. At the final stage, the capacity of BMMTP will allow it to handle 1 million containers annually.

All of the above steps to develop port and rail infrastructure and simplify cross-border and customs procedures in the Caspian littoral states ultimately contribute to a step-by-step increase in cargo transhipment along the "Middle Corridor".

As Kazakh Prime Minister Alikhan Smailov noted, by the end of 2023 the volume of cargo traffic along the Trans-Caspian International Transport Route will amount to 2 million tons, and by 2025 it will increase to 10 million tons. And if everything planned will be successfully implemented, then by 2030 the annual transit of containers alone along the "Middle Corridor" will be able to increase by more than ten times, in fact up to half a million.