Azerbaijan strengthening its position as major ferry carrier in Caspian
Review by Caliber.Az

ANALYTICS  29 April 2022 - 16:10

The stabilization of global trade since last year has expanded interest in transport and logistics corridors linking China and Central Asia with Turkey and Europe. In the post-pandemic period, this trend has only improved, especially amid the war in Ukraine, which forced cargo carriers to look for alternative routes for transshipment of dry, containerized and vehicle freight through the Caspian region. Taking into account the growing demand for railway ferry transshipment, the Azerbaijan Caspian Shipping Company (ASCO) is increasing its fleet, and placing orders for ferries and other vessels at the Baku Shipyard. Thus, the day before, Azerbaijani President Ilham Aliyev took part in the ceremony of putting into operation of Ro-Pax ferry "Zarifa Aliyeva".

According to the plans of Azerbaijan's partners within the framework of international transport projects: the European "Silk Road" and the Chinese "One Belt, One Road", a substantial growth of foreign traffic is expected along railway and ferry routes (TRACECA, TMTM, Lapislazuli) between the ports of the Caspian Sea, supported by the transshipment of transit cargo from China in the next few years.

According to European experts, these trends will dominate in the foreseeable future, and this will increase the requirement for new dry cargo ships, ferries, and feeder vessels carrying out transshipment of dry and containerized cargo in the Caspian Sea region. In order to meet tasks, the Caspian Shipping Company is consistently strengthening the process of integration into regional shipping projects, using new routes. At the same time, ASCO is carrying out a large-scale fleet renewal process, having acquired about two dozen of various types new vessels over the past decades, including vessels for transshipment of non-primary cargo.

This work is underway, and according to the plans, CJSC intends to purchase about 50 vessels, including cargo and passenger vessels, ferries, tankers, tugs, boats and crane vessels by 2030. It is noteworthy that most of the cargo ships will be built in Azerbaijan as ASCO is gradually placing most of the orders at the BakuShipyard. Its own shipyard (the plant was built in 2013) has allowed Azerbaijan to achieve significant self-sufficiency in tankers and ferries in recent years.

Thus, the first oil tanker of domestic construction "Lachin" with a deadweight of 7,800 tons was put into operation in December 2019. The Ro-Pax ferry "Azerbaijan" was launched in early March 2021, and in September the same year, the oil tankers "Kalbajar" and "Akademik Xoshbakht Yusifzade" were put into operation.
The construction of two more tankers is carried out at shipyards located in the industrial zone in the Garadagh district of Baku. At the moment the portfolio of BakuShipyard has a total of ten orders for the construction of various types of vessels: in addition to tankers, it is planned to build tugs, a 100-ton cargo crane ship DP1, a 50-ton pontoon crane ship, a 120-ton support vessel for the installation of anchors, etc.

In perspective, Azerbaijani shipbuilders are planning to receive orders on vessels from other Caspian littoral states, but Caspian Shipping Company is the main customer so far. So, the day before the ceremony of commissioning of the second Ro-Pax vessel "Zarifa Aliyeva", also built by order of ASCO, took place with the participation of the head of the state. President Ilham Aliyev cut the ribbon symbolizing the commissioning of the ferry and familiarized himself with the capabilities of the modern vessel.

The new multipurpose Ro-Rax ferry ships were designed by the Marine Engineering Bureau of Odessa, with which BakuShipyard has been successfully cooperating for years. The length of the vessel "Zarifa Aliyeva" (the same series as the ferry "Azerbaijan") is about 155 meters, with a width of 18 meters and a height of 7.5 meters. Informing the president about the potential of the new vessel, ASCO chairman Rauf Valiyev noted that by its carrying capacity and universality, ferries of this series exceed all ships of this type existing in the Caspian Sea.

"The Ro-Rax vessels built in Azerbaijan are designed for transportation of 100 passengers, 56 tank-wagons or 50 heavy-load lorries. Ferries have a maximum carrying capacity at a minimum draught, they are equipped with a system of balancing in windy weather, as well as a cargo elevator, traction locomotives and a helipad," Valiyev said.

These vessels were built mostly at the expense of ASCO's profits, and their operation is envisaged mainly within the framework of West-East routes. It is noteworthy that at present, 13 ferries of different series, two Ro-Ro vessels and now two Ro-Pax ferries are carrying vehicles and wagons in transit through Azerbaijan in the Caspian Sea. All these vessels belong to ASCO flotilla and today, CJSC is the only railway ferry operator on the Caspian Sea.

The positions of competitors in the Caspian region are much weaker. In particular, the Russian company "TransMorFlot" has two small passenger-car ferries, not designed for transportation of cars. Turkmenistan has two cargo-passenger ferries of "Berkarar" type, and Kazakhstan is transhipping containers with a feeder vessel Beket Ata. Thus, the Caspian Shipping Company will remain the major ferry carrier in the Caspian Sea in the foreseeable future, which gives grounds to expect multiple growths of orders for transshipment of non-oil transit cargoes.

It is expected that the new Ro-Pax ferries will be mainly involved in the transportation of container multimodal cargo within the Trans-Caspian International Transport Route (TITM), plying between the Kazakh ports of Aktau, Kuryk, as well as the port of Turkmenbashi and the Baku International Sea Trade Port (BISTP), located in Alat.

It should be noted that with the post-pandemic recovery of global trade, already in 2021, BISCP increased the volume of transshipment by 14.6% - up to 5.6 million tons. Moreover, during the reporting period transshipment of dry cargo in the Alat port increased by 66% - up to 1.183 million tons, also the container terminal handled 45,025 TEU - an 11.6% increase.

In the future, freight traffic between Caspian ports will increase, even more, thereby loading ASCO ferry ships. It is necessary to take into account China's plans to gradually increase the land segment of cargo transshipment in the western direction within the framework of the "Belt and Road" initiative.

Moreover, since last year these intentions have been backed up by weighty commercial reasons: the failure of the global logistics chain, the large-scale accident in the Suez Canal and the growth of transportation costs have led to a sharp rise in the cost of container shipping and ocean-going ship charters for shippers in China and Southeast Asian countries.

Under the circumstances, the cost of transporting goods by land has come close to the rising cost of maritime logistics, and the beneficiary of these processes was, in particular, Kazakhstan, through whose territory the transit of Chinese goods, including container trains, has noticeably increased.

These container trains, as well as trucks, are transshipped by ferries to Alat Port in Azerbaijan and then along the Baku-Tbilisi-Kars corridor via Georgia to Turkey and Europe. For example, China recently launched a new route for freight trains from the city of Xi'an (in northwestern Shaanxi province) through Kazakhstan, Azerbaijan, Georgia, Romania, Hungary, Slovakia and the Czech Republic with a terminus in the German city of Mannheim.

The first block train, loaded with 42 containers weighing a total of 316 tons, departed from Xi'an on April 13. Transshipment of cargo along this route, with a total length of 11,300 kilometres, involves a ferry crossing on the Caspian Sea, and here, in particular, the potential of the ASCO ferry fleet will be used.

In the last couple of years there has been a noticeable increase in freight traffic between the Central Asian states and Turkey as well: a wide range of non-primary goods, containers, and especially goods transported by road (mainly construction materials, agricultural and ore raw materials, food, clothing) have been transiting through Azerbaijan.

If 5-6 years ago about one and a half thousand heavy-load camions passed between the port in Alat and the ports Aktau, Kuryk and Turkmenbashi and back per year, these figures have increased many times in recent years. The transshipment of Turkish cargo trucks is another field of application of the new Ro-Pax ferries.

At the same time, against the background of the war in Ukraine, traditional international transit routes, which used to connect the European countries with Central Asia and the Far East, are being rearranged. Transshipment of transit cargo from the northern Scandinavian direction to the Black Sea ports, as well as transportation of Japanese and Korean transit cargo via the Trans-Siberian and BAM rail systems, has sharply decreased.

These circumstances are forcing many European and Asian carriers to curtail cooperation with Russian Railways and turn to alternative delivery routes, including the Middle Corridor - in transit through Central Asia and the South Caucasus.

Commenting on the possible impact of the Russian-Ukrainian war on freight traffic through Azerbaijan, BISCP CEO Taleh Ziyadov recently noted that the changed geopolitical situation tangibly increases the importance of the Middle Corridor, which plays an important role in connecting China to the Caspian and the Black Sea regions, Turkey, the Mediterranean Sea and Europe. Thus, the next stage of Azerbaijan's transformation into an international logistics center and Alat's function as a distribution hub is implemented. Obviously, the ferry fleet of ASCO will become a beneficiary of these processes together with the port of Alat.

Caliber.Az