"Middle Corridor" and non-stop cargo trucking Review by Caliber.Az

Over the past year and a half, the Eurasian market has seen a shift in the cargo traffic and the migration of trucking companies in the direction of the "Middle Corridor". This process has accelerated even more after the EU recently adopted the 11th package of anti-Russian sanctions, including a complete ban on the transshipment of goods by trucks with Russian trailers and semi-trailers. In Azerbaijan, on the contrary, the dynamics of cross-border road transport are increasing, and the number of domestic heavy-duty vehicles involved in international transportation has more than doubled. The achievements and new vectors of development of the sector were discussed on July 24 at an event dedicated to the activities of the Azerbaijan International Road Carriers Association (ABADA) in the first half of 2023.

The new anti-Russian sanctions under the 11th EU package, along with the suppression of the re-export through third countries of certain goods and technologies, include a set of restrictions on the international activities of the transport and logistics infrastructure of the Russian Federation.

Among other things, a complete ban has been imposed on the transportation of goods by trucks with Russian trailers and semi-trailers in order to prevent the circumvention of Western restrictions. These measures are designed to close loopholes for the transportation of goods by trucks registered in third countries, but at the same time transporting goods in Russian trailers and containers. Here it is necessary to take into account the colossal scale of cargo transportation in the vast Eurasian space, about 50% of which is accounted for by road transport.

In general, the long-term measures implemented since last year are aimed at shifting international transit from the "Northern Corridor" towards alternative routes, the most important of which experts of the European Commission (EC) consider the "Middle Corridor".

It is noteworthy that this decision affects not only Russian cargo carriers but also neighbouring countries, including forwarding companies of the Central Asian states, whose routes for heavy trucks are rapidly moving in a south-westerly direction - through the Caspian Sea and further transit through the South Caucasus and Türkiye. At the same time, over the past year and a half, the intensity of road transport along the North–South international transport corridor connecting Russia and Iran through our country has been increasing just as rapidly.

Azerbaijan has become the main beneficiary of all these processes, and last year the transit of goods through the country increased by more than 75 per cent, including a significant increase in transhipment by trucks. These positive trends were also observed in January-June 2023. In general, cargo trucking in the country amounted to about 60.761 million tonnes with an increase of 4.8 per cent.

This year, the road haulage in transit along the "Middle Corridor" is gaining more and more supporters in the European Union. So, in June, the initiative of the Permanent Secretariat of the TRACECA Intergovernmental Commission was launched, which organized pilot cargo transportation by truck tractors with semi-trailers on a multimodal route from Lithuania to Poland and further to Slovakia, Hungary, Romania, Bulgaria with ferry transhipment across the Black Sea to Georgia, Azerbaijan and further across the Caspian Sea to Kazakhstan.

Thus, recently Azerbaijan and its partners in the Trans-Caspian Corridor (TITR and TRACECA routes) - Türkiye, Kazakhstan, Georgia, with the support of the EC and other relevant EU structures, have been closely cooperating on the issue of simplifying cross-border and customs procedures, optimizing tariff policy. It is particularly planned to introduce unified electronic permits for cargo trucking in the near future.

Such close cooperation to optimize transit legislation and expand the infrastructure for cargo trucking is extremely important: since February last year, an unplanned increase in the volume of cross-border traffic has created a high density in the ports of the Caspian Sea. In particular, at the end of last year, the Secretary General of the TITR Association Gaidar Abdikerimov called the limitations in the infrastructure of Azerbaijan and Georgia the main bottleneck of the Trans-Caspian route. However, there are bottlenecks that have caused insufficient capacity of key infrastructure, such as railways, seaports, transshipment hubs, and highways, in Kazakhstan, as well as in other countries located along the "Middle Corridor". So, in July last year, over 800 and then almost 1,500 wagons en route to Kazakhstan and Turkmenistan accumulated at the Baku International Sea Trade Port (Port of Baku) in Alat.

The situation was aggravated by the sharply increased intensity of the transshipment of motor trucks, and due to the large cargo flow, heavy-duty trucks occupied a significant part of the loading areas on ferries and RO-RO vessels, reducing the transshipment rates of railway wagons. As a result, from July 10 to August 1, 2022, a temporary convention ban was imposed on ferry transportation of loaded railway cars for ferry crossings Alat - Kuryk, Alat-Aktau, and Alat - Turkmenbashi. To overcome these difficulties, Azerbaijan has been implementing large-scale projects to modernize the infrastructure of the Port of Baku since last year, including increasing the capacity to receive ferries and other types of vessels carrying motor vehicles, and capital-intensive modernization of the Baku-Tbilisi-Kars (BTK) railway corridor has been launched since the beginning of this year.

At the same time, in recent years, Azerbaijan has been making maximum efforts to optimize the process of international road transport. And this is logical, since, according to data at the end of last year, about 54% of all international traffic, including transit cargo transported through the territory of our country, falls on road transport. Accordingly, the supply is also growing: according to the Azerbaijan International Road Carriers Association (ABADA), twenty years ago there were only 200-300 international transport carriers in the country, now their number exceeds 7,000.

According to the State Road Transport Service under the Ministry of Digital Development and Transport of Azerbaijan, this process was observed most intensively last year: already in the first half of 2022, the number of Azerbaijani carrier companies involved in international road transport increased by 2.9 times, and the number of vehicles involved in this process increased 2.7 times - up to 7,208 units.

"Important steps have been taken in Azerbaijan to increase the transit attractiveness of the republic for international carriers: after the cancellation of issuing 'permit' forms for vehicles registered in foreign countries at state border crossing points, the number of trucks involved in international transport in Azerbaijan has more than doubled," Acting ABADA Secretary General Kanan Gurbanov said on July 24 during an event dedicated to the structure's activities in the first half of the year - Along with simplification of authorisation documents, the tax burden for carriers has also been eased".

According to the head of the association, in March-April, certain measures were taken for the convenient movement of domestic road carriers, in general, in the last two years, tangible positive changes have been observed in this area. Accordingly, if two years ago the number of Azerbaijani heavy trucks involved in international transportation was 3,500-4,000, today this figure has more than doubled.

And judging by the activities planned in ABADA, efforts to optimise the sphere of international road transport will be consistently increased. "It is necessary to increase the number of drivers engaged in international transport in Azerbaijan. To this end, ABADA conducts trainings for drivers, based on the results of which they are issued international certificates allowing them to work in 80 countries. To date, 1,137 of our drivers have international certificates," Gurbanov emphasised.

Starting next month, ABADA specialists will travel to the regions, hold meetings and study the problem on the ground. The largest number of domestic road hauliers is concentrated in Lankaran-Astara and Ganja-Gazakh zones.

The increased role of Azerbaijan in road freight transport in the Caspian-Black Sea region is evidenced not only by the attention of the EU structures to this process, but also by the support at the regional level. Baku has been chosen as the venue for the General Meeting of the Association of Road Carriers of the Organisation of the Black Sea Economic Cooperation (BSEC) scheduled for October 26, 2023.