It is anticipated that the countries of the South Caucasus will assume a pivotal role as a logistics hub in Eurasia

04.06.24 17:28

As the challenges and competition in the global economy intensify, the issues of logistics and the organisation of global transport flows are becoming increasingly salient. A manufacturer that is able to deliver goods to the consumer more expeditiously and cost-effectively will gain a competitive advantage over its rivals.


Soon, two key production centres—China and India—will emerge in Eurasia. There is already a clear indication of competition between them for transit routes. For China, the Middle Corridor, which connects it with European countries, and for India, the North-South Corridor, which connects it with the same European countries, are of particular importance. Both routes pass through the South Caucasus and the Caspian region.


The importance of the Middle Corridor has increased significantly following the imposition of sanctions against Russia in connection with its invasion of Ukraine. The Trans-Caspian International Transport Route, an international transport corridor that runs through China, Kazakhstan, the Caspian Sea area, Azerbaijan, Georgia, and onwards to Turkey and European countries, has gained particular significance in this context.


Consequently, the ongoing conflict in Gaza and the related activities of Yemen's Hussein in the Red Sea have further increased the demand for the North-South corridor. Currently, both the Middle Corridor and the North-South Corridor are undergoing significant developments on both routes.


For instance, in May 2024, the Baku-Tbilisi-Kars ('BTK') railway resumed its operation after undergoing modernization. On May 25, 2024, Turkish Minister of Transport and Infrastructure Abdulkadir Uraloglu shared the plans of the Turkish government in connection with the Baku-Tbilisi-Kars railway, commenting on the resumption of operation of the BTK railway after modernization.


The minister stated that, in the medium term, 200 trains per year are planned to run along this route, with the long-term objective of 1,500 trains annually. In this scenario, the transit time for cargo between Turkey and China will be reduced to 10 days, according to the minister's statement.


The Minister has indicated that the Baku-Tbilisi-Kars railway (BTK) has transported 1,470,000 metric tons of cargo to date. This highlights the significance of this transport artery for the entire region.


Nevertheless, it is also worth noting that significant progress has been made in the North-South corridor. Iran has completed the construction of the Resht-Enzeli section of the railway. The railway will connect the Caspian Sea (port of Enzeli) with the Persian Gulf (port of Bandar Abbas).


The new railway will facilitate the transportation of cargo from the Indian Ocean to Iran, subsequently via the Iranian railway system, and finally by maritime, riverine, or road transport from Astrakhan to St. Petersburg. The new trade route comprises river and railway routes that connect Iran and Russia via the Volga, Azov, and Caspian Seas.


The North-South route is considerably less expensive and more efficient to operate through Azerbaijan, obviating the necessity for cargo transloading for its transport across the Caspian Sea. It is possible to transport cargo from Astrakhan to Iran and back by railway. One of the two proposed projects must be initiated without delay to achieve this goal. The two options are as follows:


1. The completion of the Resht-Astara railway line.


2. The opening of the Zangezur corridor, or more specifically, its railway component.


Furthermore, the significance of the Zangezur corridor is that it can simultaneously become a key ‘railway link’ on the North-South route, connecting the railway system of Azerbaijan through Nakhichevan with the railway system of Iran and on the Middle Corridor (complementing the Baku-Tbilisi-Kars railway route).


In a statement on the reopening of the Baku-Tbilisi-Kars railway, Turkish Minister of Transport and Infrastructure Abdulkadir Uraloglu asserted that the Zangezur corridor, through which both road and rail connections will be established, will enhance the efficiency of the Middle Corridor, which will have a positive impact on freight traffic between London and Beijing.


It appears that, in the event of the successful implementation of all planned projects, the South Caucasus may potentially become a pivotal crossroads between the North-South and Middle Corridors.


It is regrettable that, until recently, Iran, seemingly at the instigation of certain external forces, has impeded both the implementation of the Resht-Astar project (which was originally scheduled for completion in close temporal proximity to the Resht-Enzeli railway line) and the opening of the Zangezur corridor. Only recently, the late Iranian President Ebrahim Raisi began to favour accelerating the construction of the Resht-Astara railway and not hindering the opening of the Zangezur corridor through Meghri and Nakhichevan. And, somewhat incongruously, the Iranian president's helicopter crashed shortly afterwards.


Nevertheless, there is reason to believe that the routes will be opened shortly, which would benefit the economies of both Turkey and Iran, as well as the countries of the South Caucasus. In particular, Georgia would become the most important logistical hub in Eurasia.


George Kvinitadze

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