BAKU, Azerbaijan, October 26. Asian countries are seeking new links with Europe and the Middle Corridor, or Trans-Caspian International Transport Route, is the best alternative, the official at International Transport Forum at the Organisation for Economic Cooperation and Development (OECD) told Trend.
The official noted that countries and regions react differently to the current supply chain disruptions, which are the result of situation in Ukraine.
“China subsidises landshipping expenses by covering “war insurance” costs. European traders are redirecting land cargo to maritime routes. This exacerbates the pressure on Asian ports and freight rates. It has also intensified the imbalance between low eastbound and strong westbound cargo traffic on the Northern Corridor,” the official said.
In addition, the official said, the restrictions on European airlines have given non-sanctioned Asian air-freight carriers a competitive advantage.
“Air transport is thus now viable on Eurasian routes for certain cargos. The shift to different transport modes and routes is accompanied by changes in the composition of traded goods. Previously dominant energy products and metals have been complemented by a broader range of freight goods. For example, Kazakhstan has increased its wheat and flour exports to Azerbaijan, China, Georgia, Iran, Pakistan and Türkiye, as well as new markets in the EU,” the official said.
Thus, Asian countries are seeking new links with Europe and the Middle Corridor, or Trans-Caspian International Transport Route, is the best alternative.
“It is 2 500 kilometres shorter on average than the Northern Corridor and can potentially cut rail journey times by seven to eight days. It could also boost trade among the countries it traverses. Already, the Middle Corridor sees increased freight flows,” the official said.
They noted that in the first quarter of 2022, freight volumes saw an on-year increase of 28 percent.
“In 2022, cargo transiting Central Asia and the Caucasus could grow sixfold compared to 2021, to 3.2 million tonnes. If connectivity gaps can be closed and bottlenecks opened (see below), considerable further growth is possible,” the official said.
The current geopolitical crisis could also provide momentum to create new rail links in the Eurasian network, they noted.
“The Kazakhstan-Turkmenistan-Iran (KTI) route, known as the Southern Corridor, can take freight from Europe to South and Southeast Asia through Türkiye, Iran and Pakistan, as well as to China via Turkmenistan, Uzbekistan and Kyrgyzstan. Part of it is already operating under the Economic Cooperation Organisation on the Islamabad-Tehran-Istanbul rail corridor (ECO ITI),” the official said.
However, they noted, the KTI still faces many constraints, among them missing links, political hurdles and sanctioned territories.
“Substantive progress has recently been made to revive the China-Kyrgyzstan-Uzbekistan (CKU) railway. In September 2022, the three countries signed an agreement to provide joint funding for a feasibility study for the Kyrgyzstan section of the railway, with the aim to launch construction in 2023,” the official said.