Another step in the development of rail transport along the Middle Corridor is the memorandum of understanding between China and Azerbaijan

The volume of cargo traffic along the Middle Corridor, the Trans-Caspian International Transport Route (TITR), has been increasing at a rapid pace. By the end of 2023, the volume of traffic along this route had increased by 65% to almost 3 million tonnes. Concurrently, the World Bank has projected that by 2030, the volume of traffic will have tripled.

The demand for transport via the TMTM is explained by objective factors, namely the route's greater speed. Containerised cargo shipped through the Middle Corridor reaches its destination approximately three times faster than the sea route. In particular, cargoes from China via Kazakhstan and the Caspian Sea are delivered to Baku in 8-10 days and to the Black Sea ports of Georgia within 10-12 days.
As forecast by the World Bank, the projected reduction in transit time along this route by 2030 will be twofold. Consequently, cargoes from China to the ports of Georgia, including the planned deep-water port of Anaklia, will be delivered within five days.

It is evident that the acceleration of cargo transit along the Trans-Caspian International Transport Route (TITR) hinges on the establishment of close interaction and collaboration between cargo transportation operators along the entire route, particularly railway operators.

It is therefore evident that the Memorandum of Understanding between the Government of the Republic of Azerbaijan and the Government of the People's Republic of China on the Development of Trans-Caspian International Transport Routes for the China-Europe Railway Express, signed in early July 2024, is of significant importance. On 15 August 2024, President Ilham Aliyev signed a decree approving the aforementioned Memorandum.

On the occasion of the signing of the Memorandum, China Railways inaugurated a new regular train route from Xi'an, the main hub for railway freight traffic from China to Europe, to Baku. The inaugural train departed on 1 July 2024, originating from Xi'an and arriving in Baku via the Khorgos border point in China's Xinjiang Uygur Autonomous Region, traversing Kazakhstan and the Caspian Sea.

From this point, some cargoes are transported to Europe via Georgian ports or by the Baku-Tbilisi-Kars railway. Consequently, to enhance the efficiency of the transportation system along this route and to increase the volume of freight traffic along the Middle Corridor, Azerbaijan Railways CJSC (AŽD) established a joint venture, Middle Corridor Multimodal Ltd, in 2023. This venture was established on parity terms with Kazakhstan Railways JSC and Georgian Railways JSC.

At present, Azerbaijan Railways CJSC is contemplating the potential acquisition or construction of its railway terminal in China. From Azerbaijan's perspective, establishing its terminal in China is a crucial step towards streamlining export-import operations, which are experiencing a notable surge in volume. The results for 2023 indicate a 540% increase in imports to Azerbaijan from China. Consequently, China has become the second-largest supplier of goods to the Azerbaijani market, with Russia remaining the primary supplier. Azerbaijan is seeking to expand its exports to China, which currently lag behind imports.

The ownership of railway terminals typically permits foreign trade participants to temporarily store goods, load and unload products, and provide intermodal transportation. In China, such a terminal can also be utilized by new participants in the Middle Corridor, including Central Asian countries, as well as other states. This will facilitate the growth of transit along the Trans-Caspian International Transport Route.

Vladimir Tskhvediani
Azerbaijan-Georgia-Turkey Strategic Partnership Information Support Centre

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