Azerbaijan's Middle Corridor: Key link in global trade between Asia & Europe

The Trans-Caspian International Transport Route, commonly referred to as the Middle Corridor, is a significant logistics initiative that commences at the China-Kazakhstan border and traverses Kazakhstan, the Caspian Sea, Azerbaijan, and Georgia, ultimately reaching Europe. This strategic corridor establishes Azerbaijan as a pivotal transport hub within the Eurasian region, enhancing connectivity and facilitating trade across multiple borders.

Expanding railway routes in the Middle Corridor

Significant progress is being made on the Middle Corridor, which is the shortest and most convenient route for cargo transportation from Central Asian countries to Europe and Africa. Currently, Azerbaijan Railways (ADY) and China are discussing ways to increase the number of railway services to Europe. Emil Mammadov, Chairman of Azerbaijan Railways (ADY) JSC, made this announcement during his speech at the "Black and Caspian Freight Forum 2024" on September 18.

Mammadov stated, "For the past year, we have been focused on the maintenance of the Baku-Tbilisi-Kars (BTK) corridor. We have completed work on the main operational and maintenance aspects, and the key connection has been restored, which will be operational from June 2024. As a result, the transmission capacity of the line has increased from 1 million tons to 5 million tons."

This significant increase in carrying capacity further enhances the importance and attractiveness of the Middle Corridor. According to data from the past five years, there has been an increase of over 110% in the volume of cargo transportation along the Middle Corridor. In the first six months of this year, there was a 15% increase in transportation compared to the same period last year, with more than 20% growth in transit transportation.

Mammadov also noted that increasing the number of railway routes to Europe would create opportunities for China to enter the European market. "In terms of the connections between Azerbaijan, the Central Asian region, and Turkey, this is the shortest land route. It enables not only traditional cargo transportation but also continental rail supply. We are discussing with our Chinese partners the possibility of increasing the number of rail routes to Europe, which would provide an additional opportunity for China to access the European market," he added.

Increasing the number of railway routes within the Middle Corridor project would significantly enhance China’s ability to enter and compete in the European market. By improving connectivity and reducing transit times, this expansion not only benefits China but also promotes regional cooperation and economic growth along the corridor. As infrastructure investments and strategic partnerships develop, the Middle Corridor is set to become a key artery for trade between Asia and Europe.

Northern Corridor faces decline amid geopolitical and economic shifts in Eastern Russia

Speaking at the event, Kanat Kobessov, co-chairman of the Supervisory Board of Kazakhstan's NurZhol Company and head of the National Exporters' Association "KazGrain," noted that the Middle Corridor is experiencing a significant increase in cargo flow.

According to him, despite current economic difficulties, global trade is projected to grow each year in the coming years.

"In recent years, the Eurasian region has become an increasingly important part of the global transport system. Three main corridors play a critical role in this process. The Northern Corridor, passing through Eastern Russia, is losing its position due to geopolitical and economic changes. In contrast, the Middle Corridor, which runs through Kazakhstan, is showing active growth. Additionally, the newly formed Southern Corridor connecting Central Asia and Kazakhstan should also be highlighted. The railway connection is vital for developing this infrastructure, and it is expected that new routes will be added to expand the railway network," he stated.

It should be noted that the Northern Corridor through Eastern Russia represents a significant opportunity for enhancing trade and economic cooperation across continents. With ongoing investments and strategic initiatives, it aims to become a vital link in the global supply chain, promoting sustainable economic growth while addressing environmental concerns.

Geographic significance:
- The Northern Corridor primarily runs through Eastern Russia, linking key cities and regions, and extending towards Europe and Asia.
- It connects the Arctic Sea routes with rail and road networks, promoting trade with both neighboring countries and global markets.

Transport infrastructure:
- Railways: The Trans-Siberian Railway plays a crucial role, facilitating efficient freight transport across vast distances. Ongoing upgrades aim to improve capacity and speed.
- Roads: Major highways and new road projects enhance connectivity between remote areas and urban centers, ensuring smoother logistics operations.
- Ports: Development of Arctic ports like Murmansk and Vladivostok enables year-round shipping, crucial for trade with Europe and Asia.

Economic impact:
- The Northern Corridor enhances trade routes, making Eastern Russia a pivotal hub for the export of natural resources, including oil, gas, and minerals.
- It opens up opportunities for economic collaboration with countries along the route, boosting local economies and industries.

Strategic initiatives- Belt and Road Initiative: The Northern Corridor is aligned with China’s Belt and Road Initiative, aiming to create efficient trade routes between Asia and Europe. Regarding the "One Belt, One Road" initiative, it is important to note that Azerbaijan was the first country in the Caucasus region to support this initiative proposed by China. In this context, Azerbaijan serves as a logistics center, hub, and bridge in the implementation of the "One Belt, One Road" strategy.

Investment projects: Various infrastructure projects are underway to modernize the transport network, supported by both Russian and international investments.

Despite these favorable conditions, the Northern Corridor faces several challenges:

- Harsh climatic conditions and remote geography pose challenges to infrastructure development and maintenance.

- Political and economic factors, including sanctions and international relations, can impact trade dynamics.

Azerbaijan's Middle Corridor has emerged as a key transit route

It should be noted that the Middle Corridor was established in February 2014 with the participation of relevant structures from Azerbaijan, Kazakhstan, and Georgia. Later, Ukraine, Romania, and Poland joined the project. Currently, the route begins at the China-Kazakhstan border and extends to Europe through Kazakhstan, the Caspian Sea, Azerbaijan, and Georgia. A single tariff has been implemented along the entire route, and the "single window" principle is applied.

With its unique geographical position, Azerbaijan serves as a bridge connecting Central Asia with the South Caucasus, the Black Sea, Eastern Europe, and the Mediterranean basin. Azerbaijan's strategic role as a transit corridor between Europe and Asia supports the efforts of Asian countries to diversify trade routes and enhance regional connectivity.

Cooperation in transport connections between Azerbaijan and Central Asian countries has gained new significance, with the Middle Corridor emerging as an important and successfully developing transport and logistics route.

In 2023, approximately 2.8 million tons of cargo were transported through the Middle Corridor, marking an 86 percent increase from 2022. In 2024, the volume of cargo transportation is expected to exceed 4 million tons, with plans to send around 250 container block trains through the corridor by the end of the year.

Notably, in the first six months of 2024, the volume of cargo transported on the Trans-Caspian International Transport Route (Middle Corridor) increased by 65 percent, reaching 2.1 million tons.

The Middle Corridor is experiencing active growth as it establishes itself as a vital trade route connecting Asia and Europe. With ongoing investments in infrastructure and strategic partnerships, it offers significant opportunities for economic development, enhancing trade efficiency while addressing sustainability concerns. Its expansion not only supports Azerbaijan's and others economic ambitions but also strengthens regional cooperation and integration.

Overall, international transport corridors are crucial for the development of the global economy in the context of global integration. These corridors facilitate the establishment and operation of stable international transport links. As an integral part of global economic processes, Azerbaijan plays a leading role in developing international transport corridors and implementing various regional projects.