Azerbaijan on crossroads of comfort, economic prosperity

/By AzerNews/

By Gulgiz Dadashova

“Azerbaijan can be described as the vitally important “cork” controlling access to the ‘bottle’ that contains the riches of the Caspian Sea basin and Central Asia.”

Former US National Security Advisor, Zbigniew Brzezinski.

Enjoying enormous recourses and high economic growth rates, Azerbaijan has the opportunity to realize its initiative to turn into a regional hub between Europe and Asia.

The country, located at the crossroads of the major Eurasian transport corridors, is involved in major energy projects of European interest. The East-West Black Sea Caspian Sea Corridor could not be left out Baku’s ambitious plans to bear fruits of its economic and strategic advantages.

Positioning itself as main link on the East-West Strategic Corridor linking Central Asia to the Euro-Atlantic Area, Azerbaijan is a natural bridge between Europe and Asia and a gateway to energy and transportation corridors for the entire region.

The development of Azerbaijan’s transportation projects could bring benefits to all countries with which it is directly cooperating, to their neighbor countries and the West, which is interested in rich economic potential of the East.

Maintaining the secularity of a state with a Muslim heritage, Azerbaijan has followed independent foreign and economic policy since the country regained its independence after the breakup of the Soviet Union. Funds earned from the natural energy, particularly oil, became a central point to the development of Azerbaijan’s energy resources and projects. Thus, the development of the energy resources has become the key element of the long-term commitment to gaining economic and political independence for the Azerbaijani government.

Azerbaijan's growing economy backed by energy wealth, internal stability and the Western policy has given it a chance to realize large –scale projects in the geopolitically complex location. Now, it’s time for Azerbaijan, the only Caucasus country with a real potential of implementing major regional projects, to value its position and gain assets from the transportation.

Azerbaijan, as an irreplaceable player without which it is not possible to realize the new transport corridors from East to West, is going beyond what it has already earned with oil.

FROM PAST TO THE FUTURE

Throughout history, many major caravansaries and regional trading centers passed through the present territory of Azerbaijan. The Azerbaijani cities, including Gabala, Shaki, Barda, Ganja and Shamakhi and caravansaries acted as the commercial nodes along the East-West and North-South axes. All these turned the Azerbaijani cities into “the logistics centers” of these times.

The country enjoys the potential to be a true gateway to the Central Asia for Europe and a door to Europe for the Central Asia and China. It has the potential to become a “hub of hubs” in Central Eurasia—as greater cooperation between regional states along the ancient Silk Road would benefit all.

The successful logistics hubs require certain geographical features, such as a central location and significant government investments in the infrastructure.

Increasing investment in transport infrastructure has already yielded record passenger and cargo conveyance year-on-year, with significant port, airport, highway, and railway projects expected to boost domestic and international trade volumes of Azerbaijan in the coming years.

With several large-scale projects drawing to a close, regional and domestic connectivity has never been so simple.

AIR TRANSPORTATION

Air transportation can be named as a major and highly efficient component of today’s optimized supply chain. For many products, markets, and industries, air cargo is the critical link that allows organizations to respond to customer demands in a timely manner.

Whether you are air shipping to Azerbaijan or looking for air freight services to anywhere else in the region, Baku will be the right option.

Baku is a good choice for a number of reasons, the core of which is its geographical position. Baku’s east-central location optimizes the distances and flight schedules from and to the Eastern and Western countries.

The time between the last inbound arrival from the West for example and the first outbound departures provides SilkWay, Azerbaijan’s freight specialist with enough time to sort all the packages without clogging the sorting hub.

Weather advantages

Delays aren’t acceptable in a world that depends on just-in-time deliveries for manufacturers, retailers, and distributors. Thus, logistics hubs located in good weather locations offer one of the performance elements shippers need most— reliability.

Modern-day logistics depends on the absence of adverse weather conditions, especially extreme weather. Baku derives some advantage by being out of reach of most major types of dangerous weather like hurricanes, tornados, and snowstorms.

Baku is far enough south to avoid severe winter weather and far enough north from the Black Sea to avoid the brunt of hurricanes. Baku is one of the most weatherproof areas in the region, untroubled by hurricanes, blizzards, or prolonged periods of icy weather, at a time when Istanbul and Moscow airports are forced to cancel most flights in winter.

Baku enjoys geographic advantages that apply to a broad region, rather than to a specific town or unique point on the map. Huge investments in ports, terminals, roads, and new businesses turn Baku, a logistically favorable region, into a thriving hub.

Capacity

Working to turn Baku into a transport and logistical center, Azerbaijan is successfully developing its cargo aviation. New aircrafts are purchased, a cargo terminal has been in operation for many years and other works in this direction are progressing well.

Silk Way Airlines of Azerbaijan is considered as one of the leading cargo airlines in Central Asia providing full-fledged services to Europe and the United Kingdom and the Middle East, as well as the Far East including Korea, China and Hong Kong.

Silk Way currently operates Ilyushin IL-76 aircraft, IL-76TD-90SW stage 4 noise-compliant aircraft equipped with PS-90A-76 engines, and Antonov AN-12 aircraft.

Silk Way Airlines is a leader in scheduled and charter cargo flights, with a route network of more than 50 destinations worldwide. It also serves international destinations through a network of alliances.

Silk Way West is a unit of Baku-based Silk Way Holding, which includes 23 companies working in the aviation industry and related services.

Silk Way West is using Boeing 747-400 Freighters, Boeing 747-8 Freighters and 767-300 Freighters. The airline took delivery of two 747-8 freighters in 2014 and operates five other Boeing models.

MARITIME TRANSPORTATION

Maritime transportation did not come to dominate the Euro-Asian trade due to the fact that it took a long time before the industry came up with new solutions such as containers and large ships for affordably transporting big volumes of goods across continents.

Sea transport also remains a high priority for the Azerbaijani government and the Caspian Shipping Company is considered a major company on a global scale. Today, the merchant fleet of the company consists of 97 vessels, including 34 tankers, 13 ferries, 14 universal dry-cargo, 2 Ro-Ro ships as well as different auxuliary ships. And the offshore support fleet is comprised of 188 vessels, including 15 crane, 23 supply and tug, 2 diving support, 2 pipelay, 5 geological, 2 passenger and other type of vessels.

The Caspian Shipping Company plays a connecting role in the Transport Corridor Europe-Caucasus-Asia (TRACECA), provides marine transportation of goods and passengers along with Trans-Caspian Sea and offers offshore support services to oil and gas operations.

Today, the largest international trade seaport in the Caspian Sea basin is also under construction in Azerbaijan, in Alat. Alat port will play a pivotal role in international multimodal transportation and the Euro-Asia supply chain with Azerbaijan. The port will be the main logistic hub in the Caspian region, serving simultaneously Asian and European markets

Alat would not serve only as a multimodal transit logistic hub. It will become a major consolidation and distribution center in central Europe serving the markets of Central Europe, South Caucasus, turkey Iran , Russia

The first stage of this port was completed in 2014. This port will be capable of processing 10 million tons of cargo at the first stage and a further 20 million tons of cargo afterwards, including 1 million containers, which will further expand the transit opportunities of Azerbaijan.

RAILWAY TRANSPORTATION

Although the maritime transportation is the cheapest, but it is the slowest one as well. Air transportation, on the other hand, is the most expensive but the fastest option. Transportation by train is somewhere in between.

Reviving the trade along the North-South and East-West corridors required harmonizing all regional transportation projects in the Caucasus and Central Asia and Azerbaijan, backed by huge energy funds, started implementing strategic infrastructure projects both in energy and non-energy sectors that will be building blocks of the country’s future economic performance.

Such a project is the opening of the Baku-Tbilisi-Kars railway initiated by Azerbaijan scheduled for late 2015. Azerbaijan is implementing this project together with its partners in Turkey and Georgia. As a result of the construction of this railway, Azerbaijan will link the two continents together.

Azerbaijan, Georgia and Turkey are closely connected with such largest pipeline projects as the Baku-Tbilisi-Ceyhan and the South Caucasus gas pipeline. Opening a new railway will bring these links to a new level.

The Baku-Tbilisi-Kars railway will be the final link in the transportation of goods between Europe and Asia. Today, the main point of moving goods in Asia is China, which has already expressed interest in the new cargo transportation route. The goods for Central Asian countries and primarily Afghanistan, can take a significant transportation volume in the opposite direction.

The closer the time for completing the Baku-Tbilisi-Kars railway project, the more attention is paid by potential shippers. The available infrastructure for container multimodal transportation using the Baku-Tbilisi-Kars railway will be the key to success. This type of cargo transportation has recently become important. This is confirmed by the fact that one should not expect large volumes of liquid cargo transportation.

The line is expected to have an annual volume of 6.5 million at the beginning. The target is 17 million to/year in long term. There are a few railway projects under construction or under discussion which will extend the coverage of Baku-Tbilisi-Kars line. Kazakhstan has just completed a west-east rail connection which may be a strong alternative for connection Turkey to China via Caspian Sea. Iran’s willing to open a railway connection to Azerbaijan, and Georgian government’s statement about reopening of Sukhumi-Tbilisi railway are some other projects that may extend the coverage of Baku-Tbilisi-Kars line in the future.