The potential of the Greater Caspian Region
A promising alternative corridor for logistics and trade flows between Asia and Europe.
The Trans-Caspian Trade and Transit Corridor is a key block of European and Asian connectivity. Comprised of Azerbaijan, Armenia, Georgia, and Turkey to the west, and Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, and Afghanistan to the east of the Caspian Sea, the corridor serves as an essential overland route linking the European Union, China, India, and the Middle East.
Countries are looking to expand options for transporting goods from Asia to Europe in creating new supply chain possibilities.
The Caspian Sea – a sea of opportunity
The Trans-Caspian International Transport Route (TTR) runs from Europe to Kazakhstan, the Caspian Sea, Azerbaijan, and Georgia, and from there, via the Black Sea, to Turkey. With the proper development of infrastructure, it can become a connecting hub for traffic flows. The Trans-Caspian East-West Corridor, also known as the Middle Corridor is for many companies a promising alternative to push export and diversify international and land freight transport to these landlocked countries in the region.
The Middle Corridor is more economical and faster compared to the Northern Corridor, serving as a trade route between Europe and Asia. It is approximately 2000 km shorter, has more favorable climate conditions, and offers a shorter lead time of 15 days compared to the sea route.
The Middle Corridor and its challenges
Following the impact of COVID-19 on trade, logistics, and transportation, the current geopolitical situation is further impacting international trade.
Until February 2022, 80 to 90% of all shipments from China went through the Northern Corridor, which is the route from China, via Kazakhstan or Mongolia.
It is clear that the middle corridor is unable to cope with all the current volume and capacity demands. This corridor is less than 5% of the total capacity of the northern route, it simply cannot meet all demand from the northern side, so much is clear.
It is true that more and more companies are looking at this alternative, however, the general consensus is that most of them are facing the same bottlenecks.
The North-South Corridor
The in North-South Transport Corridor (INSTC) is a 7,200-km-long multi-mode network of ship, rail, and road routes for moving freight between India, Iran, Azerbaijan, Russia, Central Asia, and Europe. The route primarily involves moving freight from India, Iran, Azerbaijan, and Russia via ship, rail, and road.
So what is the solution?
The key is to evaluate alternative solutions in which companies might have to keep cargo running such as rail along the Eurasian corridor, or alternatively turning to sea or air transport. Trying to shift volumes, evaluating transit times, multi-modal transport options, and impact on cost can be a daunting challenge today.
To make the best decision, you need a strong logistics partner, which is well-established in the region, to work on the best tailor-made solution for you. At Ahlers, we are working closely with our customers to overcome today’s challenges, and our experts are ready to find the best alternative that works for you.