Stage-by-stage development of the route

One of the key topics discussed at the St. Petersburg International Economic Forum that ended last week was the development of trade and transport-logistics cooperation between Russia and its partners from the Middle East and South Asia.

Last year brought about a good deal of changes for Russian operators and shippers in organizing their transport and logistics operations. The signing of new contracts required the building of routes, simultaneous modernization and construction of related infrastructure. Also, shipment of cargoes along the International North-South Transport Corridor (INSTC) began to pick up steam.

The route’s perspectives

Sergey Ivanov, Special Representative of the President of the Russian Federation for Environmental Protection, Ecology and Transport, while speaking at the forum said that if the INSTC development project was implemented, the corridor would become a core multi-modal transport route for the whole of Eurasia.

“While 2022 saw 14.5 million tons being delivered via the INSTC, this year, according to forecasts, will see shipment of 17.6 million tons with a prospect of rising up to 40 million tons by 2030,” said Russian Transport Minister Vitaly Savelyev.

The corridor’s humanitarian and economic nature determines the choice of nomenclature for the goods shipped, said president of the Russian Academy of Transport Alexander Misharin. Thus, the cargo flow will be mostly accounted for by foodstuffs, consumer goods, industrial goods, grain, mineral fertilizers and coal.

“The corridor has a huge potential. Last year clearly demonstrated the strategic importance of the INSTC for the country. We need to be more active in developing it further”, said Oleg Belozerov, the General Director and Chairman of the Board of Russian Railways.

This year, 15 million tons of cargoes is scheduled for shipment along INSTC’s Western route, and about 1 million - along the Eastern route. According to Oleg Belozyorov, the head of Russian Railways, the strategic perspective puts the route’s freight potential at more than 100 million tons of cargo per year. He draws an analogy between the INSTC project development and the East-West corridor. For example, in 2013, the China-Europe corridor took off with only 5-6 thousand containers being shipped and, in a few years, the number of transit containers exceeded 700 thousand per year.

Increasing the cargo base

First Deputy General Director of Russian Railways Sergey Pavlov said in his speech at the forum that the holding company continues its work to develop the INSTC, as well as interacts with its Indian partners regarding a telecommunications project to create a cross-border data exchange channel between Russia and India.

As Alexander Misharin explains, the corridor’s intended throughput is 100-200 million tons, by analogy with the other railway directions in Russia, for example, the Eastern direction. Alongside the construction of the infrastructure, it is necessary to conduct work on the harmonization of legislation and regulations, customs and phytosanitary inspection protocols and the construction of transport and logistics centers.

“The conditions for the development of the corridor are currently being put in place. The business community should trust the project and feel the need to use the corridor,” the expert says.

Oleg Belozerov believes that this requires the creation of new services and tools - the possibility of quick transshipment and clearance of goods, the use of navigation seals, the introduction of control systems and communication of information to shippers. According to him, a lot also depends on the formation of end-to-end tariffs.

“The key aspect is the need for symbiosis and interaction between different modes of transport. For example, the Russian Federation has developed a regulatory framework for piggyback transportation: a possibility to deliver semi-trailers by rail on special rolling stock”, - says Oleg Belozerov.

This mechanism can be tested in Astara, where there is no railway section.

“The announced figure of 15 million tons is already in the process of implementation as we speak, since the agreement has been signed with the Iranian side (construction of the Resht-Astara railroad stretch - Editor's note); the project is being implemented. As soon as the end-to-end railway transit kicks off, new questions will arise”, explains Anatoly Meshcheryakov, Director of the Transport Department of the R.F. Government Administration.

He believes that in order to ship 30-60 million tons of cargo through Iran, it is necessary not only to build the Resht-Astara section, but also thousands of kilometers of railroads, where the project design and approval stages alone will take 7-8 years.

Sergey Volkov