Exports to take off

Cargo transportation volumes along the North-South international transport corridor (ITC) are soaring continuously. The latest data from Russian Railways suggest that transportation in the five months of 2023 increased by 42% against the same period last year, exceeding 4 million tons. The growth rate is complemented by the transportation of oil, metallurgical and timber cargoes, as well as goods of a wide nomenclature.

You will recall that the corridor includes the three main railway routes: the eastern route running through Russia, Kazakhstan, Turkmenistan and Iran; the central - through the Caspian Sea and the western route crossing Russia, Azerbaijan, Iran and into India. One of the obstacles on the western route is the missing 162-kilometer long section of the rail track between the city of Rasht and the city of Astara in Iran. In view of the growth prospects for freight traffic, on May 17 Russia and Iran signed an agreement whereby the parties undertake to build the missing track section in the next three years.

Current situation

According to a report by Alexei Zamkovoy, deputy director general of the Institute for Economics and Transport Development (IERT), May of this year saw a particularly intensive growth along the eastern route. Due to the start of Russian oil cargoes being shipped through the Serakhs railway checkpoint on the border of Turkmenistan and Iran, the volume of shipments from January to April 2023 demonstrated an absolute rise versus the same period of 2022 reaching as high as 91 thousand tons.

The nomenclature of cargo items exported from Russia is becoming notably wider: agricultural and food products, vegetable oils and fertilizers, paper, cosmetics and pharmaceuticals, various equipment and other consumer goods are all being shipped abroad. Positive dynamics are observed in the transportation of cargoes, including those in containers. Thus, in May RZD Logistics sent the first train carrying 31 cargo containers with non-ferrous metals and food products along the North-South route. The train left from Chelyabinsk-Gruzovoy station.

The railway part of the service runs along the eastern route - Kazakhstan, Turkmenistan and Iran, with the terminal station in Serakhs. Further, from the port of Bandar Abbas, cargoes travel by sea to India.

Container trains operate a special schedule regime which includes expedited cargo delivery as part of the “Carriage on Schedule” service, which is for now available in the Russian segment.

On top of that, shipping companies from Belarus have increasingly shown interest in using the route. “Among the new directions of transportation along the Trans-Caspian route are India, Iraq and Afghanistan,” said Alexei Zamkovoi.

As for the western route of the ITC, May 2023 saw traffic volumes along this route reach 2.9 million tons, which was 50% higher than the 2022 figures. The growth is mainly accounted for by the increased export shipments through Azerbaijan bound for the Georgian ports of Poti and Batumi. The most noticeable dynamics in shipments along the Russian part of the western route are export shipments of Russian oil and grain cargoes traveling to Georgia, Azerbaijan and Iran.

The report underscores the trend that has remained since 2022: the share of oil cargoes transported along the western route of the ITC is rising.

The total volume of traffic on the Trans-Caspian route amounted to 117.7 thousand tons for the five months of 2023, a 80.5% growth over the same period last year.

How to ship more cargoes

The growing volumes of traffic along the corridor testify to there being a need to complete the construction of the Resht-Astara section in the shortest possible time, says General Director of the Institute of Natural Monopoly Problems (IPEM) Yuri Sahakyan.

In addition to the Rasht-Astara line, another 100 infrastructure construction and modernization projects are also pending implementation. “Planning these projects now is an absolute prerequisite for implementing ambitious plans to increase cargo flows along the North-South corridor,” the expert summarizes.

According to the data contained in the ‘Transport Strategy of Russia’ document, by 2035 the total volume of trade between the countries potentially inclined to use the ITC North-South is assumed to increase to 400 thousand TEU, which is the equivalent of 10 million tons.

According to the results of the first five months of this year, the total volume of cargo transportation along the corridor exceeded 4 million tons, having increased by 42% against the previous year. The volume of container transportation for the same period reached almost 20 thousand TEU, i.e. 4 times more than in 2022. The 2023 year-end plans include transportation of 15 million tons of cargo along the western route of the ITC North-South, about 1 million along the eastern route.

As Oleg Belozerov, Russian Railways General Director and Chairman of the Board, noted earlier, the future perspective puts the freight potential of the corridor at more than 100 million tons per year.

“Last year clearly demonstrated the strategic importance of the North-South ITC for the country; we need to be more active in developing it further,” he stressed.

The holding company’s director points to the analogy that exists between the INSTC project development and the East-West corridor. 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.

Viktoria Yeletina