The North—South corridor. Russia and BRICS: shaping the logistics of the future

The Roscongress Foundation commissioned a study from the International Trade and Integration Research Center, exploring the significance and potential of the North-South International Transport Corridor for Russia's foreign trade. The 1520International portal publishes these materials. This study begins by exploring the corridor's origins and initial operational outcomes.  

The North-South corridor offers an alternative transport route that bypasses the Suez Canal. Despite current bottlenecks, the North-South route offers several clear advantages.

In 2023, Russia's Federal Customs Service reported increased trade with Asian and African countries, valued at $16.2 billion and $6.4 billion respectively. This growth partially offset the decline in European trade. The need for new export and import routes is driving the restructuring of transport and logistics in Eurasia and the development of the North-South International Transport Corridor (ITC).

The North-South International Transport Corridor is a vast multimodal project spanning 7,200 km, connecting St. Petersburg, Russia's largest northern port, to Mumbai, India's largest port, via rail, road, sea, and river routes. The ITC currently links Northern Europe to the Persian Gulf and Indian Ocean regions via Russia, the Caucasus, and Central Asia, following various historical trade routes that interconnect these areas.

Southern Iranian ports Bandar Abbas and Chabahar serve as convergence points for routes, facilitating onward shipments to India, the Persian Gulf, and East Africa.

All three North-South ITC branches currently operate with varying regularity. Container delivery from Moscow to Bandar Abbas port takes at least 14 days.

Cargo transportation trends demonstrate the growing importance of the ITC. Estimates indicate that total traffic volume on the North-South ITC grew by 18%, from 19 to 22.6 million tons, between 2022 and 2023. Rail constitutes the majority of transportation. Cargo transport grew by 14% in 2023, reaching 11.6 million tons, up from 10.2 million tons in 2022. Sea transportation surged in 2023, with volume rising 55% to 5.5 million tons, matching that of motor transport.

Russian cargo transportation through the North-South International Transport Corridor reached 14.6 million tons in 2022 and 17.6 million tons in 2023. Transit traffic through Russia on the North-South ITC totaled 3.1 million tons.

The North-South ITC currently attracts significant interest from shippers in Russia, India, Iran, and other nations.

Eurasia's reshaping trade landscape highlights the surging cargo traffic between Russia and India. In 2023, Russia-India trade surged to $65 billion from $37 billion the previous year, propelling Russia to fourth place among India's top trading partners, surpassing Saudi Arabia.

The challenge of balancing bidirectional North-South cargo flows demands growing consideration.

Russian export-import transportation primarily consists of food products (7.8 million tons), followed by wood and cellulose (1.2 million tons), ferrous metals (939,000 tons), and oil and petroleum products (938,000 tons).

By 2040, the transportation potential is projected to reach 60 million tons under the baseline scenario and 75 million tons – under the optimistic scenario. Primarily consisting of grain, fertilizers, ferrous metals, and foods, this could also include coal, oil, and petroleum products under the optimistic scenario. Ongoing investment projects worth $17.1 billion target a 43-million-ton carrying capacity, but suffer from fragmented and uncoordinated implementation.