Introduction
The first train carrying petroleum coke from Baku, Azerbaijan to Xian, China was launched on November 24, 2024 and was scheduled to last only 12 days.[1]
It was the most recent example of the increasing importance of the Trans Caspian International Transport Route, also known as the Middle Corridor, which was launched in 2014 to enhance the transportation of goods along the ancient Silk Road.[2]
After Russia invaded Ukraine in 2022, the Middle Corridor started to draw particular interest. Prior to the conflict, the Trans-Siberian, or Northern, Corridor through Russia served as an important route for transporting goods from China to Europe,[3] accounting for 86% of all trade between China and Europe.[4]
After the West levied sanctions against Russia, however, transporting goods through the Norther Corridor became unpredictable, and countries and companies in Asia and Europe searched for alternative trade routes.[5]
The Middle Corridor includes a transportation and supporting logistical capability that mirrors the ancient Silk Road and connects the markets of China to the countries of Central Asia, Azerbaijan, Georgia, Turkey, and Europe.[6]
The route connects the Georgian ports of Batumi and Poti to Baku, Aktau in Kazakhstan, and Turkmenbashi in Turkmenistan with rail and land transportation. The Middle Corridor is thus shorter and more economical than the Northern Corridor, spanning 4,250 km of rail lines and about 500 km of seaway as opposed to 5,400 km of rail transportation through the northern route.[7] Due to its capacity, it has been drawing significant investment from numerous parties to further enhance its effectiveness, including focus from China’s Belt and Road Initiative as well as European Union investments.[8]
The Middle Corridor also helps supply Europe with energy, with oil and gas reserves passing from Central Asia and Azerbaijan to Europe. The volume of cargo transportation through the corridor reached 2.8 million tons in 2023 from 1.5 million tons in 2022. The plans envisage that the demand for transportation through the route will reach 11 million tons annually by 2030.
The much-anticipated peace talks regarding Ukraine, however, could change the geopolitical power balance beyond Ukraine. During the Presidential campaign now President-elect Donald Trump signaled his willingness to end the Ukraine War swiftly. Russia has responded that it is ready to welcome the dialogue with the US participation if it takes into account “the realities of the war on the ground.” [9] Although the details about the possible peace talks are unknown yet, it is highly likely that the new US Administration will attempt to end the Ukraine War.[10] Policy makers and investors will watch these talks closely, as they could affect the future of the Middle Corridor.
Northern and Middle Corridor Schematic Routes
Challenges Facing the Corridor
The Middle Corridor has great potential, but it also faces challenges. The route includes ports, trains and land transportation covered by a variety of laws and regulations from different countries,[11] and requires improvements in cargo and port capacity, security, and transport efficiency.[12]
The difficulties, which have been discussed at international conferences and tackled through transnational agreements,[13]
include a lack of infrastructure that is adapted to the multi-modal nature of the route, made more complicated because of the competition over the control of the infrastructure between the various entities involved.[14]
Investments in the efficiency of transportation process, including digitalization and customs harmonization have to be made as well[15] as the problems are causing difficulties in container processing times and other inefficiencies.
New Developments Along the Corridor
The interest in the Middle Corridor has caused significant efforts to develop cargo and logistical centers to improve port and transportation capacity along the route. In fall 2024, Azerbaijan, Turkey, Uzbekistan, Kyrgyzstan, Tajikistan, China, and Austria agreed to form the Eurasian Transport Route Association to address issues and coordinate policy.[16]
In January 2024, the European Union pledged 10 billion euros through its Global Gateway Initiative to enhance the efficiency of the route.[17]
Kazakhstan has also indicated its willingness to invest in port upgrades in the ports of Aktau and Kuryk to increase their logistical capacity and reduce cargo processing times.[18]
China announced its intention in May 2023 to invest in developing hubs alongside China-Europe Freight Train services at the China-Central Asia Summit in Xian.[19]
China- Europe Freight Train is a key development within the Belt and Road Initiative aimed at transporting goods between China and Europe.[20]
At a side event of the COP29 meeting in Baku, Azerbaijan, China and Kazakhstan signed an agreement to establish an intermodal cargo terminal in the port of Alat in Azerbaijan.[21]
Kazakhstan has established a special terminal in Xian, while international transport and logistics company Gebruder Weiss expanded its logistical center at the Tbilisi International Airport by 13,000 sqm to respond to the growing interest in the transportation through the region.[22]
Signaling the growing interest in the route, Abu Dhabi Ports recently completed the acquisition of the Tbilisi Dry Port, becoming the majority owner of the new intermodal logistical hub scheduled to open in fall 2024.[23]
The CEO of AD Ports specifically noted that the investment is related to the growing potential of the Middle Corridor,[24]
and AD Ports has also invested in the building of new terminals in the port of Kuryk in Kazakhstan.[25]
Other examples of of projects being undertaken in the Corridor include the building of the Anaklya Port in Georgia,[26]
and the expansion and renovation of the Kazakhstani port of Kuryk on the Caspian Sea.[27]
Geopolitics and the Future of the Middle Corridor
As the Corridor gains significance and becomes the main transport route for trade between China, Central Asia, and Europe, the question of geopolitical influence over the Corridor remains pertinent. The Corridor emerged as the most viable and necessary alternative to the Northern Route after the start of the Ukraine War, however, more than two years after the war, there are indications of potential peace talks between the incoming Trump Administration in the United States and President Putin of the Russian Federation.[28]
The influence over the Corridor is likely to be shaped by the outcome of the negotiations.
Russia has long exercised influence over all countries in the Corridor, but Central Asian republics as well as Caucasus countries have gained more agency recently.[29]
For the Russian Federation, the Middle Corridor is a competitor to its Northern Corridor, which allows Moscow to influence the global transportation of goods. If peace talks are successful and sanctions are gradually removed from Russia, Eurasian states along the Silk Road will not need an alternative to the Northern Corridor as much. This would mean, however, a return to Russian dominance and a loss of transportation revenues, leverage, and power for all participating states along the Middle Corridor.
For China and Europe, the Middle Corridor provides the possibility of enhanced trade and growth outside the Russian influence. Therefore, they are unlikely to lose interest in developing the capacity of the Middle Corridor regardless of the outcome of the Ukraine War. As the influence over the Corridor is important for leverage, it is likely that the geopolitical actors in the region, Russia, the U.S., the EU, and China are likely to contest the issue.
Conclusion
Although the concept of the Middle Corridor has existed for a decade, it only recently garnered heightened attention due to challenges faced by earlier routes of transportation between Asia and Europe. The Middle Corridor, a multimodal transport route between China and the Black Sea, is expected to significantly increase in importance in the coming years. The route, although the fastest, still experiences many challenges that must be tackled through transnational coordination, policy work, and public and private investment. The importance of the Corridor and attention to it is likely to continue independent of the much-anticipated peace process in Ukraine.
[1] https://astanatimes.com/2024/11/trans-caspian-international-transport-route-first-container-train-leaves-baku-for-xian-on-return-trip/
[2] https://middlecorridor.com/en/about-the-association/history-en
[3] https://www.caspianpolicy.org/research/energy-and-economy-program-eep/the-middle-corridor-the-beginning-of-the-end-for-russias-northern-corridor
[4] https://ecfr.eu/article/risk-and-reward-why-the-eu-should-develop-the-middle-corridor-trade-route/
[5] https://thediplomat.com/2024/03/the-middle-corridor-a-renaissance-in-global-commerce/
[6] https://www.mfa.gov.tr/turkiye_s-multilateral-transportation-policy.en.mfa
[7] https://www.german-economic-team.com/en/newsletter/challenges-and-opportunities-of-the-middle-corridor/
[8] https://www.caspianpolicy.org/research/economy/european-and-international-financial-institutions-to-invest-10-billion-in-the-middle-corridor
[9] https://www.reuters.com/world/trump-election-offers-new-possibility-us-russian-dialogue-russian-envoy-says-2024-11-14/
[10] https://www.reuters.com/world/trump-election-offers-new-possibility-us-russian-dialogue-russian-envoy-says-2024-11-14/
[11] https://www.oecd.org/content/dam/oecd/en/publications/reports/2023/12/realising-the-potential-of-the-middle-corridor_c458041c/635ad854-en.pdf
[12] https://www.caspianpolicy.org/research/economy/european-and-international-financial-institutions-to-invest-10-billion-in-the-middle-corridor
[13] https://www.caspianpolicy.org/research/energy-and-economy-program-eep/the-middle-corridor-the-beginning-of-the-end-for-russias-northern-corridor
[14] https://www.iiss.org/publications/strategic-comments/2023/greater-consensus-on-improving-the-middle-corridor/
[15] https://www.caspianpolicy.org/research/security-and-politics-program-spp/caspian-corridor-supported-broadly-in-london
[16] https://interfax.com/newsroom/top-stories/105981/
[17] https://international-partnerships.ec.europa.eu/news-and-events/news/global-gateway-eu-and-central-asian-countries-agree-building-blocks-develop-trans-caspian-transport-2024-01-30_en
[18] https://www.railfreight.com/beltandroad/2024/08/01/kazakhstan-greenlights-infrastructure-upgrades-with-middle-corridor-logistics-cluster-in-mind/
[19] REALISING THE POTENTIAL OF THE MIDDLE CORRIDOR, OECD 2023, p. 19.
[20] https://english.www.gov.cn/news/202412/02/content_WS674d1c04c6d0868f4e8ed960.html
[21] https://www.caspianpolicy.org/research/category/azerbaijan-kazakhstan-and-china-announce-new-cargo-terminal-in-baku
[22] https://www.gw-world.com/newsroom/en-us/gebrueder-weiss-expands-its-logistics-center-in-tbilisi/
[23] https://www.adportsgroup.com/en/news-and-media/2024/08/15/ad-ports-group-completes-tbilisi-dry-port-acquisition-to-become-majority-owner
[24] https://www.adportsgroup.com/en/news-and-media/2024/08/15/ad-ports-group-completes-tbilisi-dry-port-acquisition-to-become-majority-owner
[25] https://www.railfreight.com/beltandroad/2024/10/30/kazakh-kuryk-port-to-get-various-new-terminals/
[26] https://www.rferl.org/a/anaklia-georgia-china-port-winner/32970697.html
[27] https://breakbulk.com/articles/middle-corridor
[28] https://www.theguardian.com/world/2024/dec/06/russia-and-ukraine-warily-wait-for-trump-transition-and-subsequent-peace-talks
[29] https://vc.bridgew.edu/jiws/vol25/iss6/5/
