Eurasian Transport Network - The Times Of Central Asia

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Eurasian Transport Network

Cabotage Transportation in Eurasia: Expanding Connectivity, or Creating Unequal Conditions?

Freight transportation by road is the most popular and versatile type of shipping due to its mobility, flexibility, and accessibility. This sector is expected to undergo significant changes in Kazakhstan and other member states of the Eurasian Economic Union (EAEU) starting in 2025. However, industry experts warn that these changes could lead to domestic market losses for Kazakhstani participants. Starting January 1, 2025, transportation companies from EAEU member states will be allowed to carry out cabotage transportation -- shipment of goods between two places in the same country -- within Kazakhstan. This means that foreign carriers will be permitted to perform up to three domestic deliveries in the country following their international shipment. For example, a Russian truck delivering goods to Almaty may complete up to three cabotage shipments within Kazakhstan between cities over seven days on its return route. However, experts suggest this measure could lead to domestic international road carriers losing their market share to foreign operators from Russia and Belarus, who are currently limited by sanctions. According to Ivan Yanson, director of the representative office of the Union of International Road Carriers of the Republic of Kazakhstan in Astana, currently, Belarus has about 40,000 vehicles engaged in international freight transportation, and Russia has a similar number. Meanwhile, Kazakhstan's fleet consists of approximately 15,000 trucks. This discrepancy in fleet size is a key factor influencing competitiveness. Another critical issue is the average age of Kazakhstan’s fleet, which exceeds 20 years. However, high wear and tear and the need for modernization are hindered by the high cost of tractor-trailers, recycling fees, and registration charges, which are often unaffordable for Kazakhstani entrepreneurs. In light of this, local carriers have repeatedly proposed postponing the decision to open Kazakhstan’s market to cabotage. Meanwhile, the development of cabotage in EAEU countries is part of the Union's Transport Policy for 2024–2026. Lawmakers believe these measures aim to expand trade connections and attract new companies. They argue that cabotage liberalization will help reduce empty mileage for EAEU road carriers, thereby lowering freight transportation costs. Kazakhstan's Ministry of Transport also emphasizes that opening the cabotage market will not cause financial or other negative consequences for domestic businesses. According to Deputy Minister Maksat Kaliakparov, carriers will only be allowed to perform up to three consecutive domestic shipments within another EAEU member state using the same vehicle, ensuring equal access for all. Currently, Kazakhstan is conducting internal procedures to amend its road transport legislation to align with the phased liberalization program for cabotage freight transportation, which began on January 1. “These amendments to national legislation are expected to be adopted in the first half of this year,” stated a government representative. The anticipated outcomes include fostering competition in the road transport services market, modernizing the truck fleet, establishing uniform conditions and rules for freight transport services within the EAEU, improving vehicle efficiency for international freight transport, and reducing environmental impact by using modern vehicles. Nevertheless, the effects of these legislative changes cannot be fully assessed until they are...

Eurasian Transport Network

Building Bridges Across Eurasia: Kazakhstan’s Strategic Push for Transport Integration

The development of the economic systems of Europe and Asia is outpacing the level and pace of integration in the transportation systems of the countries located between them. This problem can be solved by creating an overland chain across the entire Eurasian space. As part of the development of its transit potential, Kazakhstan has started to form the backbone of such a terminal network. All work on creating transport networks has been entrusted to the national company, Kazakhstan Temir Zholy (KTZ), which plans to integrate all modes of transport to offer a comprehensive range of client services under a 'one-stop-shop' principle and enhance international operations. Establishing a terminal network outside of the republic will improve freight logistics and help build efficient supply chains. This decision is driven by market demands for cargo delivery, which go beyond mere transportation needs and require the provision of a comprehensive transportation product by a single logistics operator. Where Cargo Flows Begin Developing cooperation with China plays a crucial role in integrating Eurasian transport space. In 2023 alone, transit freight traffic between Kazakhstan and China reached a record 28.3 million tons. This success was partially due to the development of a terminal network in China - the Kazakhstan-China logistics terminal in the Pacific port of Lianyungang has been operating for ten years, and the largest dry port in Central Asia, Khorgos – Eastern Gate, operates on the border. The transport system between these two ports facilitates the delivery of goods from China's eastern coast to Europe via the Caspian Sea, ensuring the shortest delivery times. Adding the new Kazakh terminal in Xi'an to this transport chain has optimized logistics processes and boosted transportation performance. In the first eight months of 2024, container transit from China along the Trans-Caspian International Transport Route (TITR) increased 20-fold thanks to the freight terminal in Xi'an, a project was implemented in partnership with the Chinese company, Xi'an Free Trade Port Construction and Operation. Focusing on EAEU Transport Potential Significant steps have been taken to harness the transport potential of the Eurasian Economic Union (EAEU) countries. In April, construction began on a new terminal at the Selyatino station near Moscow. A trilateral Kazakhstan-Russia-China agreement on creating the CRK Terminal transport and logistics center has been signed by KTZ, SlavtransService, and Xi'an Free Trade Port Construction and Operation. This logistics hub, based in one of the largest dry ports in Selyatino, will develop direct transport links between Xi'an, Russia, and other countries. Its launch is expected this year. Additionally, in the fall of 2024, KTZ signed a Memorandum of Understanding with Chinese and Belarusian partners to build a new logistics terminal in the Belarusian city of Svisloch. Caspian Priority To further integrate Kazakhstan into the key Trans-Caspian International Transport Route (TITR) plans are underway to create an inter-modal freight terminal in Azerbaijan's Alyat port. An agreement for the project's implementation has been signed between SK-AIH Investment Fund Ltd, KTZ, Baku International Sea Trade Port CJSC, and Xi'an Free Trade Port Construction and...

Transport

Pakistan Joins Transport Corridor Between Indian Ocean and Eastern Europe

Uzbekistan’s Ministry of Transport has announced that Pakistan has officially joined the memorandum of understanding on establishing and developing the international transport corridor "Belarus–Russia–Kazakhstan–Uzbekistan–Afghanistan–Pakistan–Indian Ocean." The Pakistani Ministry of Communications signed this memorandum on September 18. The process of creating this multimodal transport corridor began in August 2022, at a meeting between the Uzbek government and the Eurasian Economic Commission – the governing body of the Russian-led Eurasian Economic Union that also includes Armenia, Belarus, Kazakhstan, and Kyrgyzstan. In November 2023, the transport ministries of Russia, Kazakhstan, and Uzbekistan signed a memorandum of understanding, launching the project's active phase of work. The group's first meeting on developing the proposed multimodal transport corridor was held in April 2024 in Termez, Uzbekistan. During that meeting, Belarus joined the memorandum, while Afghanistan and Pakistan announced the beginning of internal procedures for joining the project. At that meeting, a roadmap was signed, including specific plans for the development of cargo transportation, analysis of cargo flows, introduction of electronic digital documents, and optimization of customs procedures. The participating countries expect that the new corridor will become an important link in Eurasia's transport system, providing convenient and efficient routes for the transit of goods and strengthening economic cooperation.

Eurasian Development Bank (EDB) Transport cooperation International trade Eurasian Transport Network

New Report Analyses Eurasian Transport Network

On 27 June, the Eurasian Development Bank (EDB) released a report titled “The Eurasian Transport Network”. The report introduces a new conceptual approach to future developments within the Eurasian Transport Network and outlines key projects and initiatives aimed at improving transport connectivity in Eurasia. The Eurasian Transport Network is a system of interconnected latitudinal and longitudinal international transport corridors and routes, facilitating intra- and trans-continental connectivity for Eurasian countries. It builds upon over 50,000 km of international east-west and north-south transport corridors, linking Asia, Europe, and the Middle East. The Eurasian Transport Network consists of five key international transport corridors: the Northern, Central and Southern Eurasian Corridors, TRACECA, and the International North-South Transport Corridor (INSTC), along with branch lines and regional routes. According to EDB analysts, in 2023, international freight traffic along these five corridors of the Eurasian Transport Network totaled 260 million tons, including 3.6 million 20-foot containers (TEU). Compared to 2013, the volume of international container traffic has more than tripled. The most dynamic growth has been driven by foreign trade and transit container transit with China. Since 2013, the number of container trains to and from China via the Eurasian Economic Union countries and Central Asia has increased by a factor of 200. The EDB introduced the concept of a Eurasian Transport Network in 2021, and this report presents its detailed framework. Three years ago, the EDB released a report titled “The International North–South Transport Corridor: Promoting Eurasia’s Intra- and Transcontinental Connectivity”, which estimated that connecting international transport corridors would yield a 40% increase in freight traffic. In 2024, this projection was fully confirmed by the dynamic development of the INSTC and its linkage to TRACECA. The advancement of the Eurasian Transport Network is paving the way for the establishment of a transport hub in Central Asia. The development of multimodal transport and transit corridors is the only viable solution for Central Asian countries due to the significant distances between trade partners. Establishing a transport hub will facilitate an increase in international traffic, including transit. The EDB projects that freight traffic along the three main corridors running through Central Asia will increase by 1.5 times to 95 million tons by 2030. Container traffic is expected to grow even more rapidly, by almost two-thirds, reaching 1.7 million TEU. Evgeny Vinokurov, EDB Chief Economist, underlines that “at present, transportation costs for landlocked countries are 1.4 times higher than for coastal states. Even during the time of the Silk Road, trade routes in Central Asia were predominantly latitudinal, in the east-west direction. Building new north-south transportation links is a historic opportunity for Central Asia. This is an opportunity to become the continent’s transport hub, unlock new production niches and improve conditions for foreign trade, especially with West and South Asia.” The EDB concludes that given the limited investment opportunities facing most developing countries in Eurasia, a key area of cooperation to develop transport links in Eurasia is boosting the number of projects attractive to international development banks and private investors. This includes projects implemented...

Eurasian Transport Network International transport International trade International Cooperation Eurasian Development Bank (EDB)

EDB Annual Meeting and Business Forum to Focus on Eurasian Transport Network

The Eurasian Development Bank’s (EDB) Annual Meeting and Business Forum, to be held in Almaty, Kazakhstan on 27-28 June, is to focus on cross-border transport corridors in Eurasia. The EDB is a multilateral development bank serving Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan. According to the EDB press service, this year’s forum session, “The Eurasian Transport Network: Potential, Challenges and Solutions” will analyse a report on the development of cross-border transport corridors crucial to the region’s economies. The report highlights the significant constraints in economic development posed by the remoteness of Central Asian countries from global markets and their landlocked status. According to EDB estimates, trade costs in some Central Asian nations are 40% higher than those of coastal states. Overcoming the lack of transport connectivity is key to unlocking the strong economic potential of all Central Asian countries. The concept of the transport network is based on the premise that linking East–West and North–South transport corridors generates synergies, creating new routes, logistics opportunities and better through tariffs. The EDB projects that freight traffic along the three main corridors crossing Central Asia (Central Eurasian Corridor, TRACECA and North–South) could potentially increase by almost two-thirds to 1.7 million containers (TEU) by 2030. Implementing this objective will require concerted efforts from all participating countries.

Finance European Union Russia Transport Eurasian Transport Network

Alternative Transport Routes in Kazakhstan: Potential and Current Opportunities

Kazakhstan's President Kassym-Jomart Tokayev has ordered alternative transportation and shipping routes to be drawn up and supply routes to be diversified. Amid ongoing geopolitical shifts, routes passing through Kazakhstan's territory are already seeing relatively high freight flows. Still, to develop them, further measures are needed to enhance international logistics cooperation and increase efficiency along the entire length of the transport corridors. The country's deputy minister for transport Maksat Kaliakparov kindly agreed to answer some questions from The Times of Central Asia. TCA: Not so long ago, Kazakhstan Temir Zholy (KTZ) announced the launch of a project to create a digital corridor as part of the Trans-Caspian International Transport Route (TITR) with the company Global DTC Pte Ltd. What countries are to be integrated into this project? Can a similar digital trade corridor be considered for the International North-South Transport Corridor (INSTC)? MK: As you know, on August 16, 2022, KZT and the Singaporean company PSA concluded a memorandum according to which one of the identified areas for cooperation is developing a digital trading corridor (DTC). Towards this, a multimodal DTC has been developed. Using this platform, three container trains were sent on the route from Xi'an (China) to Absheron (Azerbaijan) as a test run. Integration with the railway systems of Kazakhstan and Azerbaijan has been carried out. Currently, the process of integration with Georgian systems is underway. Overall, the DTC platform allows for: entering into online contracts with freight forwarding companies; seeing and receiving transportation tariffs from logistics companies; tracking the location of containers along all routes; getting customs status based on transit declarations when crossing borders along the route, etc. This year, it is also planning to launch the commercial operation of a container tracking service in Kazakhstan, Azerbaijan, and Georgia, and it is also planning to be integrated with a Chinese logistics operator. In addition, the Tez Customs platform has been developed. It is part of DTC, created to automate the customs clearance process of railway transit freight on the route China-Kazakhstan-Central Asia/Europe. Tez Customs allows for: automating the process of customs transit clearance at the Kazakhstan-China border; reducing the time of customs procedures (from 4-8 hours to 30 minutes); tracking the status of transit declarations and freight until final departure from the territory of Kazakhstan. Meanwhile, a similar DTC for the INSTC is being considered within the cooperation framework with the UAE company Abu Dhabi Ports. TCA: As part of the development of the INSTC, the railway administrations of Kazakhstan, Russia, and Turkmenistan are planning to create a joint venture (JV). Tell us about the plans for how it is to be formed. How will shares in the JV be allocated between the countries? MK: Yes, indeed, for the further development of the eastern branch of the INSTC, the participating countries are working to create an equal-term JV between KTZ Express, Russian Railways Logistics, and the Transport and Logistics Center of Turkmenistan. Today, the railway administrations of Russia, Kazakhstan, Turkmenistan, and Iran are creating a favorable tariff...