Middle Corridor - The Times Of Central Asia

Viewing results 1 - 6 of 205

OTS summit

OTS Summit in Ankara: Turkey Looks to Strengthen Its Position as Central Asia Competes for Transit Routes

Kazakh President Kassym-Jomart Tokayev arrived in Ankara on October 28, the day he delivered his annual State of the Nation Address, in which he announced plans to expand transport routes between China and Europe. On October 30, he will attend the 13th summit of the Organization of Turkic States (OTS). Turkey is preparing to take over the organization's chairmanship from Azerbaijan, and Central Asian countries are seeking to accelerate freight transportation across the Caspian Sea. Behind the shared rhetoric of Turkic unity lie specific economic interests. Kazakhstan is building railways and expanding its capacity to handle transit cargo from China. Azerbaijan is developing Caspian ports and transport infrastructure in the South Caucasus. Turkey wants to attract more freight moving between China and Europe through Central Asia, increasing its role as a transit hub. A unified route looks much simpler on a political map than it does in the daily operations of transport companies. Between China and Europe, cargo crosses several borders, is transferred from trains to ships and back, undergoes customs clearance, and is subject to tariffs set by different operators. Interest in alternative Eurasian transport routes has grown since Russia launched its full-scale invasion of Ukraine, but the competition extends beyond freight. Ankara is looking to strengthen its political presence in Central Asia, where Russia and China retain considerable influence. Summit events begin on October 29 with a meeting of the Council of Foreign Ministers, chaired by Turkish Foreign Minister Hakan Fidan. The nation’s presidents will meet on the following day. Participants are expected to adopt the Ankara Declaration, discuss investment, energy, digitalization, security, and appoint a new OTS secretary-general. Tokayev and Kazakhstan's Route to Europe Tokayev's visit to Turkey follows directly after his State of the Nation Address, much of which focused on infrastructure, including plans to open the 272-kilometer Bakhty–Ayagoz railway in 2027. The line is expected to add 20 million metric tons of annual freight capacity between Kazakhstan and China. Tokayev also discussed construction of the Aral–Caspian highway. The project would establish a new transport connection between western and central Kazakhstan. According to government estimates, it could shorten certain freight routes between China and Europe by approximately 1,000 kilometers and reduce delivery times by up to three days. Both projects are part of a broader effort to increase Kazakhstan's revenue from international logistics. The country currently earns a substantial share of its transit revenue directly from freight transportation. Developing warehouses, terminals, processing facilities, and distribution centers could generate additional income. Turkey occupies an important position in this network. An overland branch of the Middle Corridor passes through its territory en route to European markets; the Baku–Tbilisi–Kars railway connects Azerbaijan to Turkey's rail network through Georgia. On the sidelines of the Ankara summit, Turkish business associations plan to discuss border crossing operations, transportation costs, and the development of the Middle Corridor. Transport geography, however, does not fit neatly within the OTS's political boundaries. Georgia, through which the railway connecting Azerbaijan and Turkey passes, is not a member...

Middle Corridor

Kazakhstan Expands Middle Corridor Fleet as Caspian Sea Levels Fall

Containers are piling up on Kazakhstan's Caspian coast as they await shipment to Azerbaijan. A shortage of vessels and weather-related restrictions are delaying cargo along the Middle Corridor, a trade route connecting China and Europe while bypassing Russia. Kazakhstan plans to acquire five vessels and has ordered another six to expand maritime freight capacity. At the same time, falling Caspian Sea levels are limiting how much cargo existing ships can carry and complicating port operations. Yerkin Nygmetov, CEO of KTZ Express Shipping, described the container backlog at the New Silk Way international transport forum, held in Astana on October 15–16. According to Nygmetov, adverse weather conditions can restrict operations at Kazakhstan's ports for a total of up to 75 days a year. Freight Volumes Rise as Vessels Face Delays The Middle Corridor, officially known as the Trans-Caspian International Transport Route, runs through Kazakhstan, the Caspian Sea, Azerbaijan, and Georgia. From there, cargo continues to Turkey and Europe, including via the Black Sea. Following Russia's invasion of Ukraine in 2022, the route attracted increased interest from companies seeking to reduce their dependence on transit through Russia. According to Kazakhstan's national railway company, Kazakhstan Temir Zholy (KTZ), container traffic along the Middle Corridor reached 44,200 twenty-foot equivalent units (TEUs) in January–August 2026, an increase of 58% from a year earlier. A TEU is a standard measure of container capacity equivalent to one 20-foot container, approximately six meters long. During the same period, 419 container trains departed China along the route, compared with 228 a year earlier. The maritime section requires containers to be transferred from trains onto vessels in Kazakhstan and then back onto railcars in Azerbaijan. Waiting for an available ship increases delivery times, particularly during periods of heavy cargo arrivals. The World Bank has assessed the corridor's potential for growth. According to a study published in September, investments in transport infrastructure and better coordination of logistics procedures could more than triple trade volumes along the Trans-Caspian Corridor by 2040 and cut delivery times in half. The bank also projects that implementing the proposed measures could increase the combined GDP of nine countries connected to the route by 3.3% and create two million jobs. Kazakhstan Orders Vessels from China and Azerbaijan KTZ Express Shipping, a subsidiary of KTZ, plans to acquire five container vessels in 2026. Another six multipurpose dry cargo and container ships have been ordered from shipyards in China and Azerbaijan. By 2028, the company aims to expand its own fleet to 13 vessels with a combined deadweight tonnage of 96,000 metric tons. Deadweight tonnage refers to the maximum weight a vessel can carry, including cargo, fuel, supplies, and other variable loads. On October 15, Kazakhstan's Samruk-Kazyna sovereign wealth fund confirmed that two dry cargo vessels would be built at the Baku Shipyard under contracts signed in April 2026. Another four vessels have been ordered from China's Jiangsu Haizhongzhou Shipping Industry. Each is designed to carry up to 537 TEUs, with a deadweight tonnage of 9,900 metric tons. The...

Logistics

Kazakhstan’s Warehouse Market Faces Mismatch Between Supply and Demand

Central Asia is seeking a larger role in trade between China and Europe by offering alternative shipping routes that bypass Russia. However, growing interest in transit has not been matched by balanced development of warehouse infrastructure. Some transport hubs face shortages of modern facilities, while others have vacant space. For international freight operators and retailers, this means additional costs. For investors, it raises the risk of financing warehouses that may struggle to attract tenants. These contradictions were discussed on October 15 in Almaty at the Central Asia Warehouse Summit 2026, organized by consulting firm IBC Global. The summit brought together industry representatives and investors. Research presented at the event showed a growing disconnect between warehouse construction and actual demand. Vacant Warehouses Exist, but Not Where They Are Needed According to IBC Global, the vacancy rate for modern warehouse space in Kazakhstan is about 5%. This gives tenants more options when choosing facilities and negotiating rents. However, the national figure masks significant differences between cities and types of warehouse space. Industry estimates put Astana's shortage of modern warehouse space at approximately 350,000–400,000 square meters. Separately, property consultancy Bright Rich reported that Almaty's warehouse vacancy rate had reached 13.3% in May 2026. These estimates come from different periods and surveys, and should not be treated as directly comparable. Class A warehouses are modern facilities with high ceilings, loading docks, security systems, and infrastructure designed to handle large volumes of goods. Kazakhstan's warehouse market is nevertheless expanding rapidly. According to an IBC Global ranking presented at the summit, the total area of Class A warehouses covered by its research increased by 39% over the past year to 730,000 square meters. More than half of that space, approximately 400,000 square meters, is controlled by the five largest property owners. Their facilities are concentrated mainly in Almaty and Almaty Region, Astana, and Shymkent. Developers Continue Building Despite Weaker Demand A survey of more than 100 warehouse market participants across four Central Asian countries revealed a gap between developers' plans and tenants' expectations. According to IBC Global, 81% of developers intend to launch new projects or complete facilities already under construction within the next twelve months. Yet 62% of developers surveyed identified weak tenant demand as the main obstacle to market development, while 52% cited the high cost and limited availability of financing. IBC Global's market sentiment index for Kazakhstan stood at 48.1 points in the third quarter of 2026, below the neutral threshold of 50. However, 52% of respondents expect supply and demand to move closer to equilibrium over the next year. The risks are particularly high for speculative developments launched without a tenant already under contract. Developers expect to secure customers after construction is completed, but by then business requirements and market rental rates may have changed. One alternative is the build-to-suit model, in which a facility is constructed to meet the requirements of a specific tenant. Its location, size, equipment, and operating conditions are agreed upon in advance. This reduces vacancy risk for...

Middle Corridor

Japanese Firms Test Middle Corridor Freight Route as Tokyo Funds Aktau Port Upgrade

Japan is assessing greater use of the Middle Corridor following trial shipments by Japanese companies, as Tokyo funds customs upgrades at Kazakhstan’s port of Aktau worth up to $4.5 million. The results of the trials were presented at an October 19 conference in Tokyo, which focused on Japan’s transport links with Central Asia and the Caucasus. The trials assessed delivery times and costs, alongside customs procedures and logistics services. Japan’s funding provides for the installation of a stationary X-ray inspection system for large cargo at Aktau, where containers are shipped across the Caspian Sea to Azerbaijan. The grant, agreed in January, is valued at up to 719 million yen (approximately $4.5 million). The equipment is expected to reduce inspection times by two-thirds. Kei Takagi, Japan’s State Minister of Economy, Trade and Industry, linked Tokyo’s interest in the Middle Corridor to efforts to diversify international transport routes and strengthen trade with Central Asia and the Caucasus. For Japanese exporters, the Middle Corridor could provide an alternative way to reach markets across Central Asia and onward to Europe. Japanese cargo must first reach the corridor by sea, through China or another point connecting to the overland transport network. The route’s attractiveness therefore depends on transshipment costs and reliable connections, including efficient customs clearance. In 2025, the Middle Corridor handled 4.12 million metric tons of freight, down from 4.48 million tons in 2024 but approximately five times the volume recorded seven years earlier. According to Kazakhstan’s Ministry of Transport, transit times along the corridor have fallen from 28–32 days to 13–17 days. The ministry’s estimate is for the corridor, rather than a quoted delivery time from Japan. Beyond freight transport, conference participants discussed digital infrastructure across the Caspian Sea. The Kazakh side highlighted the October 15 inauguration of a 380-kilometer fiber-optic cable linking Kazakhstan and Azerbaijan. The cable across the Caspian seabed is intended to carry international internet traffic between Central Asia and the South Caucasus, with adjustments to the line continuing through the end of 2026. Direct air connections were also discussed. Air Astana plans to launch scheduled flights between Almaty and Tokyo’s Narita Airport in December 2026.

Middle Corridor

How the Shrinking Caspian Sea Affects the Middle Corridor’s Potential

Paradoxically, the Caspian Sea is becoming one of Eurasia’s most important transport hubs at a time when its falling water level is creating growing constraints on navigation. As sanctions disrupt traditional trade routes through Russia, countries are investing in the Middle Corridor as an alternative link between Asia and Europe. Yet the continuing decline in sea level is limiting shipping capacity and increasing the risks and costs associated with long-term infrastructure projects. The first Caspian Environmental Summit, held in Turkmenistan on October 9, 2026, drew attention to the scale of these changes. Between 2000 and 2025, the Caspian Sea shrank by more than 16,000 square kilometers, while in some areas the shoreline receded by tens of kilometers. How the Caspian’s Falling Water Level Affects Freight The Middle Corridor, linking China, Central Asia, the Caspian Sea, the South Caucasus, Turkey, and Europe, is seen as a promising route for diversifying international trade. Its development can reduce shippers’ dependence on individual transport routes and improve economic ties among countries in the region. According to the World Bank’s latest study, more than $25 billion in investment in the corridor’s core physical infrastructure will be needed through 2040. An additional $30 billion could be required for enabling infrastructure and services. The bank estimates that if infrastructure investment is combined with institutional reforms, freight volumes along the corridor could quadruple and travel times could fall by about two-thirds by 2040. A study by the Organisation for Economic Co-operation and Development (OECD) notes that insufficient depths are already preventing vessels from being fully loaded, reducing transport efficiency and increasing costs. Large-scale dredging was carried out at the Port of Kuryk in 2024. Over four months, around one million cubic meters of material were removed, and the depth of the operational port area was increased to 7–8 meters, according to the port operator. This made it possible to load vessels to full capacity. Meanwhile, major dredging work is underway at Aktau, where 1.3 million cubic meters of material are to be removed to increase water depths to 6–7 meters. The work is expected to be completed by the end of 2026. Dredging, however, can only maintain the operation of individual port facilities, while further declines in the sea level may require repeated work or the reconstruction of berths. Where draft restrictions prevent full loading, transport companies may need to make more voyages to carry the same volume of cargo, increasing spending on fuel, crews, maintenance, and port operations. Constraints on the maritime section can also lead to delays for railcars and containers and disrupt transshipment schedules. These disruptions reduce the predictability of deliveries along the entire route. Similar problems are emerging on the western coast of the Caspian. Falling water levels are reducing vessel cargo capacity at Azerbaijani ports and oil terminals and requiring additional dredging. Infrastructure for Decades Ahead According to the OECD study, which cites World Bank climate projections, under a high-emissions scenario in which the Caspian water level falls by about five meters between...

CICA Summit

Central Asian Leaders Link Trade and Security at Baku Summit

Central Asian leaders called for better transport links and joint action on water shortages at the Baku summit in Azerbaijan on October 15, arguing that practical cooperation could prevent political disputes from turning into conflict. The seventh summit of the Conference on Interaction and Confidence Building Measures in Asia (CICA) adopted the Baku Declaration, admitted Laos as a new member, and approved Azerbaijan’s continued chairmanship through 2028. Uzbekistan’s President Shavkat Mirziyoyev called for an “infrastructure of trust” based on transparent government actions and the fulfillment of commitments. His proposed concept would connect conflict prevention with joint transport and energy projects, trade, and digital links. He pointed to the damage that conflicts in Asia were causing to economies and security far from the fighting. Mirziyoyev warned, “When dialogue weakens, the risk of misguided decisions increases.” He urged governments to prevent political disagreements from becoming armed confrontations. Kazakhstan’s President Kassym-Jomart Tokayev proposed a preventive diplomacy mechanism within CICA, enabling members to contribute before a crisis develops. He told the summit, “Peace is best built before crises emerge.” According to the Azerbaijani state news agency AZERTAC’s account, the Baku Declaration includes provisions on economic ties, transport and digital connections, and energy security. It addresses the opportunities and risks of artificial intelligence. Trade Routes Across the Caspian Sea The meeting came one week after the Avaza summit, where Central Asian presidents and Azerbaijan’s Ilham Aliyev discussed east-west and north-south trade routes. In Baku, those regional priorities entered a wider Asian forum, alongside calls to make commercial relationships more dependable. Tokayev proposed a CICA Transport Connectivity Strategy covering major routes, including the Middle Corridor across the Caspian Sea. He linked Azerbaijan’s rapprochement with Armenia to new opportunities for east-west transport. Tajikistan’s President Emomali Rahmon called in his summit address for simpler customs and logistics procedures and better connections between different forms of transport. He presented economic cooperation as a foundation for lasting peace, alongside continued action against terrorism and its financing. On the summit’s sidelines, the foreign ministers of Azerbaijan, Turkmenistan, and Uzbekistan discussed transport and transit cooperation. Their talks covered improvements to logistics infrastructure and international routes connecting Central Asia with the Caucasus, according to Turkmenistan’s government account. During a separate bilateral meeting, Tokayev and Aliyev inaugurated the Trans-Caspian Fiber-Optic Cable Line remotely, opening an approximately 380-kilometer connection between Aktau in Kazakhstan and Sumgayit in Azerbaijan. The project forms part of the Digital Silk Way initiative, with onward connections intended to carry data between China, Central Asia, and Europe. Kazakhstan’s Ministry of Artificial Intelligence and Digital Development gives the cable a design capacity exceeding 400 terabits per second. The ministry says the additional route will provide backup for existing international connections and allow operators to distribute traffic across more channels. It expects the connection to attract investment in data centers and cloud services as Kazakhstan seeks a larger role in carrying international data. Kyrgyzstan’s President Sadyr Japarov similarly called for fiber-optic routes linking Asia and Europe. He invited technology companies to build data centers...