Supply Chains - The Times Of Central Asia

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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...

C5+South Korea

South Korea Steps Up Central Asia Critical Minerals Push

The first South Korea–Central Asia summit, held in Seoul on September 16, capped three days of bilateral meetings that produced more than 70 agreements and memorandums. The leaders agreed to meet every two years, a separate C5+1 forum for industry ministers was established, and critical minerals took a central place on the new agenda. The main question now is how many of those documents will translate into mines, processing plants, and long-term contracts. South Korea needs reliable supplies of metals for its automotive, electronics, battery, and energy industries. Central Asia wants to use that demand to develop domestic processing and reduce its reliance on raw material exports. Seoul proposed combining the region’s resources with its own exploration, mineral processing, and manufacturing technologies. President Lee Jae Myung spoke of cooperation across the production chain, from identifying deposits to manufacturing finished products. Rare metals centers being established at key locations in Central Asia are intended to support joint research and specialist training. Until now, South Korea has worked with the region’s countries largely through bilateral ties. The new C5+1 format adds a regional mechanism to those relationships. Kazakhstan will host the next summit in 2028. Kazakh financier and analyst Rasul Rysmambetov believes the value of the new format will depend on the region’s ability to secure tangible industrial results. He sees South Korea as an attractive partner because of its experience with rapid industrialization and its strengths in building industrial facilities. “The priority for Central Asia is to stop selling raw materials. We need to establish processing in the region. The heads of state’s visit to Seoul was highly productive. In fact, all summits in similar formats have been productive. The main question now is how to move away from exporting raw materials and toward joint industrialization,” Rysmambetov told The Times of Central Asia. Uzbekistan put forward a broader regional proposal. President Shavkat Mirziyoyev called for an investment alliance for critical minerals, with processing clusters bringing together exploration, mining, and the production of high-value goods. Uzbekistan and South Korea are already developing a joint rare metals center and have agreed to strengthen cooperation throughout the production chain. Kazakhstan offered Korean businesses a broader package covering rare metals, nuclear and clean energy, and artificial intelligence. Urban development was also part of the talks, including the Alatau Smart City project near Almaty. The countries upgraded their ties to a comprehensive strategic partnership and signed a memorandum on the peaceful use of nuclear energy. The energy agreements also cover conventional resources. In April, South Korea said it had secured 18 million barrels of Kazakh crude oil. In Kyrgyzstan, Korean organizations are working with their Kyrgyz counterparts to identify possible antimony and tungsten projects and strengthen exploration capacity. Tajikistan is also offering cooperation on antimony, as well as precious metals, building on the first Korea–Tajikistan Minerals Forum, which took place in August. The minerals agenda is complemented by Korean willingness to invest in transport and infrastructure. South Korea and Uzbekistan agreed to expand Korean participation in...

Middle Corridor

Middle Corridor Freight Grows, but Eastbound Cargo Lags

Container traffic is growing along the Middle Corridor from China and Central Asia toward Europe, but the route is far less busy in the opposite direction. In the first eight months of 2026, about 80% of container traffic moved westward and only 20% eastward. Operators are now looking for goods in Europe and Türkiye that can be shipped back across the Caspian Sea and Kazakhstan toward Central Asia and China. Container traffic totaled 53,574 TEU along the Trans-Caspian International Transport Route, also known as the Middle Corridor, in January–August. One TEU is equivalent to a standard 20-foot container. During the same period last year, the figure was 48,326 TEU, meaning traffic increased by 11%. But the flows were highly uneven. According to ADY Express, 42,642 TEU moved from east to west, compared with just 10,932 TEU in the opposite direction – a ratio of almost four to one. Interest in the route increased sharply after 2022, when companies began looking for additional ways to move goods between China and Europe without transiting Russia. Over the past several years, participants in the Middle Corridor have focused on increasing shipments from China. New train services have been introduced, while countries along the route have invested in railways, terminals, and Caspian ports. Chinese freight has grown, but there is still not enough cargo for the return journey. For transport operators, the issue comes down to finances. Once containers reach Europe, they need to be used again or repositioned. If there is cargo for the return journey, the equipment generates revenue in both directions. Without it, operators can face the cost of moving empty equipment. The 80%-to-20% split, however, does not establish how many containers actually make the return journey without cargo. Railway companies themselves are now acknowledging the shortage of eastbound cargo. “For this, backhaul freight is necessary,” Emil Mammadov, Adviser to the Chairman of Azerbaijan Railways, said at the Black Sea and Caspian Freight Forum 2026 in Baku. According to Mammadov, attracting cargo from Europe would help increase freight volumes, optimize transportation costs, and allow at least some containers to be returned to their countries of origin. Until now, the route has been promoted more actively in China, Kazakhstan, Azerbaijan, Georgia, and Türkiye. European companies have received less attention. Railway operators are now looking for customers at the western end of the corridor as well. A shipment from Türkiye showed what such a return journey could look like. In May, KTZ Express and Pasifik Eurasia dispatched a train from Izmir to China carrying household refrigerators. Fifty 40-foot containers crossed the Caspian Sea, traveled through Kazakhstan, and continued into China via the Altynkol border station. For now, such shipments remain limited. The Chinese side continues to push for more westbound traffic. On September 9, Azerbaijan Railways held talks with Shanghai International Port Group and Lianyungang Port on expanding shipments of Chinese goods through Kazakhstan, across the Caspian, and through Azerbaijan toward Europe. ADY Express also reported that 265 container block trains operated along...

opinion

What Building Central Asian Supply Chains Taught Me About AI

I took over spare-parts supply at BPK Auto in Ust-Kamenogorsk in the mid-2000s, at the age of 25, moving from selling cars. The company was the general dealer for VAZ in Kazakhstan, assembled Niva models in the city, and was taking on Skoda, Chevrolet, and Kia while building service centers across the country to meet the expectations of those brands for a dealer. My job was to keep parts flowing to all of it. Several thousand vehicles came through in a month, and a single car contains something like 50,000 separate part numbers. The service teams wanted as many of those as possible sitting on the shelves. From where they stood, that made sense, because they were judged on whether a mechanic could start a repair the same day, whether a customer complained, and an ISO audit was running over the service operation at the same time. From the procurement side, the arithmetic looked different. Some parts cost two or three thousand dollars and were fitted once or twice a year, and holding them across four model lines tied up a large share of the company's working capital. I built the forecast in spreadsheets and checked it against actual sales once the month closed in 1C. To run it, I needed the service side's own records: how many vehicles of each type they had seen, and what had been repaired. I asked for them for months. They would not release them. Some of that was habit; a warehouse full of everything being what a well-run operation had looked like for the previous 40 years. More of it sat in how the two departments were counted. My result was recorded the moment the parts moved into the service center. Theirs was recorded much later, when the car left the workshop. Nobody was measured by the number that would have made the forecast work. The forecasting was the straightforward part of that job. The difficult part was building an operation in which people shared the information behind the forecast and were expected to act on its findings. Why a Better Model Would Not Have Changed the Outcome Put one of today's AI demand-forecasting systems into that same warehouse and very little changes. The forecast would be far better than anything I produced by hand. It would still depend on service records that nobody was willing to release, and where records did exist, it would be reading entries written up at the end of a long shift. It could not grant the purchasing manager authority to reorder against it, nor could it alter the measures by which the service department was judged. Better intelligence does not repair the path between operational data and operational action. Every party you add to that path lengthens it. A distribution network across Kazakhstan and Kyrgyzstan can run from a manufacturer to over 45,000 small retail outlets, served through more than 18 distribution centers, with 1,391 field staff taking and checking orders on the ground. An order begins...

Pax Silica

Kazakhstan’s Role in Pax Silica After WAICO

Kazakhstan became the first Central Asian country to join the U.S.-led Pax Silica initiative. It also signed the agreement establishing China’s World Artificial Intelligence Cooperation Organization, or WAICO. That dual participation could now become consequential. Reuters reported on August 14 that the State Department had prepared an undated draft letter warning the 35 signatories of the U.S. AI Opportunity Statement that participation in Pax Silica could be incompatible with membership in competing initiatives. Kazakhstan is the only country presently known to have joined both frameworks. The draft could still change, and the State Department has not publicly adopted the position it contains. Kazakhstan’s decision to join both initiatives also reflects its long-standing multi-vector foreign policy. Astana has sought practical relations with competing powers rather than exclusive alignment with any one bloc, an approach its official foreign-policy concept describes as maintaining mutually beneficial relations with states and organizations of practical interest to Kazakhstan. Joining a U.S.-led supply-chain initiative and a China-led AI organization fits that pattern, although it also makes the question of compatibility more consequential. Washington’s concern is understandable. Pax Silica is intended to create trusted supply chains, strengthen investment security and protect sensitive technology and infrastructure from undue access or control. Membership is meant to represent more than attendance at another diplomatic forum. The question is what Kazakhstan has agreed to do through WAICO, how those commitments will be implemented, and whether they create competing expectations or affect specific Pax Silica projects. Kazakhstan’s Role in the Supply Chain Pax Silica spans the AI supply chain from energy and mineral processing to semiconductors, data centers and models. Kazakhstan also has ambitions in digital infrastructure and AI services, but its strongest existing capabilities relevant to Pax Silica are concentrated in energy, mineral production, selected processing and Eurasian connectivity. The framework is designed to combine the different industrial strengths of its participants rather than reproduce the entire technology chain in every country. Kazakhstan produced about 40% of the world’s mined uranium in 2025. Kazakh-origin material accounted for 28% of uranium delivered to U.S. civilian reactor operators that year, second only to Canada. Kazakhstan’s most immediate relevance is not semiconductor production, but its role as an energy, minerals and processing partner. Uranium is the clearest example, providing large-scale fuel supplies for the power systems on which expanding AI infrastructure depends. As TCA recently noted, Kazakhstan sits at the nexus of resources, processing capacity and connectivity, and its role extends beyond raw-material extraction. Ulba Metallurgical Plant produces uranium dioxide powders and nuclear-fuel pellets, along with beryllium, tantalum and niobium products. Kazakhstan also produces copper, titanium, silver, aluminum and zinc used across power, communications, aerospace and advanced manufacturing. Its position on the Middle Corridor also gives it a logistics role connecting Central Asian production with Caspian and European markets. Other contributions remain prospective. Eurasian Resources Group (ERG) plans a 15-tonne-a-year gallium facility backed by a long-term supply agreement with Mitsubishi, while a U.S.-supported tungsten project is moving forward with plans to mine and refine the...

Fuel Shortage

Russia’s Fuel Crisis Deepens as Queues and Rationing Return

Russia’s fuel shortages have worsened again after easing in late July, with queues returning to filling stations and sales restrictions reappearing across several regions. In early August, hours-long queues were reported in at least 12 regions. Orenburg and Lipetsk reinstated systems allowing motorists to buy fuel on alternate days according to their license plate numbers. Similar restrictions had been used during the first wave of shortages in June and July. The shortages have been linked to refinery outages following Ukrainian drone attacks, high seasonal demand, and problems moving fuel between regions. Russia’s government has acknowledged difficulties with fuel supplies in several regions and ordered officials and oil companies to keep working to stabilize the domestic market. The pressure has also led to confrontations. In Volgograd on July 17, police detained five residents who were recording a video appeal to Alexander Bastrykin, head of Russia’s Investigative Committee, about fuel shortages and priority access at filling stations. One participant was later jailed for five days after the authorities said he resisted police. Local reporting said officials treated the recording as an unauthorized public gathering. Moscow has meanwhile taken increasingly broad steps to protect domestic supplies. The government extended restrictions on fuel exports from August 1, with the gasoline ban due to remain in force until January 31, 2027. It has also temporarily allowed production and imports of lower environmental-grade gasoline as it tries to increase availability. The effects are already reaching Central Asia. Kazakhstan is tightening controls on its own fuel market as Russia looks for additional supplies, while Kyrgyzstan has opened direct talks with China as Russian deliveries become less reliable. A second wave of shortages in Russia adds further pressure on governments that have long depended on Russian petroleum products.