On the shores of the Caspian Sea, containers of all colours are stacked up in the port of Aktau, in western Kazakhstan. Arriving by rail, they will then set sail by ferry in a few hours to the brand new Azerbaijani port of Alat, on the other side of this inland sea at the junction between Europe and Asia. A choreography well assimilated by the hundreds of port employees, responsible for ensuring the rapid transhipment of goods from wagons to ships. “But there you go, with the influx of containers coming from China, we will soon have no more room!” shouts Talgat Nagumanov, a specialist in the transport logistics department at the port of Aktau, in the maritime hubbub. That’s why management is going to transform this dusty wasteland behind the platform into a new 19-hectare container storage hub to develop this booming transport route.
“We have already achieved, in the first six months of 2024, the same volume of container exports as during the whole of 2023, i.e. 22,000 TEU containers [NDLR : équivalent vingt pieds]”, enthuses the chief engineer of the port, Amir Atambayev. The Kazakh port owes such performance to its favorable location: it is located right in the middle of the Middle Corridor, a trade route that connects China to Europe via Kazakhstan, Azerbaijan, Georgia and Turkey, before reaching the Black Sea and European countries.
A shorter alternative
“Geopolitical events have given a real boost to the development of the Trans-Caspian Route,” admits Gaidar Abdikerimov, Secretary General of the Transcaspian International Road of Transports (TITR) association, which coordinates the 25 transport and logistics companies taking part in the project, from 11 different countries. From his office in one of the skyscrapers overlooking the Kazakh capital Astana, this official is of course referring to the war in Ukraine and the sanctions against Russia, which are diverting operators from the traditional land trade route of the “northern corridor”, connecting Europe to China by rail through Russia. So since 2022, the middle corridor, which bypasses Russian rail lines, has been on the rise. It is also presented as a 2,000-kilometer shorter alternative to the northern route: the travel time is estimated at between eighteen and twenty-three days of travel, compared to twenty-nine days through Russia. In 2022, the volume of products exported reached 1.7 million tonnes via the central corridor, a dazzling increase compared to the 870,000 tonnes in transit in 2021. This year, it should increase to 4 million tonnes.
The Trans-Caspian Highway is not new: it was first driven in 2013 by the Chinese One Belt One Road Initiative, which devoted colossal sums to recreate the new Silk Roads. Now, these massive investments are no longer dominated by Beijing: in January, the European Union and its partners announced in Brussels that they were committing €10 billion to develop transport and logistics projects in Kazakhstan and other Central Asian countries for better connectivity around the corridor.
This places Kazakhstan, the most dynamic country in the region, at the center of world trade, with its 3,000 kilometers of railway that connects the Chinese border checkpoints of Altinkol and Dostyk to the Caspian ports of Aktau and Kuryk. “Napoleon said: ‘If you know the geography of a country, you can understand and predict its foreign policy,'” Amir Atambayev exclaims from his office, one eye on yet another ferry leaving the port to reach Europe. And it turns out that we are the heart of Eurasia!” sums up the chief engineer, sure that his country is playing big with the development of the trans-Caspian route.
Five countries and two seas
“Kazakhstan is clearly a leader in the development of the middle corridor,” says Wilder Alejandro Sanchez, president of Second Floor Strategies, a Washington-based consulting firm, and an analyst of trade issues in Eastern Europe and Central Asia. “This allows it to position itself as a leading power in Central Asia, and to play between Western and Chinese partnerships to develop its infrastructure.” And above all, the growth of the route gives it an additional route to export its oil, which is the wealth of the Kazakh state. Each year, 80% of its oil production transits through the traditional Caspian Pipeline Consortium (CPC), through Russian territory, making the largest Central Asian country dependent on the infrastructure of its Russian neighbor, which has become unpredictable. So, at the port of Aktau, three oil terminals are being renovated, to double exports to Europe within two years through the Caspian.
“Let’s be frank, the Middle Corridor will not replace the CPC,” said Deputy Prime Minister Roman Vassilenko, pointing out the absence of pipelines around the Caspian Sea, which therefore cannot keep up with the CPC via Russia. “It is an alternative, on a smaller scale, to diversify our relations.” Indeed, making the Trans-Caspian route a serious competitor to the northern one will take time. According to World Bank forecasts, by 2030, 10 million tons of cargo will transit through the Middle Corridor, which pales in comparison to the 34 million tons transported annually via Russia. According to some estimates, the route currently has only about 5% of the throughput capacity of the northern line.
Its low volume then reflects one of its biggest flaws: its multimodality. Crossing five countries and two seas, goods must be transported via different vehicles, and are subject to differences in customs tariffs, far from being common between countries. Kazakhstan, Azerbaijan and Georgia announced only last year that they were seeking to unify rail tariffs and create a joint logistics company, a measure that is gradually being implemented.
That’s not all: in 2022, major bottlenecks in the aftermath of the war in Ukraine also showed the limits of the route in terms of logistics and transport capacities. “Container traffic collapsed by 38% in the first eight months of 2023,” notes the World Bank report.
Drying up of the Caspian Sea
“Today, the traffic jams of goods have been resolved,” says Gaidar Abdikerimov. “The main obstacles remain customs tariffs and the slowness of transport through the Caspian Sea due to the lack of infrastructure, both on the Azerbaijani and Kazakhstani sides,” continues the Secretary General of TITR. Indeed, a ship leaving Kazakhstan generally takes eighteen hours to reach Azerbaijan, for a journey of only 80 kilometers. “There are also regular shortages of ferries,” points out Aitakli Nourmagambetov, head of the marketing department of the port of Kuryk. Indeed, Kazakhstan still does not have its own ships and uses those of the Azerbaijani company, although it is considering building “between two and four” in the coming years.
The Caspian Sea raises another problem: that of its drying up, which could jeopardize the sustainability of the middle corridor. According to Kazhydromet, the Kazakh hydrometeorological service, the sea level is falling by several dozen centimeters per year. And it is in Kazakhstan that the drop in level is most obvious, the northeastern part of the Caspian Sea being the shallowest. The height of it for ferries and oil tankers, weighing several tons: most must not be loaded to more than 75% of their capacity, under penalty of hitting the bottom! A substantial loss of income, which the ports of Kuryk and Aktau in Kazakhstan are trying to cover by undertaking long and costly dredging work, to increase the depth of the water in their maritime zone.
“This does not scare foreign investors,” Gaidar Abdikerimov tries to reassure, although the sustainability of the project is under strain. “And what will happen if the war in Ukraine stops tomorrow, and Russia gradually reintegrates into the international community? Will the median corridor remain relevant if Russia once again finds its place as a freight hub between Asia and Europe?” Wilder Alejandro Sanchez also wonders. In total, according to the European Commission’s forecasts, 18.5 billion in investments are needed for the median corridor to achieve its objectives and its full potential. Until then, will the international situation remain on its side?
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