From the ancient Silk Road to the historic spice trade from India, the exchange of goods between Europe and Asia has always driven economic growth and exploration. However, these significant trade routes haven’t been immune to disruptions. Recent conflicts, such as the war in Ukraine and attacks on vessels in the Red Sea, have severely impacted the East-West cargo flows through Russia. European shipping lines now find themselves needing to navigate around Africa and traverse the Indian Ocean to reach Asia, a detour that escalates transportation costs and carbon emissions per voyage.
In response to these challenges, carriers and shippers are actively seeking alternative routes. This quest for new pathways has brought attention to the Caucasus and countries around the Caspian Sea, regions that sit strategically between Europe and Asia. Over the past few years, substantial investments have been made in the maritime and logistics infrastructure of this area. Since 2017, the Trans-Caspian International Transport Route (TITR), also known as the Middle Corridor, has been a focal point of this development. Spanning 11,000 kilometers, this route connects China to Europe via Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, Türkiye, and the Black Sea.
The impact of this investment is evident. The cargo handling capacity of the Middle Corridor has soared from 9,000 TEUs in 2017 to 33,600 TEUs in 2022. This growth trajectory is likely to continue, fueled by foreign investments from China’s Belt and Road Initiative (BRI), the Gulf Peninsula, the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), and the Asian Development Bank (ADB), among other public and private entities.
Despite its promise, the Middle Corridor is not without its challenges. While it offers a viable alternative for interregional trade, the existing port, railway, and inland logistics infrastructure are not yet capable of handling the volume of container traffic needed to fully replace traditional East-West shipping routes. Bureaucratic barriers, lack of harmonized customs procedures, and insufficient container handling equipment at terminals are significant operational hurdles that need to be addressed.
Given these dynamics, several key points merit discussion:
How are international conflicts influencing trade flows across the Middle Corridor? The war in Ukraine and maritime threats in the Red Sea have disrupted traditional routes, pushing shippers to explore the Middle Corridor as a safer alternative. These disruptions highlight the fragility of established trade routes and the necessity for diversified pathways.
Can the Middle Corridor facilitate an alternative route for Eurasian trade? The increasing cargo capacity and investment in infrastructure suggest that the Middle Corridor has potential. However, realizing this potential fully will require addressing current infrastructure and operational challenges.
What are the challenges and opportunities ahead for ports and terminals in the region looking to increase their stake in Eurasian trade? Ports and terminals in the region have a unique opportunity to become critical hubs in global trade. However, they must invest in modernizing infrastructure, streamlining customs processes, and enhancing their container handling capabilities to attract more traffic.
How feasible is a multimodal transport route joining Eastern Europe and West Asia? The Middle Corridor already demonstrates feasibility as a multimodal route, combining rail, sea, and road transport. Yet, its full potential will only be realized through coordinated international efforts to improve connectivity and efficiency.
Analyzing the ROI on infrastructure development across the Middle Corridor, the return on investment (ROI) in this context goes beyond financial metrics. The strategic positioning and enhanced connectivity provided by the Middle Corridor can drive economic growth, improve regional trade balance, and reduce dependency on traditional routes fraught with geopolitical risks.
As the world continues to navigate the complexities of global trade, the Middle Corridor stands out as a beacon of opportunity. Its development and optimization could redefine trade flows between Europe and Asia, offering a resilient alternative in times of disruption.
