RIDE QUICK AS THE WIND

With the commissioning of the Baku-Tbilisi-Kars (BTK) railway and the subsequent commissioning of the first stage of the Yeni Baku International Trade Port, fundamentally new opportunities for transit cargo transshipment via the Europe-Caucasus-Asia transport corridor will appear in the Caspian region. The enormous potential of the new segment of the Iron Silk Way trans-regional route encourages regional states today to develop new logistical schemes for railway-ferry transshipment.

Multimodal segment

Today it is hard to overestimate the importance of the transport corridor Europe - Caucasus - Asia (TRACECA) for the development of Azerbaijan's transit potential. In recent years, this corridor has handled more than 4/5 of the total annual volume of transit cargo bound from China and Central Asia for Europe and back. Despite the fact that in 2009-2010, the transport sector of regional states, including Azerbaijan, experienced some effects of the global crisis, indicators of the transshipment of goods and passengers in the eastern and western direction maintained a positive trend in general.

Thus, according to the State Statistics Committee, in January-September this year, the volume of cargo transportation by the Azerbaijani section of the Silk Road increased to 42.1 million tonnes, which is 5.4 per cent more than last year. But the passenger transportation segment was used by 194.9 million people and an 8.1-per-cent growth was achieved here. The profitability of freight and passenger traffic markedly increased, and revenues from them totalled 318.6 and 61.3 million manats. Thus, in terms of money, the profitability of traffic by the Azerbaijani section of the Europe - Caucasus - Asia transport corridor increased by 19 per cent for the freight and 8.9 per cent for the passenger segment. 

It is noteworthy that the past and current years were remembered, first of all, by the increase in the transshipment of dry cargoes along the TRACECA corridor. These positive developments are largely due to significant improvements in coordination between the transport authorities of Azerbaijan, Kazakhstan and Turkmenistan, in particular the resolution of the many aspects that hindered the growth of the volume of cargo carried by sea, and first of all, their multi-modal segment. During a series of meetings of TRACECA working groups on tariffs, the focus was on the development of a new tariff policy in the Caspian segment of the corridor, which provides for discounts and preferential rates for the transshipment of dry and container cargo. It is planned to achieve this through simplified cross-border procedures and continuous passenger transportation, as well as by upgrading the local infrastructure with further access to the Trans-European transport system with the creation of a south-east axis.

The first step to implement the recommendations of TRACECA member states on a 50-per-cent cut in port fees and tariffs was taken by Ukraine. From 2012, transit cargo in the ports of Ukraine will be handled with discounts of 18 to 50 per cent. And during port work with universal containers, discounts of at least 50 per cent for the maximum flat rate fee will be provided.

Obviously, in the near future, this initiative will be taken up by the ports of the Caspian states: these possibilities were discussed at the recent 4th joint five-sided meeting of the port authorities of the Caspian states in Aktau. The representatives of Azerbaijan, Kazakhstan, Russia, Iran and Turkmenistan discussed measures to increase the cargo turnover and attract transit cargoes, including through the development of liner shipping. Special attention was paid to issues related to the development of the nonprofit information system Caspian Logic: This website is designed to provide direct access and exchange information between shippers and shipping, port and transport organizations operating in the Caspian Sea basin.

Profitable route

The strengthening of the supranational coordination of the transport segment and the expansion of the logistics structures in the Caspian region are primarily dictated by the need to establish new multimodal container routes from China to Europe. At the end of next year, the commercial operation of the Baku-Tbilisi-Kars railway line will begin, and a year later the construction of the first phase of the Yeni Baki port will be completed. By about this time, the Marmaris project, which involves the construction of a railway tunnel under the Bosporus, will be completed. It will directly link Turkey and Europe through a high-speed rail service, which will speed up the delivery of goods to European countries along the BTK corridor. Due to this, the new Iron Silk Way transport corridor created as part of the TRACECA project will provide the most cost-effective and shortest route for the transshipment of goods from Europe to Asia.

Today, the most important origin of goods in South-East Asia is China, which has expressed interest in shipping cargo, especially container-type cargo by the BTK route. An equal interest in the new corridor is expressed by the Central Asian states. Specifically, the leaderships of Turkmenistan and Uzbekistan recently expressed readiness to implement the Navoi - Turkmenbashi - Baku - Tbilisi - Kars transport project, which will significantly facilitate the export of cotton and other agricultural products to the international market. Kazakhstan has expressed an interest in the project, which provides for the export of wheat, ore concentrates, coal and other dry cargo to the world market through BTK. The advantage of transshipment by BTK is that all the above states are participating in the TRACECA transport corridor. As part of the unified platform of TRACECA, partners can agree on special lower rates and other benefits for freight transportation.

And in the reverse direction, the BTK corridor is very attractive for handling large volumes of industrial goods and consumer products for the countries of Central Asia, especially Afghanistan. Today, Afghanistan receives cargo through Russia and Pakistan, but the problems recurring with these countries force NATO and the US to seek a new supply route. Also, in the long-term, Afghanistan is of interest as a state that has a huge and unused natural potential. In this state, gigantic reserves of lithium, iron, cobalt, gold and copper, totalling more than $ 900 billion, have been discovered, and the development of these fields will require a reliable transport system, which could be the Baku-Tbilisi-Kars corridor.

Wind of change

According to preliminary expert estimates, with the launch of the BTK corridor our country alone will receive an additional cargo turnover of 6-8 million tonnes per year in the coming years, not to mention the possibility of growth in container transit between Europe and Asia. Understanding the prospects following the introduction of the new route encourages regional countries to unite for agreed development of new transport logistic schemes.

The issue is about the implementation of the project Silk Wind, which Azerbaijan, Kazakhstan, Georgia and Turkey plan to start next year. The Astana-initiated project aims to launch a container rail-ferry train by the China - Kazakhstan - Caspian Sea - South Caucasus - Turkey - Europe route. "As part of the Silk Wind, it is planned to establish the movement of a high-speed block-train with a multimodal loading scheme and create an improved system of preliminary exchange of information to attract traffic as part of the Europe - Caucasus - Asia corridor. This project is a logical continuation of the Baku - Tbilisi - Kars railway corridor, which is planned to be put into operation in the second half of next year," said the TRACECA National Secretary from Azerbaijan Akif Mustafayev.

It must be noted that at the end of November this year, the transport ministers of Azerbaijan, Georgia, Turkey and Kazakhstan signed a memorandum of understanding on the Silk Wind project. It is planned to conclude an intergovernmental agreement on the development of Silk Wind container transportation at the 10th session of the TRACECA Intergovernmental Commission in Dushanbe in May 2013.

The most important issue to be solved for the full functioning of the Silk Wind route is that customs and border operations between the countries of the region are not synchronized, the head of the EU TRACECA project Logistic Processes and Motorways of the Sea, Andreas Schoen, says. For example, a number of technologies that have long been successfully employed in many European countries are not yet fully functional in the Caspian region. These include advance notices to the customs service across the border about the nature and amount of transported goods. The uninterrupted flow of goods is still poorly provided - wheeled vehicles by Ro-Ro ships and ferry transshipment of heavy trucks. To secure the regular work of the Silk Wind train, consisting of two or more trains of standard length, it is necessary to minimize the time to cross the borders of the states of the corridor. It is also necessary to optimize the time to reorganize or reload the train in several points: crossing the border with China, and port operations in Aktau, where the cargo is loaded onto Ro-Ro ships or ferries to Baku and then to Tbilisi. Here the train will be reorganized and sent to Turkey and then to Europe by a new branch of BTK. "This train has to run on time as a passenger express train, crossing the borders, as if they did not exist at all, and all customs procedures must be carried out in advance," Andreas Schoen said.

An additional option of the Silk Wind scheme provides for a ferry service between Black Sea ports. For example, containers from China will be delivered to Aktau by rail, from there to Baku by ferry, then to Georgian ports by rail, where ferries can deliver the cargo to Turkish or Ukrainian ports. In the latter case, Silk Wind connects with the Lithuanian-Ukrainian transport corridor Viking.

One way or another, due to geographical realities, our country will play the role of a key hub in the new transport route. Thus, the participants in the transport sector of Azerbaijan will be provided with cost-effective orders and considerable profits for many years ahead.