Rail transportation along the North-South corridor grew by 40% in January-May
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Rail transportation along the North-South ITC grew by more than 40% in five months of 2023, to 4 million tons. Most of the volume goes by the western route, where there is not yet a continuous railway connection. In the eastern and trans-Caspian directions, growth exceeds 80%, but the volumes are still relatively small. Given the tightening of export restrictions on the part of Western countries, analysts expect continued growth in demand in the Iranian direction even before the completion of the Rasht-Astara railway.
From the materials of Russian Railways, it follows that transportation along the international transport corridor (ITC) “North-South” in January-May amounted to 4 million tons, an increase of 41.8%. The main share fell on the western route connecting Russia with Iran through Azerbaijan – 3.6 million tons (an increase of 37.9%). On other corridors, the dynamics is higher, but the volume of cargo transportation is less. Thus, 353.5 thousand tons were transported along the eastern route through Turkmenistan and Kazakhstan (an increase of 80.3%). Trans-Caspian – 117.7 thousand tons (an increase of 80.5%).
It is on the western route, where the main railway freight traffic follows, that 162 km are missing for continuous railway communication in the Rasht-Astara section in Iran. Russia and Iran signed an agreement on financing the section on May 17 (see Kommersant dated May 18), Moscow will provide a state loan for €1.3 billion out of the required €1.6 billion. It is assumed that at first the section will be built on the European gauge adopted in Iran – 1435 mm, and then duplicated on the Russian 1520 mm. It is planned to complete the project by the end of 2027, after which the volume of deliveries along the western route of the corridor will increase to 15 million tons. Now the infrastructure gap is being closed by vehicles.
The development of the trans-Caspian route of the ITC “North-South” is constrained by a lack of supply of flights and a lack of infrastructure, but Russian transport companies express their readiness to put ships on Caspian voyages, and a container terminal is expected to be commissioned in the port of Olya as early as 2024 (see “Kommersant” dated April 19 ). In May, the Iranian agency ISNA reported that Russia and Iran signed an agreement on the construction and purchase of 20 ships for the transport company General Cargo.
The growth of traffic on the eastern route is largely due to the significant benefits of the railways of the Russian Federation and transit countries. At the end of 2022, the board of JSC Russian Railways introduced a 20% discount for a year on container transportation on the eastern route through Kazakhstan and Turkmenistan. The railways of Kazakhstan provided a 40% discount on the transportation of the main range of goods in the direction of Turkmenistan, except for grain, milled products and oil products, and the Turkmen Railways – a 40-50% discount on transportation to border crossings with Iran.
To stimulate the transportation of containers, the railways of Kazakhstan, Turkmenistan and Iran have introduced uniform reduced rates for the use of infrastructure for 2023 at $0.15–0.18 per TEU-km and $0.24 per FEU-km. According to Deputy Prime Minister Alexei Overchuk, this year the cargo traffic on the eastern route will exceed 1 million tons, in 2025 it is expected to reach 5-7 million tons.
The growth of cargo traffic along the ITC “North-South” will continue, the head of “Infoline-Analytics” Mikhail Burmistrov expects. “In general, the situation looks like that export restrictions against the Russian Federation will increase, so the demand for transportation in this direction will continue to grow, including due to the expansion of the list of available logistics services,” he says. The analyst believes that while infrastructure constraints remain, growth will continue even before completion of the Rasht-Astara section.
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