Azerbaijan’s exciting transport & logistics development
Published on 12/04/2017
Azerbaijan’s ongoing development of its non-oil sector is crucial to ensuring economic growth. Transport and logistics is one area outlined by the government for major expansion. 2016 saw Azerbaijan plough ahead with some big projects, infrastructure construction and more.
Let’s delve into how transportation and logistics service have received a big boost throughout Azerbaijan, and what the future holds for the country.
Azerbaijan’s transport & logistics road map
The Strategic Road Map on Development of Logistics and Trade was approved by Azerbaijan’s President Ilham Aliyev in 2016. It is the core guiding document regarding the upgrading and improvement of the nation’s transport and logistics sector.
Within the plan, Azerbaijan hopes to create 18,900 jobs in the logistics and trade industry by 2020, adding an additional $363 million to the country’s $73.5 billion GDP.
Meanwhile, there are plans to increase Azerbaijan’s share in maritime freight traffic over several routes by 2020:
• Central Asia-Black Sea route - up to 40%
• Central Asia-Europe – up to 25%
• China-Europe – up to 3%
• Russia-Iran – up to 40%
• Iran-Black Sea – up to 25%
Carrying out measures to develop the transportation and logistics sector gives a reason to say that both 2017 and the following years will be more successful for the industry. Rail too, has been identified as another sector ripe for expansion.
Azerbaijan pioneers Trans-Caspian International Transport Route
The Caspian Sea is a fertile environment for transport and logistics, and is a vital link between East and West. At the start of 2016, Azerbaijan, its neighbours Georgia and Kazakhstan, and Ukraine signed a protocol establishing competitive cargo tariffs on the Trans-Caspian International Transport Route (TCITR).
The TCITR is one of the region’s biggest cargo projects. After being established in April 2016 in Baku, the route now extends from China in the east through Kazakhstan, Azerbaijan, Georgia and Turkey, passing through the Caspian Region onward to Europe.
Rail freight operators, including Azerbaijani companies ADY Express and ACSC Logistics, alongside KTZ Express and Georgia’s Trans Caucasus Terminals LLC, provided the impetus for the TCITR’s development. Competitive tariffs were introduced in June 2016, grabbing the attention of other international cargo carriers.
Ukraine and Lithuania signed a Memorandum of Understanding (MoU) to bring the Viking container train onto the TCITR, travelling from Europe to China via Azerbaijan and Kazakhstan. A number of international freight handlers, including Ukrazliznytsia (Ukraine), Ukrferry (Ukraine), Translogistics SRL (Moldova), PKP LHS (Poland) joined the TCITR’s steering committee last year, while Rail Cargo Hungaria Zrt (Hungary) joined too.
An international office for the corridor was established in Astana, Kazakhstan, in October 2016 – the goal of which is to further foreign trade, while also developing alternative integrated logistics products via the TCITR going forward.
Finally, in a move that could see greater levels of rail freight passing through Azerbaijan, the nation’s rail authorities met with their Georgian and Kazakh counterparts in December. The organisations inked an MoU to implement more features on the Trans-Caspian route – with the aim of increasing container train traffic to 1,000 trains a year by 2020.
North-South Corridor aids Azerbaijan transport & logistics development
The North-South corridor, linking India to Russia and beyond, has been something of an ongoing saga in the transport industry. After years of uncertainty, negotiations and deals, the corridor is finally close to reaching operational status – with Azerbaijan as a major stop on the route.
So how has Azerbaijan contributed to this corridor’s implementation? The year started with construction of essential infrastructure, not least a railway bridge over the Astarachay river and 8.5 kilometres of track crossing the Iranian border from the nearby Azerbaijani city of Astara.
Construction of one of the corridor’s most important rail routes, the Rasht-Astara railway, is currently in Iran’s hands. Azerbaijan agreed a $500 million credit line so Iran can complete its construction obligations and get freight flowing between the two states in 2017.
Both Azerbaijan and Russia have promised that companies will be able to enjoy competitive cargo rates on their stretches of the North-South transport corridor.
It should be pointed out that, at present at least, the North-South route is multi-modal. In October, all of the participating nations joined the cargo transportation process. Containers were first delivered by sea, from the port of Mumbai in India, to the Iranian port of Bandar Abbas. From there, they were delivered to Astara by road, loaded onto trains, and transported to Russia via rail.
With the above two ongoing schemes, Azerbaijan’s importance as a rail hub is only going to grow in the very near future. But rail is not the only mode on Azerbaijan’s transport and logistics development agenda: maritime freight is expected to receive a boost in the very near future.
Baku International Sea Trade Port expansion plans
Baku is not only Azerbaijan’s capital – it is one of the Caspian Sea’s most active ports. At present, some 9 million tons of cargo passes through the port every year – but it has been earmarked for significant expansion going forward.
September 2016 saw the signing of an agreement between the Port of Baku and Dubai Port World (DP World), one of the world’s largest port operators, for consultation on how to turn Baku into a free trade zone.
Soon, freight operators and logistics firm situated at the port will be able to enjoy cheaper rates, potential tax breaks and expanded operations, if Baku’s improvement programme matches that of other ports such as Vladivostok.
Construction of more facilities, such as extra berths, warehouses, cranes and cargo processing areas, is underway at Azerbaijan’s chief port. It is expected this first phase will be completed during 2017, after which Baku’s goods capacity will reach nearly 2,000 tons a day.
After completion of the first expansion phase, the Port of Baku will be able to receive up to 11 million tons of cargo per year. It will also be able to handle up to 50,000 TEUs annually.
Be part of the future of Azerbaijani transport & logistics at TransCaspian 2017
If you want to uncover the potential of Azerbaijan’s logistics and freight handling sector, and get to grips with the nation’s major operators, head to
TransCaspian 2017.
Located at the Baku Expo Centre, between 26-28 April, TransCaspian brings together transport and logistics companies, sea and river port authorities, intra-logistics equipment producers and many more major industrial figures, with international operators. It is the ideal platform to expand into Azerbaijan and beyond.
It is not too late to register your interest in attending this major transport and logistics exhibition. Simply get in touch to learn more or to let us know you are interested in visiting TransCaspian 2017.