Enhancing The North-South International Transport Corridor.

A useful event occurred at the 4th International Foreign Economic Forum organized by the Plekhanov Russian Economic University on November 23, 2023. The gathering focused on the North-South International Transport Corridor, and how best to further streamline and improve it as freight throughput is continually increasing.?

It brought together Russian railroads (RZD), and several countries (India, Iran, Russia, Turkey, Azerbaijan, Kazakhstan, Armenia, Belarus, Tajikistan, Kyrgyzstan, Oman, and Syria) that are current participants in the ITC, as well as potential future participants from African ports.

In the words of Alexander Sivertsev, Director for Container Transportation at RZD Logistics, "It is important to bring all participants of the Western, Eastern, and Caspian routes of the corridor into a single supply chain, as well as to combine the efforts and competencies of all participants. It is important to avoid fragmentation and implement a unified approach to logistics on this route in order to effectively establish interaction between railroads and maritime transport".

So far this year, more than 18 container trains were sent from Russia along the North-South ITC. The tasks for all participants are now clearer; they include improving the overall track conditions, reducing both transit times and delivery costs. Russian railroads are now engaged in improving the way: reducing delivery time and cost. For example, the rate for a 40-foot container sent by the initial train along the ITC in October 2022 was about $10,000 (Moscow - Nava-Sheva (port of India). Today it is less than $5,000 and still dropping.

The introduction of Chinese logistics technologies, both infrastructural hardware and software to seamlessly manage movement and handling along the entire ITC is expected to have a positive coordinating and standardizing effect. The process of continuous improvement is key with the ITC, leading to reduced delivery times, efficient use of rolling stock, and better cost-effectiveness, thus allowing for geographic branching and extending the corridor which would be of benefit to many regions previously underserved easing both and trade connectivity.

Today countries participating in the North-South ITC are working on extending the ITC to include Africa. While there are no settled plans as of today, steps are being taken specifically in the Astrakhan region where work is being done to develop the needed infrastructure suitable for future increased throughput to handle eventual Africa trade as well. Due to its location, the region is a strategically important transportation hub of the North-South ITC. The Astrakhan region is at the crossroads of transportation routes and occupies a key position on the shortest economically beneficial intermodal route.

Both the Astrakhan and Olya/Lagan seaports operate in the Astrakhan region. In 2022, the total cargo turnover of the ports increased by 14% and reached 3 million tons. At the end of October 2023, the cargo turnover already amounted to 3.6 million tons, and the cargo flow increased by 52%. The transshipment of equipment increased by 50%, various cargo - by 40%, and produce - by 27%, as well as the transshipment of grain, which is now the main cargo in the ports, has increased by 2.5 times.

The development of cargo turnover along the North-South ITC requires expanded fleet construction as well to allow for serious volume growth. These past 6 months have seen a project underway to build a series of container ships adapted to the conditions of the Caspian Sea.?

At least 45 new container ships of Volgo-Don Max class are needed for the operation of the North-South ITC for crossing the Caspian Sea. Their total cost is estimated at over RUB 78 billion. Current financing plans allow for the construction of only 25 ships according to David Adamia, Deputy General Director for Civil Shipbuilding, United Shipbuilding Corporation (USC), but are likely to increase significantly in the coming few years.

Additionally, dredging work is now ongoing, increasing the draft from the current 4.2 to 4.5 meters in the Volga-Caspian Sea Shipping Canal, the only navigable artery connecting the Caspian Sea and Russia's inland waters.

Transit cargoes from Belarus are now delivered through the region, as well as Russian goods transported through Iran to India and other countries. The project is increasingly central to the economic enhancement of several countries, seeing rapid development and welcome expansion in the coming years, and as a game-changer, it is well worth monitoring closely.

Paul Goncharoff