Disparities in global trade is a significant indicator of inequality in the world. Many countries which were invisible to superpower economies are now coming to the forefront thanks to the Belt and Road Initiative (BRI). China’s BRI has created opportunities for countries that were ignored in the past decades, by investing in their economies, building infrastructure, and easing border regulations. A great example of this is the growing developmental projects in the numerous countries that form the Commonwealth of Independent States (CIS).
CIS: A Geopolitical Agenda or Logistics’ Opportunity?
Historically, CIS countries were formed with the support of Russia, and are essentially Post-Soviet countries. As of now, there are nine CIS countries and that partake in the CIS Free Trade Agreement. These are Russia, Armenia, Azerbaijan, Belarus, Kyrgyzstan, Kazakhstan, Moldova, Uzbekistan and Tajikistan. The goal of the organization was to promote economic trade and open discussion forums to promote human rights, democracy, and social justice. The CIS has been central to China’s BRI vision since in the year 2013 the Chinese President Xi Jinping first announced his intentions with the Belt and Road project in Astana, the capital of Kazakhstan. This political move at a global scale has opened plenty of opportunities for the supply chain industry, as specific routes now pass through the CIS countries.
The BRI proposed the China-Central Asia- West Asia Economic Corridor (CCAWEC), which is formed by 23 countries, including the CIS. This corridor has the freight line which passes through Kazakhstan, Azerbaijan, Georgia and Turkey. Interestingly, it crosses the Marmaray Tunnel under the Bosphorous river in Turkey. The first trip was undertaken in November 2019 from Xi’an, in China to Prague, Czech Republic. This connection now competes with the Northern route via Russia.
Through the Middle Corridor
Together, the CIS countries form, what is commonly called as the ‘Middle Corridor’. The Middle Corridor is a multimodal route that connects Europe and China, via these countries. This route includes 4,256 km of railways with an additional 508 km of the sea route. Many new developments have begun through the Middle Corridor, including a free economic zone in the Port of Baku. Apart from the connections formed via the Marmaray Tunnel, some connections are available from CIS to China, such as the line joining Turkmenistan and China. Other vital connections also pass through Tbilisi and Kars. Several test runs have been conducted on these lines since last year and they are now on their way to complete functionality.
Factors to Consider
As this freight line is relatively young, there are a few factors that influence the moving cargo. Since Central Asia has smaller economies with low population, the growth rate of trains conducting service along this corridor has been relatively less, as compared to the already established Northern route. Many of the countries along this route are land-locked, causing a sluggish development in the intermodal systems. Finally, the customs clearance process may be slightly more tedious due to the number of countries that are covered.
However, there is no denying that this corridor has excellent potential for growth. With more than 51 projects across the different CIS countries, the BRI’s support is drastically improving the economies of these countries and opening doors to conducting more trade. This route has greater geographical coverage and with a developing port in Iran, a growing connection to intermodal systems. This allows logistic companies to grow their customer base in these countries as well. There has also been an increasing influence to have common financial markets that would standardize customs clearance regulations across.
As this line is comparatively new, there are still some grey areas when it comes to assessing the performance of freight trains going along this route. At the same time, many companies find rail as a better alternative to transporting cargo in these land-locked countries, as it is faster than trucking and much cheaper than air freight.