Economic Growth Fuels Surge in Cargo Transportation Across Central Asia

ASTANA – The economic development of Central Asian countries has led to a significant uptick in cargo transportation, fueled by various factors, Kazinform reported on March 13 in an article about logistics progress in the region.

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Factors driving economic development

According to experts, investments in infrastructure, such as the construction or modernization of roads, railways, ports, and cargo terminals, coupled with trade agreements, can stimulate cargo transportation and transit throughout Central Asia.

Political stability in the region also plays a crucial role in ensuring the safety and predictability of cargo transportation.

Geopolitical turbulence has expanded opportunities for Central Asian countries to attract new sources of investment and conclude transport agreements with the European Union (EU). The package of agreements will include not only transport topics but also insurance, security, information support, and other capital-intensive areas of cooperation.

Rise in freight volumes

The transit of goods through Kazakhstan from January to November last year grew by 21% compared to 2022, surging 29 million tons. Overall, 980.7 million tons of cargo were transported in 2023, a 4.4% increase from the previous year. Investments in the industry soared by over 1.5 times to 1.8 trillion tenge ($3.9 billion), primarily directed towards infrastructure development to boost transportation volume and quality.

Presently, all Central Asian countries record an increase in cargo transportation. In Uzbekistan, international freight transport reached 59.2 million tons in 2023. The Kyrgyz Republic witnessed a total cargo transportation volume of 51 million tons.

Tajikistan reported a 14% increase in freight traffic volume to 32.6 million tons, while international cargo transportation reached 2.2 million tons. Cargo transportation volumes in Turkmenistan increased by 3.9%.

Economic benefits and regional partnerships

Large-scale production activities are underway in Kazakhstan and Uzbekistan, where major Western companies have relocated some of their operations from Russia. European companies are drawn to the region due to access to affordable gas and electricity. Dozens of giants, including Samsung, Nestle, and Glock, have launched or are planning production ventures in Central Asia.

Azerbaijani political scientist Ilgar Velizade highlighted the growing interest of both European and Chinese companies in the Middle Corridor, which passes through Central Asian and South Caucasian territories.

According to him, the Trans-Caspian International Transport Route (TITR) serves as the central link of this corridor, witnessing a doubling of transportation volume compared to the previous year, reaching 2.5 million tons. This figure is expected to double again soon, driven by a roadmap signed between Azerbaijan, Georgia, Kazakhstan, and Türkiye. Each country has committed to synchronously developing its transport infrastructure, with both China and Europe expressing support for these plans.

Velizade noted that the complete stabilization of the situation in the South Caucasus creates favorable conditions for increased cargo transportation along the Middle Corridor, which will also be facilitated by the construction of the Zangezur transport corridor.

Container transportation

In November 2023, officials from the railway departments of countries involved in the Central Asia, South Caucasus, and Anatolia (CASCA+) international multimodal transport and transit route met in Ashgabat to address freight traffic concerns.

Representatives from Azerbaijan, Georgia, the Kyrgyz Republic, Türkiye, Uzbekistan, and Turkmenistan, along with logistics companies, convened to discuss strategies for enhancing the efficiency of the corridor. Since its inception in 2019, the route has facilitated the transportation of approximately 30,000 containers.

Attendees set a goal to increase container transportation to 30,000 units along this route for the current year. Such growth is anticipated to spur further activity and broaden the range of goods transported along both the North-South and East-West transport corridors.

Established during a meeting of state railway heads in Tashkent, the CASCA+ route expanded with Türkiye’s participation in December 2021. The “+” symbol indicates a willingness to accept new participants keen on utilizing the route, with long-term aspirations to link Southeast Asian states, particularly China, with Europe.

The EU, in turn, closely monitors developments in Central Asia, clearly realizing that most freight traffic from East to West will continue to go along the Northern Route through Russia. Therefore, Europe focuses on expanding the TITR, projected to transport up to 120,000 containers annually.

Economic circumstances are driving rapid developments in the region’s freight transportation sector. Experts attribute a 2-3-fold increase in the Central Asian freight market over the past year to the rising transit significance of Kazakhstan, the Kyrgyz Republic, and Uzbekistan within global trade networks.

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