Executive Summary:
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The European Union is working with the countries along the Trans-Caspian Transport Corridor (also known as the Middle Corridor) to support infrastructure development and provide technical assistance for improving standards, digitalization, and regional interoperability.
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Disruptions along the trans-Russia northern route due to Western sanctions against Russia and the unavailability of the trans-Iran southern route have made the Middle Corridor the only viable land route between the two ends of the Eurasian continent.
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The route faces challenges such as EU-China trade tensions, regional political disputes, and reliance on external powers, which may affect its stability and long-term viability.
On October 3, Ashgabat, Turkmenistan hosted a high-level event in collaboration with the European Union, the Central Asian countries located along the Trans-Caspian Transport Corridor (also known as the Middle Corridor), the South Caucasus states, and Türkiye, as well as the major international financial institutions. The event resulted in the establishment of a Coordination Platform for the Middle Corridor. According to the European Union, the Coordination Platform will focus on promoting the transit corridor and implementing priority infrastructure projects while coordinating investments in the South Caucasus and Türkiye (Eeas.europa.eu, October 3). The European Union announced plans to launch a regional transport program in 2025 to support infrastructure development and provide technical assistance for improving standards, digitalization, and interoperability across the region (Eeas.europa.eu, October 3). The Middle Corridor is an essential route that will allow Central Asia to better access Europe without having to go through sanctioned Russia, but it still faces numerous economic, logistical, and political roadblocks in its development.
The establishment of the Coordination Platform is just one of the significant developments in the efforts to bring life to the Middle Corridor project over the past several weeks. On September 19–20, during the 8th International Silk Road Expo held in Xi’an, China, it was announced that China Railway Container Transport Corporation would join the Middle Corridor Multimodal joint venture between Kazakhstan, Azerbaijan, and Georgia (Adyexpress.az, September 23). This venture was established in October 2023 at the Astana International Financial Center to promote a “one-stop-shop” service for cargo delivery, improve transport coordination, provide transparency on tariff rates, and ensure consistent delivery times along the route (Astana Times, October 27, 2023). Experts view this development as the beginning of China’s official participation in the multinational efforts to develop the Middle Corridor, which is expected to attract more Chinese companies to use the route (Timesca.co, October 2).
Azerbaijan and Georgia are also making efforts toward this end. Georgia is building a dry port in its capital and recently attracted a $16 million investment from the United Arab Emirates for said project (Agenda.ge, October 16). The port is expected to be completed by the end of 2024 and will serve as an extension of the Batumi and Poti ports on the Black Sea. In September, Georgia and China signed a memorandum of understanding on the Development of Transport Corridors for the China-Europe Railway Express and the Middle Corridor. This document aims to further optimize the Middle Corridor through joint efforts to attract additional cargo, optimize routes, develop infrastructure, improve transport services, and strengthen cooperation in customs, transport security, and digitization (1tv.ge, September 13).
For Azerbaijan, the major project related to the Middle Corridor is currently the Zangezur corridor. Azerbaijan has almost finished the construction of a highway and completed more than 57 percent of the railway from Horadiz to Aghbend on the Azerbaijani section of the corridor (Caspiannews.com, August 23; Caliber.az, October 1). In the aforementioned Expo in Xi’an, a representative of Azerbaijan’s railway service stated that Baku anticipates that the opening of the Zangezur corridor will diversify the transit routes of the Middle Corridor, reduce delivery times for goods from China and Central Asia to Europe, and eliminate the need for multimodal transport after crossing the Caspian Sea (Adyexpress.az, September 23).
The primary motivation behind these increased efforts is the growing need for an alternative transportation route between Europe and China. Disruptions along the trans-Russia northern route due to Western sanctions against Russia and the unavailability of the trans-Iran southern route for geopolitical reasons have made the Middle Corridor the only viable land route between the two ends of the Eurasian continent. This situation has been further exacerbated by recent instability and threats to maritime routes, including those posed by Houthi rebels toward shipping in the Red Sea and rising tensions in the South China Sea.
Henrik Hololei, the Hors Classe Adviser to the Directorate-General for International Partnerships of the European Commission, reported that
40 percent of the International Maritime trade used to go via the Red Sea and Suez Canal coming from Asia. Now, none of the big international European shipping companies … use the Red Sea but rather go via the Cape of Good Hope of western coastal Africa, adding to the journey something like 12 more days on average (Inform.kz, October 16).
“This creates a situation where the Trans-Caspian transport corridor becomes highly relevant, and we can see that also in the statistics,” he added.
As time goes on, the Middle Corridor continues to see increased traffic. The Middle Corridor saw a fivefold increase in cargo from 2021 to 2023. In the first 9 months of 2024, cargo surged by 70 percent, reaching 3.4 million tons, compared to the same period in 2023 (Trend.az, October 9). The growth in the number of containers is also notable. A threefold growth was recorded in container transportation in the first nine months of 2024, compared to the same period last year (Trend.az, October 9). The transit of containers from China increased by more than 20 times during this period.
The Middle Corridor faces challenges and threats that could potentially reverse this progress and undermine current efforts and plans. These include the risk of a trade war between China and the European Union following the latter’s imposition of high tariffs on China-made electric vehicles, strained relations between the European Union and Georgia, tensions in EU-Azerbaijan relations due to friction between France and Azerbaijan, and Armenia’s refusal to open the Zangezur corridor (see EDM, October 1, 17). Experts in Central Asia have noted that while hopes for building intra-regional connectivity through international corridors are high, these large-scale projects often depend on external powers whose commitments may not be sustained in the long term (Daryo.uz, October 18).
In addition to the uncertainty surrounding future prospects for the corridor, there is a need to make transportation timelines along the route more predictable, establish uniform standards for border crossings, promote digitalization of customs procedures, and harmonize tariff systems across all countries involved in the Middle Corridor. Companies require reliable information on the timeframes for their shipments to reach their final destinations. “One day you can do it fast, maybe even … less than 15 days. Normally not, but let’s say 20 days, but the other time, it can take 40 days. Of course, for the trade route … it’s important to have a predictable time,” says Henrik Hololei (Inform.kz, October 16). The European Bank for Reconstruction and Development estimates that there is a need for an 18.5 billion ($20 billion) investment to modernize the infrastructure along the Middle Corridor (Darya.uz, October 18).
The Middle Corridor has made impressive strides in recent weeks, with the establishment of a Coordination Platform, increased Chinese involvement, and infrastructure developments in Azerbaijan and Georgia. However, geopolitical tensions, particularly with Russia, and the need for further infrastructure upgrades remain, requiring continued collaboration and investment to sustain progress.
