The New Boom in Cargo Transportation through the Middle Corridor

In the first half of 2024, the volume of cargo transported through the Trans-Caspian International Transport Route (TITR), also known as the Middle Corridor, increased 14-fold compared to the same period last year. This growth underscores the expanding role of the Middle Corridor in the global logistics and transportation sector. The route facilitates cargo transportation from China through Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, and then onwards to Turkey and European countries. The Baku-Tbilisi-Kars railway is also an essential part of the Middle Corridor, aiding in the fast delivery of goods from Asia to Europe.

The Middle Corridor has been attracting global attention in recent years due to its increasing importance in reducing both the time and cost of transporting goods from China to Europe. In 2023, the volume of cargo transported via this route reached 2.7 million tons, which was 65% higher than in 2022. These figures highlight the corridor’s growing significance in global logistics, particularly as geopolitical situations make traditional routes more complicated and expensive.

According to Kazakhstan’s national railway data, the delivery time from Kazakhstan to Baku has decreased to nine days, while delivery to the ports of Poti and Batumi takes around 12 days. This is followed by transport from Poti and Batumi to Constanța, which takes approximately 20-22 days. This reduction in time significantly enhances the competitiveness of the Middle Corridor compared to other global transport routes, facilitating faster transit of goods from Asia to Europe. Reduced delivery times and improved infrastructure play a crucial role in increasing the international appeal of the corridor. Factors Driving the Popularity of the Middle Corridor:

Geopolitical Situation: The ongoing conflict in Ukraine and economic sanctions imposed on Russia have significantly impacted the attractiveness of traditional northern routes, prompting many companies to opt for the Middle Corridor. Geopolitical risks and sanctions have increased the importance of alternative routes, making the Middle Corridor an ideal solution for companies seeking stability and security.

EU Strategic Initiatives: The European Union actively supports the development of alternative transport routes to reduce dependency on Russia and create new trade pathways. The Middle Corridor aligns with this objective, and EU initiatives provide financial and technical support to enhance the corridor’s role in the global logistics network. This support offers Georgia significant opportunities for economic development and expansion of international trade relations.

Reduction of Logistics Time and Costs: Recent improvements in infrastructure and optimization of processes along the Middle Corridor have significantly reduced both time and costs, making the cargo transportation process more efficient and accessible. Improved infrastructure and the use of technology allow logistics operators to transport goods more quickly and safely, thereby increasing the competitiveness of the route. Such improvements not only reduce transit times but also help save costs, enhancing the corridor’s attractiveness.

In recent years, several important changes have taken place in global logistics and freight transportation. One major trend is the development of new transport routes and the search for alternatives to traditional pathways, driven by both geopolitical changes and technological advancements. Additionally, there is a growing demand for fast, reliable, and affordable transport routes that increase competitiveness.

Search for New Routes and Diversification of Transport: Many countries and logistics companies are actively working on finding new, more efficient transport routes that simplify freight transit and improve reliability. The conflict in Ukraine and China’s “Belt and Road” initiative have contributed to the development of new routes within the global transport network. The Middle Corridor is part of this trend, facilitating transcontinental freight transport and creating new commercial opportunities. Diversification also helps importing and exporting countries reduce risks, enhancing the resilience of supply chains.

Use of Technology in Logistics: One of the main trends in global logistics is the integration of technology, which optimizes and ensures transparency in the freight transport process. Transport companies use artificial intelligence and blockchain technology to improve logistics chain management and communication between all parties involved in cargo transportation. Technology plays a crucial role in the development of the Middle Corridor by enabling monitoring of goods movement and increasing reliability. Technological innovations maximize the efficiency of the route and strengthen its competitiveness. Integrating artificial intelligence into the logistics network allows for better anticipation of freight movement and timely decision-making.

Growth of Containerization: Containerization is one of the key directions in global logistics that simplifies the freight transport process and helps reduce costs. The Middle Corridor, as one of the main routes for containerized cargo, increases efficiency and reduces the risk of damage to goods. The growth of containerization brings more flexibility to the freight transportation process, making it more efficient and faster, ultimately enhancing the competitiveness of the route. Moreover, the standardization and use of containers facilitate the transport of various types of goods and create favorable conditions for both sellers and buyers.

Georgia plays a central role in the Middle Corridor, as its geographical location provides strategic importance for freight transit from Asia to Europe. Georgia serves as a bridge connecting East and West, and improving its infrastructure could further increase the volume of cargo transported. Georgian ports, such as Poti and Batumi, are important hubs for cargo transit, ensuring the smooth operation of the Middle Corridor. Modernizing these ports and increasing their capacity will provide Georgia with even more opportunities to enhance its role in the transport network.

The Baku-Tbilisi-Kars railway project and the ports of Poti and Batumi play a significant role in the development of the Middle Corridor. Utilizing this corridor simplifies the movement of cargo, reduces delivery times, and promotes regional economic development. The 14-fold increase in cargo volume transported via TITR indicates that the Middle Corridor is becoming increasingly important for both regional and global logistics. Georgia has the potential to enhance its role as a regional hub, contributing to economic development and strengthening its international position. Moreover, new government incentives and attracting investments will further support Georgia’s strategic role.

The increase in cargo volume through the Middle Corridor highlights its growing strategic role in the global logistics network. Reducing delivery times and costs for transporting goods from Kazakhstan to Baku and further through Georgia to Europe makes this route more competitive, prompting more companies to use it. Improvements in the cargo delivery process and increased competitiveness of the route mean that the Middle Corridor is becoming one of the main transcontinental routes. This route not only reduces transportation costs but also ensures the creation of more efficient logistics processes, ultimately contributing to the development of global trade relations.

In the coming years, the volume of cargo transported through the Middle Corridor is expected to increase significantly. Experts predict that by 2025, the volume of cargo transported via this route could reach 5 million tons, indicating the region’s growing economic and logistical potential. For Georgia, this means opportunities for economic growth and the creation of new jobs in logistics, transport, and service sectors. Additionally, Georgia can strengthen its position in international markets and more actively participate in global trade networks. The development of the route and the increase in cargo volume will also help create new investment opportunities, further boosting the country’s economy.

It is important for Georgia to continue improving infrastructure, utilizing technological innovations, and fostering international cooperation to fully realize the potential of the Middle Corridor. This requires active participation and investment from both the public and private sectors, ultimately contributing to strengthening Georgia’s economic and strategic role in the global transport network. Georgia has the potential to become a major logistics hub, and achieving this goal requires a sustainable strategy that encompasses infrastructure development, human resource advancement, and the adoption of new technologies. Strengthening regional and international partnerships is also essential, as it will further enhance the competitiveness of the corridor and Georgia’s role in the global economy.