Joint Azerbaijan, Iranian Logistics Operator Proposed For Western INSTC Routes To Russia And Europe

Russia, a key stakeholder along with Iran and India in developing the International North-South Transportation Corridor (INSTC), has has invited Azerbaijan and Iran to jointly create a logistics operator for the western route of the International North-South Transport Corridor (INSTC).

Russia’s First Deputy Prime Minister. Andrei Belousov made the suggestion at the 15th Verona Eurasian Economic Forum on Friday (October 28).

Belousov said that “The historically established transport infrastructure of Russia and other countries, which was primarily formed on the basis of the principle of parallels, on the East-West horizon, is already ceasing to meet the global trends and the realities we are facing. The meridian route, the North-South route is starting to play a key role.”

The North-South route, with its access to the Persian Gulf states, India, China, and Africa, could become an actual competitor to the Suez Canal in the future, he said.

“The development of the corridor today depends to a decisive degree on Russia’s interaction with Azerbaijan and our interactions with Iran. We expect that the amount of Russian cargo via all three arms of the INSTC will increase nearly twofold by 2030 from the current 17 to 30 million tonnes. But we see the main prospect, which will account for more than half of the growth, first and foremost in the western route via Azerbaijan,” the deputy prime minister said.

“We would like to invite you to consider the possibility of creating a joint operator from the three countries, Russia, Azerbaijan, and Iran, along the entire western route to ensure end-to-end transport service and a high level of logistical services,” he said, using the United Transport and Logistics Company operator created by Russian Railways in cooperation with the national railway companies of Kazakhstan and Belarus as an example.

“Russia proposes considering the possibility of launching such service taking into account that the operator would also perform shipping functions, contract for transportation, transhipment in sea ports, and provide customs and other support to transportation,” Belousov said.

The volume of cargo from Russia along the North-South corridor should double by 2030 and amount to 32 million tons , while the Russian side sees the main prospect in the western route passing through Azerbaijan, Belousov noted.

He added that the goal should be to ensure by 2030 the carrying capacity of the western route of the North-South corridor with all cargo from the current 9 million tons to a level of at least 15 million tons of cargo . These figures are achievable, Belousov said: in the first nine months of 2022, foreign trade transportation between Russia and Azerbaijan by rail amounted to 5.4 million tons, 57% higher than the same period in 2021.

Russian Deputy Transport Minister Valentin Ivanov, for his part, noted, that in relation to the railway infrastructure, the ministry believes it would be feasible to create a joint logistical operator “so that all issues dealing with transit via the territories of Azerbaijan, Iran and Russia could be addressed based on the principles of all services in one place and resolved promptly and at high standards without any delays for shippers’ convenience,” he said.

“We believe that the creation of this logistical operator needs to be reflected in our trilateral intergovernmental agreement. We’re already working on it with our colleagues from Azerbaijan and have drafted a concept of the trilateral agreement with Iran, and we’re coordinating it,” he said.

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