Kazakhstan is expanding its terminal network along the Middle Corridor to enhance trade connectivity and logistics. As geopolitics shift, this trade route is of utmost importance to several key global players.

The “Middle Corridor,” also known as the Trans-Caspian International Transport Route (TITR) – a multimodal trade route connecting China and Europe through Central Asia and the South Caucasus

Kazakh Transport Minister Marat Karabayev made the statement during a government meeting in late November, announcing the country’s plans to build a terminal in the European part of the route.

Terminals have already been launched in Xian (China) and the port of Poti (Georgia), while construction is underway for container hubs in Aktau in collaboration with a Chinese company and the Sarzha multifunctional terminal in the Kuryk port.

In November, Kazakhstan launched the first return container train on the Middle Corridor, marking a significant milestone for reverse logistics on this route. A train carrying 62 containers of petroleum coke departed from Baku to Xian via this route.

Transportation volumes via the Middle Corridor surged by 68 per cent in the first 10 months of 2024, reaching 3.8 million tonnes, while container traffic rose 2.7 times, with shipments from China increasing 25-fold.

Container train volume

An earlier agreement with China aims to increase container trains from 400 to 3000 annually by 2029, while the TEZ Customs system has reduced border processing times, targeting a capacity of 10 million tonnes annually.

According to Karabayev, the corridor is increasingly gaining importance amid shifting global trade routes, with an actual capacity of 10 million tonnes annually and a potential to extend to 20 million tonnes.

In July, Kazakhstan signed a roadmap with Iran, Turkmenistan, and Russia to develop the eastern route of this corridor, supported by 50 per cent tariff discounts to attract cargo.

Increasingly important route

The Middle Corridor is a key knot connecting Southeast Asia and China to Europe, traversing Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, and Türkiye before reaching the European Union countries.

Transport times via this route are reduced to 12-15 days for cargo moving between Southeast Asia, China, and Europe, from 40+ days via older truck and sea routes, enhancing reliability and safety for shipments.

Also in November, the Kazakh national railway company announced it would expand its terminal network in Europe through an intermodal cargo terminal in Budapest, jointly agreed with Hungarian and Chinese companies.

Enhancing regional connectivity

In Brussels, the Kazakh ambassador to the EU, Margulan Baimukhan, reaffirmed his country’s position as a strategic partner to the bloc in enhancing regional and global connectivity.

Highlighting the importance of establishing sustainable and efficient transport corridors in light of global challenges and disruptions in supply chains, Baimukhan said that the success of this corridor relies on coordinated actions by all countries along the route.

“Kazakhstan aims not only to be a transit hub but also an active participant in global efforts to enhance resilience and connectivity. We are ready for constructive dialogue and deeper cooperation with the EU,” the ambassador stated.

Earlier this year, the EU pledged €10 billion in investments for the Middle Corridor, which has become a priority not only for Kazakhstan and the Central Asia region but also for the bloc in diversifying trade routes following the Russian invasion of Ukraine.

Despite growing interest and ambitions for the advancement of this route, the EU has been urged to step up efforts and increase engagement to secure its position in a region where China and Russia reign supreme.

Potential and competition

China has moved on from its initial hesitation in this trade route. From 2013 to 2022, it had limited engagement with the Middle Corridor due to political considerations, economic disincentives, security risks and technical challenges.

Before 2022, some 90 per cent of the EU-China land-based trade passed through Russia, highlighting Moscow’s dominance in the region and the EU’s preference for the Northern Corridor.

The situation shifted after the Russia-Ukraine war and sanctions on Moscow, which disrupted the Northern Corridor, reducing its viability for EU-China trade. Maritime disruptions in the Red Sea further underscored the need for alternative routes.

China’s renewed engagement in the Middle Corridor has brought several agreements signed with Kazakhstan, as well as Azerbaijan and Georgia, to enhance infrastructure, reduce tariffs, and boost trade volumes.

EU-China trade route

The corridor now serves as a key route for China’s trade with the EU, reducing dependence on Russian and traditional maritime routes. It also enhances China’s economic influence in Central Asia and the Caucasus while fostering regional stability.

Geopolitical shifts have positioned the Middle Corridor as a stable and reliable alternative, aligning China’s economic resilience with its strategic objectives in Eurasia. It not only provides Beijing access to Europe but also to the Middle East.

The development of the Middle Corridor has the potential to transform the economic and geopolitical landscape of Eurasia, with significant implications for global trade flows and regional power structures.

China’s changed approach to the corridor and Europe’s rediscovery of the importance of this route and Central Asia make for an interesting competition to behold. It could well be a win-win situation for all.

[Edited By Brian Maguire | Euractiv’s Advocacy Lab ]