Combining rail and sea: Russia develops new opportunities on North-South Corridor

2022/02/09 at 8:40 AM

Despite being a key transit country on the New Silk Road, Russia is also paying particular attention to other transport arteries, including the North-South Corridor. On the one hand, it extends rail freight services towards Iran and, on the other hand, creates conditions for moving more containers via the Caspian Sea. What exactly will be implemented in the coming years?

“It’s a profitable direction in terms of timing and economics compared to the Suez Canal, especially for the transport and transhipment of grain, fruit, chemical and petrochemical products,” that’s how RZD Logistics, a dedicated subsidiary of Russian Railways (RZD) explains its interest to the North-South Corridor. In 2021 the company successfully arranged a new intermodal connection from Russia to Uzbekistan, which is devoted to transporting agriculture products. Now, it’s a turn of the Caucasian region to join a similar service.

Container train in Russia, source: Russian Railways (RZD)

Intermodal for fruits

This is about the Agroexpress container trains, a fast intermodal service that was developed by RZD Logistics for moving agriculture and food products. It is popular among the Russian shippers for both domestic and international transport, mainly from Russia to China and a little bit to Uzbekistan. Soon, the international network of the Agroexpress trains will be extended to Azerbaijan. In December 2021, RZD Logistics established a partnership with Alliance Logistics, the Baku-based freight forwarder of Azerbaijan Railways. It includes the arrangement of a new container train within the Agroexpress service between Russia and Azerbaijan. Both parties are regarding the possibility to launch a new train between Sumqayit, northward from Baku, to Rostov-on-Don and Moscow.

According to the Russian export centre (REC), the new service can be commenced with two trains per month. “Grain, vegetable oil and confectionery will be exported from Russia and fresh vegetables and fruits from Azerbaijan. The successful start of the project will also increase the volume of exports along the routes of the North-South international transport corridor by connecting supplies of agricultural products from neighbouring countries to the route,” said Veronika Nikishina, director-general of the REC.

Currently, RZD Logistics and Alliance Logistics are discussing various issues related to the new intermodal between the two countries. They have adjusted the rates for transporting agriculture products in containers and covered goods wagons. Both companies are planning to finish this year with a cargo turnover of 60,000 TEU. This amount can be increased up to 100,000 TEU by 2025.

Port of Olya in the estuary of the Volga, source: Port of Olya

New container maritime terminal

Besides developing the container trains on the North-South Corridor, Russia is also focused on increasing the transit potential of its Caspian ports. To this end, a new container maritime terminal in the Port of Olya, which is located in the estuary of the Volga river, will be constructed. The government of the Astrakhan region plans to make the port a major hub on the North-South Corridor, namely between the Caspian and Baltic seas due to the inland connection via the Volga-Baltic Canal and the Moscow Canal.

“Today our task is to technically equip and accompany the saturation of the port with cargo. It is necessary to equip a container terminal in the port of Olya. It will be equipped in two stages: by the end of 2023, we must ensure the transhipment of goods in the amount of 3 million tonnes, by the end of 2030 in the amount of 8 million tonnes. This is the problem that we intend to solve in the first place. The volume of proposed investments is 34 billion rubles (around 396.5 million euros),” said Igor Babushkin, the governor of the Astrakhan region.

Meanwhile, there is another important and costly issue related to the development of the Port of Olya. It is the depth of the Volga-Baltic Canal. Most of the route has a draft of 3.6 metres except the 60-kilometre-long section near Nizhny Novgorod. As a result, an additional transhipment is required to move containers by barges is required. The dredging works could be a solution. However, they will cost too much compared to the possible benefits. What option will win: strategic development or money-saving policy?

Related stories:

  1. Russia plans new alternative multimodal corridor to Suez Canal
  2. Faster alternative to Suez Canal: five principle facts about North-South Corridor
  3. P&O Maritime Logistics tests river-sea line between Turkey and Central Asia

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