News / North-south link aims to boost declining Russian rail services

Photo: © Maksim Safaniuk

Russia’s supply chain reorientation following its invasion of Ukraine continues with RZD Logistics announcing a joint-venture with partners in Kazakhstan and Turkmenistan.

The logistics arm of Russian Railways signed a memorandum of understanding with Turkmenistan Transport and Logistics Centre and Kazakhstan’s KTZ Express on Friday to operate north-south rail shipments.

“The JV will set up a logistics operator for the eastern branches of the INSTC [International North South Transport Corridor],” said a KTZ spokesperson.

“The north-south corridor for Kazakhstan is one of the key areas to expand transport services and economic ties with Iran and India. The obvious advantages are the high speed of delivery and all-weather transport,” he added.

The INSTC was formed between India, Iran and Russia more than two decades ago, but it is only recently the 7,200km rail link has become a lifeline for Russian rail operators cut off from European markets by sanctions placed on Russia.

RZD CE Dmitry Murev said: “It has proved a reliable and effective platform for enhancing exports from Moscow, and in the reverse direction”.

The Kazakhstan-Turkmenistan routing was the last link in the INSTC to be completed, in 2014, and although a 2017 Armenia-Iran concession was agreed, it has yet to be realised.

Under the joint-venture, the three operators will aim to develop competitive rates for services to Iran, India, the Middle East and Asia-Pacific, via the cross-border stations of Aksaraiskaya, Ozinki, Bolashak, Inche-Burun and Serakhs.

However, it will need to generate a significant volumes to offset what has been a crippling 12 months for Russian rail traffic.

Rail container services collapsed following sanctions in 2022, figures indicating a 15.8% year-on-year decline, with Fesco noting a 12% drop in imports, to 2.1m teu, and exports having plunged 25%, to 1.5m teu.

And, if the intention is to bolster ties with Iran, there is missing infrastructure along the Iranian stretch of the track, the link between Astara and Sarakhs still not complete.