News / Overland opportunities surge in central Asia as Kazakhstan becomes key

08/09/2023

Amid Russia’s sanction-induced reorientation of its supply chains and the conflict in Ukraine, central Asian countries have seen surging overland opportunities.

Reporting on its first half performance, Kazakhstan’s KTZ Rail said volumes had increased by a whopping 86% year on year, as shippers sought alternative connections between China and Europe, with exports up 250%.

Much of the growth has been driven by a remodelling of supply chains from Russia towards the Middle Corridor.

Described by Kazakh president Kassym-Jomart Tokayev as the world’s “main connecting link”, it joins China, Central Asia and Europe via the Caspian Sea, South Caucasus and Turkey.

Indeed, this week China and Kazakhstan entered into an agreement that would see 26.8m tonnes travel through the corridor, increasing to 27.8m tonnes next year.

Alongside bolstering Asia-Europe connectivity, the deal is also expected to cement further gains in Kazakhstan’s export economy, with a spokesperson for the rail operator suggesting it would generate a 25% bounce this year alone.

Recent rail successes along the route are also leading to growth in other overland services, with Ceva launching a new China-Kyrgyzstan-Uzbekistan trucking connection.

MD of Greater China Joanna Zhu said: “We are expecting more regular TIR operations on this new route with around 100 trucks every month.

“We will continue to optimise ground and rail product portfolios to open direct routes while strengthening intermodal capabilities. We will develop more tradelanes from China to the west and enhance trade resilience along the corridor.”

TIR, or International Road Transport, is a routing removing the need for customs checks at each border point and is seen by the IRU as essential in reducing delays. Its chief representative of East and South-east Asia, Yan Zhou, described the Ceva route as of “strategic importance”.

But Ceva is also keeping a firm eye on the rail developments, including the China-Kyrgyzstan-Uzbekistan rail project due for completion in 2025, creating the shortest link between the Asian giant and both Europe and the Middle East.