RLL Container Report - 29 March 2017
From: John Keir, Ross Learmont Ltd. Email: john.keir@telia.com Date: 29 March 2017
A Standard approach to an ancient intermodal route.
Kazakhstan is the latest country to take advantage of the opening of the rail line from Iran via Azerbaijan and Georgia to Turkey and from there on to Europe. It is reckoned that by 2020, the Kazakhs could be moving up to 300,000 teu through the Caspian Sea port of Kurik to Azerbaijan and from there along the Caucasian rail corridor to Turkey. By the end of this year, the new Caspian port is scheduled to be up and running which will allow the Kazakhs to tap into a large potential traffic flow. It is estimated that the 15 most westerly provinces in China could generate an annual flow of 800,000 teu to Europe. This cargo flow could be switched from the longer deep-sea routes to the shorter and faster overland rail option.
Kazakhstan is the latest country to take advantage of the opening of the rail line from Iran via Azerbaijan and Georgia to Turkey and from there on to Europe. It is reckoned that by 2020, the Kazakhs could be moving up to 300,000 teu through the Caspian Sea port of Kurik to Azerbaijan and from there along the Caucasian rail corridor to Turkey. By the end of this year, the new Caspian port is scheduled to be up and running which will allow the Kazakhs to tap into a large potential traffic flow. It is estimated that the 15 most westerly provinces in China could generate an annual flow of 800,000 teu to Europe. This cargo flow could be switched from the longer deep-sea routes to the shorter and faster overland rail option.
The Kazakhs are trying to entice additional transit cargo by offering attractive rates and faster transit times on the East-West routes, such as the route via the Caucasus to Turkey and from there on to the European Union. Currently, Kazakhstan is handling 100 container trains travelling on 11 different routes. It is calculated that this market has the potential to expand to two million teu by redirecting traffic to a shorter and more efficient transport corridor serving Iran, Turkey and from there via S E Europe up into the European heartland. The transit corridor via Turkey could receive a further fillip of additional volumes of containerised traffic when IRISL takes delivery of its new fleet of four mega-ships each with a capacity of 14,500 teu. These vessels will be based at Iran’s main box terminal of Bandar Abbas, which will witness a sharp upturn in box throughput, as large container vessels owned by partner lines start making regular calls at the terminal on the Persian Gulf. IRISL’s Managing Director, Mohammad Saeidi indicated last year that the shipping line has ambitious plans to order 579,000 teu of additional capacity.
Much of this extra cargo flow could be generated by India, which views Iran as an ideal transit country for its goods to both Russia and to the CIS, as well as cargoes to Turkey and the European Union. Currently, India’s population is 1.34 Billion and is increasing at the rate of 1.19 percent per annum. Its neighbour, Pakistan will shortly break the 200 million mark and it too is looking to access the Iranian rail network in order to give Pakistani exporters a faster transit corridor to both the EU and to the countries of the Commonwealth of Independent States. At the same time, East African tea exports to Iran are expected to jump more than six fold by 2019, as trade ties with the Persian Gulf nation normalise after western sanctions were lifted. Shipments from major producers, including Kenya, the world’s biggest exporter of black tea, may climb to 20,000 metric tons within the next four years. That is an impressive turnaround from the record low of 3,200 tons last year.
The government in Teheran has set the country on a path of political reform, which involves opening Iran up to its neighbours by restoring long-neglected transport links. In so doing, the politicians are acknowledging Iran’s role as a natural crossroads dating back to the 5th century BC, when King Darius built the Persian Royal Road. By opening the country’s many border crossings, Iran is reverting to Persia’s historic role at the centre of an enlarged trade zone.
John Keir, Ross Learmont Ltd.
29 March 2017
Copyright ©, 2017, John Keir