The Trans-Caspian International Transport Route (TMTM) has been in existence as a concept for several years. But right now, amid the instability in the Strait of Hormuz and the growing demand for alternative corridors, China has stepped up investments in its infrastructure.
The route and its logic
The cargo goes from China via Kazakhstan (railway), crosses the Caspian Sea by ferry to Baku or Aktau, then through Azerbaijan to Turkey and further to Europe. The key element that was not built is the railway connection on the territory of Turkmenistan and Azerbaijan, ensuring the continuity of the route.
According to the data trans.ru The new railway will connect the two countries and become part of the Trans-Caspian route. This will take the load off the existing railway crossing through the Marmaray underwater tunnel and will be designed for both passenger and cargo transportation.
Why 20% is serious
The cost gap is formed from several factors. Firstly, the Trans-Caspian route is shorter in terms of distance for some cargo flows from China to Western Europe. Secondly, it does not require payment of the Russian railway tariff, which is one of the highest in the region. Thirdly, the delivery speed is higher in some areas due to fewer switches.
For goods from China to Western Europe via Russia, standard transit now takes 14-18 days. TMTM — 12-16 days with a well-established infrastructure. The difference is small, but combined with the price advantage, it outweighs it.
The context for Russian business
The Trans—Caspian route is a competitor to Russian transit for China—Europe cargo. But at the same time, he is creating an infrastructure that Russia can use in the opposite direction: cargo from Russia and Kazakhstan through Baku to Turkey and beyond.
For logistics companies focused on transit through Russia: price competition will increase as TMTM develops. The answer is a reduction in the transit tariff or an additional service that justifies the choice of the northern route.
