CARGO CAJOLING

Azerbaijan 2016 | TRANSPORT | FOCUS: GREEN CORRIDORS

Azerbaijan is creating green corridors to facilitate an increase in cargo transportation, part of country-wide transportation initiatives.

Azerbaijan has taken many steps to increase the industrial output of the country. With 2015 being declared as the Year of Agriculture, the level of agricultural production has increased as well, prompting the transportation entities of Azerbaijan to keep pace with growing demand. One of the ways the country is facilitating a higher level of industrial and agricultural transport is through the creation of green corridor deals with neighboring countries, such as Russia and Kazakhstan. These agreements are meant to ease restrictions and streamline the passage of goods across the border. These green corridors are focused on the transportation of perishable goods and processed products.

The creation of this green corridor with Russia came after it placed an embargo on European and American agricultural goods in the face of international sanctions. As a result, Russia called on Azerbaijan to meet their agricultural demands. Due to the fact that fruit and vegetables are highly perishable agricultural items, it was necessary to create an expedient process to transport them across state borders. Thus, a green corridor deal was made between the two countries and agricultural exports to Russia have more than doubled. A similar plan to establish a green corridor agreement is now underway between Kazakhstan and Azerbaijan. This agreement is growing in importance, as Kazakhstan's Aktau Port continues to expand and develop into a major regional transport player. This is especially relevant due to Azerbaijani holding company Azersun, which is building a logistics terminal near Aktau Port. This 8,730sqm project will consist of a terminal outfitted with enough refrigerated storage volume for 10,000 metric tons of agricultural products. Of this, 2,500 tons of the space is designed to accommodate fruits and vegetables. This impressive project will make future cargo transport agreements with Kazakhstan all but certain, as the new Azersun logistics terminal will increase both agricultural and other exports from Azerbaijan to the country. With the non-oil sector of Azerbaijan looking for ways to expand in the international market, logistics projects and cargo transportation directives are an easy and smart way to accomplish growth. As Azerbaijan is likely to further increase its industrial and agricultural output, the benefits reaped by these advancements would be lost on a country with an inadequate or inefficient transport regime. By reinforcing their position on this issue and creating a better environment for cargo transport, Azerbaijan is showing that it is not only cognizant of the potential benefits available, but that it is also proactive in its realization.

Aiding in the development of the green corridor plans made with Russia, Azerbaijan has received over 2,200 new railroad cars from Russia since the beginning of 2015. Of these railroad cars, 204 of are grain tankers designed for transporting agricultural products. In addition, the deal with Russia included over 400 tank railway cars, 100 hopper cars, almost 3,000 trucks of various designs, and more.

The establishment of green corridors exists as part of a larger government-led mission to popularize and increase the attractiveness of the transportation sector of Azerbaijan. In a related development, Azerbaijan reduced its tariffs by 20% for the transportation of vehicles traveling from Turkey to Kazakhstan across the Caspian Sea. The plans to optimize tariffs for the transportation of cargo include rail, freight forwarding, and sea/seaport transport. In addition, Azerbaijan has created a new governmental body designed specifically to deal with the issue of increasing the attractiveness of this industry. The new Coordinating Council on transit cargo was established in October of 2015 and is responsible for regulating the procedures involved in transit of goods that travel by way of Azerbaijan. Since its inception, this Coordinating Council has been busy. It has already planned to reduce the waiting period associated with cargo transportation, increase transparency in the sector, and work to create easier procedures for cargo companies that operate via Azerbaijan. This Council's vision is to optimize the efficiency of this industry in Azerbaijan, something that will play to everyone's benefit.