In a significant development, a freight train loaded with 36 containers traveled directly from Russia to Saudi Arabia through an Iranian transport corridor. This marks the first time that transit cargo from Russia has used the Incheh Borun rail border near Turkmenistan, making its way to the port city of Bandar Abbas on the Strait of Hormuz, before reaching Jeddah, Saudi Arabia’s largest port city.
A New Regional Supply Chain Emerges
This achievement is a milestone in establishing new regional supply chains, linking Russia directly to the Middle East. The train journey began at Russia’s Chelyabinsk freight station on June 21st, passing through Kazakhstan, Turkmenistan, and Iran. Not only does this route reduce delivery times by several days, but it is also more cost-effective compared to the traditional maritime route via the Suez Canal. Additionally, it significantly lowers customs tariffs for Russian goods exported to Saudi Arabia.
The International North-South Transport Corridor (INSTC)
This successful transit is part of the broader International North-South Transport Corridor (INSTC), often touted as an alternative to the Suez Canal. The INSTC encompasses a 7,200km multi-modal transit system connecting shipping, rail, and road routes. It facilitates the movement of cargo between Russia, Iran, Azerbaijan, India, and Central Asia.
Rapid Growth and Ambitious Plans
The INSTC has been experiencing rapid growth. In 2022, a total cargo flow of 14.5 million tons was recorded, and projections for this year suggest an increase to 17.6 million tons, according to Russia’s Transport Ministry. Moscow has repeatedly proposed that the INSTC could eventually replace the Suez Canal, the vital waterway responsible for about 12% of global trade.
Russia's Expanding Vision
President Vladimir Putin has expressed Russia's ambitious vision for the INSTC. Plans include ensuring comprehensive connectivity along the corridor and establishing regular freight shipping lines. Furthermore, there are discussions about setting up a logistics hub for the corridor on the African coast. Notably, in 2018, Russia and Eritrea announced intentions to build a logistics center in Massawa port city, while Ethiopia has recently joined the BRICS, further indicating the corridor's potential for transforming global trade routes.
This successful transit freight train journey highlights the evolving dynamics of international trade, with Russia playing a pivotal role in creating more efficient and cost-effective transport routes between Europe and the Middle East.
