The Middle Corridor: Europeans tend to look at it with skepticism, whereas the Chinese celebrate each newly launched train. In between them are the Central Asian countries, such as Uzbekistan. National Uzbek rail freight forwarder Oʻztemiryoʻlkonteyner (UTK) sheds some light on the country’s positioning in international trade and which role the company plays in that strategy.
From a European perspective, the Middle Corridor primarily serves one goal: to secure Chinese imports via an overland route that bypasses Russia. Of course, we would say, there are the transit countries, such as Kazakhstan, Azerbaijan and Georgia, but those mostly seek to make money on transit charges.
Or is there more at play for countries along the Middle Corridor? Located just south of Kazakhstan, Uzbekistan also aims to be part of the cross-Eurasia international trade frenzy. It is rarely seen as a core part of the China-Europe route, since freight can just transit Kazakhstan and pass the entire Central Asian part of the corridor in that way.
Still, Uzbekistan takes a different perspective. Oʻztemiryoʻlkonteyner, the freight forwarding subsidiary of Uzbekistan Railways, explains to RailFreight.com that “Uzbekistan is not merely a transit country within this network; it is steadily positioning itself as an important regional hub.”
Diversification is the strategy
The Middle Corridor provides opportunities for local businesses towards Europe and China. Both directions remain “vital” for Uzbekistan’s trade strategy and regional connectivity, says Mirziyod Mirkhamidov, Chairman of the Board at UTK.
“Our national strategy focuses on diversification of transit routes to ensure resilience and efficiency in regional trade. The objective is to reduce dependence on any single corridor, such as the traditional northern route via Russia, and to enhance the competitiveness of the Middle and Southern corridors”, Mirkhamidov adds.
For Uzbekistan, the Middle Corridor (and other transport corridors) are strategic assets to reduce economic risk. That does not mean that transit income is completely out of the picture, even if Uzbekistan is not currently a key transit country. The CKU (China-Kyrgyzstan-Uzbekistan) line, once operational, will substantially shorten the distance between Western China and Uzbekistan, which may result in “some volume reorientation”.
However, adds Mirkhamidov, the CKU railway can also make Uzbekistan a key transit country between East Asia and Europe when it is completed.
The Chinese and the Europeans
The Chinese share Uzbekistan’s optimism for diversification and boosting regional trade. Companies from China “have shown particular enthusiasm” to invest in infrastructure projects, rolling stock supplies and the development of logistics centres in Uzbekistan. “China is one of Uzbekistan’s largest trade partners, and cooperation in railway logistics continues to expand”, notes Mirkhamidov.
Europe has seemingly not quite caught the same level of enthusiasm. However, adds the UTK chairman, “European companies are also paying closer attention to Uzbekistan’s transport potential, driven by the need to diversify global supply chains and establish more reliable overland connections between Asia and Europe.”
Logistics firms, port operators and investors are exploring partnerships in multimodal logistics, warehousing and digital customs systems, Mirkhamidov explains. “While European investors tend to be more cautious, interest is steadily growing as Uzbekistan improves transparency, operational reliability, and the overall investment climate.”
Working on improvements
In order to fulfill the country’s objectives and to boost the country’s trade capacity, Uzbekistan is working on a number of infrastructure projects. One of the most important is the electrification of the Bukhara–Miskin–Urgench–Khiva railway line, which should significantly improve both freight and passenger operations in the western part of the country.
Uzbekistan Railways also intends to renew its rolling stock fleet and upgrade its maintenance facilities by 2033. As for UTK, the freight forwarder is investing in new terminal infrastructure, including the construction of modern freight and logistics centers near major cities in cooperation with international companies in terminal handling and logistics. “These projects aim to increase throughput capacity and reduce congestion on existing lines”, UTK says.
The obstacles to be overcome
Yet, the development of international trade via rail is not without challenges. Border crossings are complex and customs procedures are not harmonised. Each border crossing can introduce delays, additional paperwork and technical standards, explains Mirkhamidov. Overcoming those challenges requires greater regional cooperation and more digitalised customs.
Uzbekistan is addressing infrastructure bottlenecks through targeted investments in electrification, double tracks and new signalling systems. Financing large-scale infrastructure projects poses another challenge, the UTK board chairman adds. Public-private partnerships can help close budgetary gaps, as does cooperation with international financial institutions such as the Asian Infrastructure Investment Bank (AIIB), Asian Development Bank (ADB) and the European Bank for Reconstruction and Development (EBRD).
“Finally, geopolitical uncertainties, changing trade dynamics, and environmental risks continue to influence corridor development. Uzbekistan’s approach to these risks is to maintain multiple transit options, diversify partnerships, and build strong domestic transport capacity to ensure continuity and reliability under any circumstances”, explains Mirkhamidov.