In Europe, the Middle Corridor is not often considered to be nothing more than an alternative transit route to and from China. However, its potential has attracted interest from Beijing and the Arab World. This might be a missed opportunity for Europe, Dr. Irina Birman, Strategic Logistics Advisor & Middle Corridor Expert, explained to RailFreight.com.
One of the main issues highlighted by Birman is that EU countries, institutions and companies show limited commitment at scale in the context of the Middle Corridor. “Europe will lose this market if it does not step up. A few big European companies are already present, such as MSC and Maersk, but it is a slow process”, she added.
‘A market in its own right’
Moreover, the European vision of the Middle Corridor is also somewhat reductive. It runs through an area that is home to almost 100 million people; it is not only a link between China and Europe, Birman argued. “I believe in these countries and their new markets. The Middle Corridor is increasingly evolving into a market in its own right”. For example, Kazakhstan, Uzbekistan, Azerbaijan and Georgia are trade partners with much untapped potential for the EU.
Other countries, especially China, are actively investing and positioning themselves as trade partners in the area. In addition to ‘foreign’ interest and investments, the countries crossed by the Middle Corridor are also strongly committed and collaborative. “Kazakhstan, Georgia and Uzbekistan are seriously developing, especially when it comes to warehouses and terminals”, Birman highlighted.
“Without international cooperation, the Middle Corridor cannot work”, she added. Georgia, for instance, will provide landlocked Uzbekistan with outlets on the sea in its Black Sea ports. What stands out even more, is that Central Asian countries are now investing in Europe. Kazakhstan Railways (KTZ), together with Chinese partners, is building an intermodal terminal near the Hungarian capital Budapest.
Far from perfect
Despite all the possibilities offered by the Middle Corridor, some issues still need to be addressed, Birman acknowledged. Container flows are not very efficient due to the disparity between eastbound and westbound volumes. Since China exports much more than it imports, empty containers pile up. Moving them back is expensive and complicated, creating a problem that still needs to be solved.
The state of the infrastructure is another obstacle in some places, Birman said. Many sections of the Middle Corridor are being or have been upgraded, but there is still quite some room for improvement. Finally, this route has a few more administrative bottlenecks compared to, say, the Northern Route. The main constraints in reaching and crossing the Middle Corridor countries are “cross-border coordination: customs, interoperability, and regulatory alignment”, she specified.
However, most of these problems are being tackled by the parties involved. “Transit times have decreased, more ferry connections are being implemented on the Caspian Sea. Moreover, investments keep coming, especially from China and the Arab world”, Birman concluded. Europe, on the other hand, continues to remain just a spectator, possibly missing out on the opportunity of positioning itself as a relevant player in the Central Asian market rather than considering only for transit. “While others are investing, Europe is still evaluating”, she concluded.