The Islamic Republic of Iran Shipping Lines has transported 3,000 tons of goods and 114 TEUs of containers along the International North-South Transportation Corridor (INSTC) from May 22 to July 23, the state-owned transportation giant has announced.
IRISL uses its fleet to transport goods from Central Asia along the corridor to Iran’s Caspian ports. From there, it carries the shipments via rail and road to Iran’s southern ports, IRNA reported.
The shipping group has assigned 300 containers to transport goods between Russia and India, and if the demand increases, the number of these containers will increase continuously.
IRISL has moved to extend its network by facilitating the transport of Russian goods to India via the INSTC, a land-sea corridor passing through a dozen countries to bypass Western sanctions against Russia.
The corridor entered the operational phase after completing a trial phase in June when containers of wood laminate sheets departed from St. Petersburg toward Nhava Sheva Port in India.
The cargo arrived in India last month after traveling from Astrakhan Port in southern Russia to the Iranian ports of Anzali on the Caspian Sea and Bandar Abbas on the Persian Gulf.
The establishment of INSTC, the multi-modal network of ships, rail, and roads for moving freight between Eastern Europe and South Asia, was first introduced in September 2000. Due to geopolitical obstacles, interest in the route waned over time, but it has been reintroduced following the conflict in Ukraine, according to splash247.com.
Iran and Russia have agreed on details of their plan to transit 10 million tons of goods along the IINSTC, the news portal of the Ministry of Roads and Urban Development of Iran reported recently.
The agreement was made during a meeting of the two side’s transportation officials in Moscow on June 28 and 29.
The Iranian side was led by deputy minister of roads and urban development in transportation Shahriyar Afandizadeh. He was accompanied by deputies and managers from Iran’s Civil Aviation Organization, Ports and Maritime Organization, and Construction and Development of Transportation Infrastructures Company as well as representatives of private sector in marine and road transportation.
The Russian side was led by Dmitry Zverev deputy transport minister.
Afandizadeh and his Russian counterpart signed a protocol for their agreement.
Cost, Time-Effective
INSTC is a major transit route designed to facilitate the transportation of goods from Mumbai in India to Helsinki in Finland, using Iranian ports and railroads, which the Islamic Republic plans to connect to those of Azerbaijan and Russia. It connects Iran with Russia’s Baltic ports and give Russia rail connectivity to both the Persian Gulf and the Indian rail network.
Goods can be carried along INSTC from Mumbai to the Iranian port of Bandar Abbas and further to Baku. They can then pass across the Russian border into Astrakhan before proceeding to Moscow and St. Petersburg, before entering Europe.
Transit time via the Black Sea and Suez Canal takes between 45 to 60 days as distance through these two routes is about 14,000 kilometers.
Transit time via INSTC is 14 to 15 days and the corridor is 7,200-kilometer long.
A year ago, after the Suez Canal was closed for six days as a result of a container ship blocking the waterway, Iran and Russia met to stress the importance of accelerating the completion of INSTC as an alternative to the Egyptian canal, reads an article published by London-based Arabic newspaper Al-Quds Al-Arabi.
Russia-Ukraine Conflict’s Impact
The conflict between Ukraine and Russia together with Iran’s unique geopolitical location have paved the way for the revival of this international route.
The conflict has resulted in unexpected increases in trade flows east, with one of the beneficiaries being Iran. This is because the INSTC, originally intended as a link to boost India-Iran trade, has now become a key part of the far wider Southern Route between Europe and Asia as the EU’s Northern border with Russia remains closed, according to Silk Road Briefing.
The INSTC runs north-south across Iran and connects the Caspian Sea to the Persian Gulf allowing European goods transit east from the EU’s southern ports in Italy and Greece, in addition to the Bulgarian and Romanian Black Sea ports access via Turkey and Georgia to Azerbaijan’s Port at Baku. From there, Iran’s INSTC route takes them south and to markets in East Africa, the Middle East, Pakistan, India, and South Asia.
At present, the Iranian INSTC is a multi-modal road-rail connection, however rail construction is continuing and should be fully completed next year. This is having a significant impact in how Iran is now being seen as a vital link between Europe and Asia.
Washington would prefer not to see any Iranian international trade or the facilitation of this, whereas Europe needs this access route to Asia following Russian sanctions. At some point, the United States is going to make a call whether attaching the European Union to its own North American supply chains is more desirable than allowing Iranian trade to flourish.
The big attraction of INSTC is its key hub, namely Iran’s sole oceanic port, Chabahar, on the Sea of Oman opening out into the wider Indian Ocean. INSTC was also presented as a transit option via Russia offering routes running from and to European ports, including Helsinki. But, given events, it has now become a key part of the Southern Route running between Europe and Asia, according to bne IntelliNews.
Since the inevitable cancellation of western trade with Russia after the Ukraine conflict erupted in February, Putin has increasingly made clear that the strategic re-orientation of Moscow’s economic ties from east to west had to make a dramatically new emphasis on north to south and north to east relations not only for Russia’s survival, but for the survival of all Eurasia, wrote Matthew Ehret, senior fellow at the American University of Moscow, and BRI Expert for The Cradle. He added:
Among the top strategic focuses of this re-orientation is the long overdue International North-South Transportation Corridor. On this game-changing mega-project, Putin said last month during the plenary session of the 25th St Petersburg International Economic Forum: “To help companies from other countries develop logistical and cooperation ties, we are working to improve transport corridors, increase the capacity of railways, trans-shipment capacity at ports in the Arctic, and in the eastern, southern and other parts of the country, including in the Azov-Black Sea and Caspian basins – they will become the most important section of the North-South Corridor, which will provide stable connectivity with the Middle East and Southern Asia. We expect freight traffic along this route to begin growing steadily in the near future.”
