A second transit train from Russia has arrived in Iran across the northeastern Sarakhs rail border, the head of the Islamic Republic of Iran Railways announced.
“The train with 37 wagons is carrying chemical fertilizers. Its final destinations are Indian and South African ports,” Miad Salehi was also quoted as saying by Mehr News Agency.
Starting from Russia, the train travelled more than 4,000 kilometers through Kazakhstan and Turkmenistan to reach Sarakhs in Khorasan Razavi Province.
“The train will now travel about 1,600 kilometers along the International North-South Transportation Corridor to reach the Shahid Rajaee Port in Bandar Abbas, from where the cargo will be shipped to their final destinations,” he said.
Iran and Russia have agreed on a plan to transit 10 million tons of goods along the International North-South Transportation Corridor.
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 had planned to connect to those of Azerbaijan and Russia.
The corridor, which will connect Iran with Russia’s Baltic ports and give Russia rail connectivity to both the Persian Gulf and the Indian rail network, was high on the agenda of Iran’s Minister of Roads and Urban Development Rostam Qasemi during his recent visit to Moscow.
With the operationalization of the corridor, goods could be carried from Mumbai to the Iranian port of Bandar Abbas and further to Baku. They could then pass across the Russian border into Astrakhan before proceeding to Moscow and St. Petersburg, before entering Europe.
INSTC substantially cuts the travel time for everything from Asian consumer goods to Central Eurasia’s natural resources to advanced European exports.
First Cargo Transit Under eTIR Carnets
The first transit shipment under eTIR carnets (TIR Convention) has been successfully accomplished along the International North-South Transportation Corridor, an Iranian customs official announced earlier.
“The transit shipment included industrial alcohol weighing 21,970 kg worth $82,000. It was declared to the customs terminal at Shahid Rajaee Port [in the south] by India and sent in one container to Russia from Astara customs terminal [in the north],” Hossein Saeedi, a Shahid Rajaee customs official, said.
Shahid Rajaee is Iran’s biggest container port.
“Transit documents and carnets used to be sent manually to the customs office and transportation companies, which process used to take two to three weeks. But now all documents are being sent to customs online in one day. Electronic TIR procedure will facilitate transit procedures, help the development of the north-south corridor, promote the electronic exchange of information between countries and trade,” he was quoted as saying by IRIB News.
eTIR system allows the two countries to have access to all related information at any time and view the information of cargo before delivery, which is useful for both sides and lowers the risk of deception, accelerates customs formalities and reduces costs. TIR Convention is a multilateral treaty concluded in Geneva, Switzerland, on Nov. 14, 1975, to simplify and harmonize the administrative formalities of international road transport.
“So far, no TIR carnets project has been carried out by the two companies,” said Behnam Faramarzian, the head of International Transportation and TIR Carnet Department of Iran Chamber of Commerce, Industries, Mines and Agriculture.
“Generally, only one company conducts TIR carnet projects. The transfer of goods from India to Iran to Russia was carried out by two companies, one Indian and the other Iranian.”
“This method accelerates customs procedures and the time needed to transfer goods from the point of origin to the destination. This pilot project has been successful so far; if it produces desirable results it can help promote transit through Iran. Iran has the necessary infrastructure to implement this project. We are ready to carry out this project again if other countries are willing to cooperate and have the needed equipment,” he was quoted as saying by Otaghiranonline.ir.
IRISL Sets Record
The Islamic Republic of Iran Shipping Line Group has set a record in goods shipment along the International North-South Transportation Corridor.
IRISL moved 27,500 TEUs weighing 337,000 tons along the corridor over the first four months of the current Iranian year (started March 21), IRNA reported recently.
The report noted that there were only two transit routes defined among the ports of India, the UAE and Russia at the outset of the INSTC project, adding that the number of routes has increased to 14, covering different ports of the world over the last two months.
According to IRISL, countries of the Commonwealth of Independent States and Russia are the main transit destinations from the shipping points and the goods will be delivered to owners door-to-door, using the group’s facilities.
IRISL says it has focused on the multimodal transportation of goods as one of its main strategies.
A total of 18,462 tons of goods worth $9.6 million were exported from Iran to Russia through a new trial customs corridor, the head of the Islamic Republic of Iran Customs Administration said earlier this month.
“The shipments were transported from Iran to Russia between June 30 and Aug. 22 using 1,199 waybills,” Alireza Moqaddesi was also quoted as saying by ILNA, noting that the project is entitled to simplified and facilitated customs procedures.
Exports accounted for 46% and 18.1% of the weight and value of Iran’s total fruit and vegetable exports during the period respectively.
Russia-Ukraine Conflict Gives Impetus to INSTC
The conflict between Ukraine and Russia, together with Iran’s unique geopolitical location, has paved the way for the revival of INSTC.
The conflict has resulted in an unexpected increase in trade flows east, with one of the beneficiaries being Iran. This is because 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 multimodal 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, in 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 current 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 reorientation 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, a senior fellow at the American University of Moscow and a BRI expert for The Cradle. He added:
“Among the top strategic focuses of this reorientation is the long overdue International North-South Transportation Corridor. On this game-changing mega-project, Putin said 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 railroads, transshipment 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 start growing steadily in the near future.”
