A total of 5.4 million tons of foreign goods transited from Iran’s borders during the first eight months of the current Iranian year (March 21-Nov. 21), registering an 8% rise compared with the similar period of last year, according to the head of Road Maintenance and Transportation Organization, affiliated with the Ministry of Roads and Urban Development.
“Last fiscal year [ended March 2022], the figure stood around 10 million tons,” Darioush Amani was also quoted as saying by Mehr News Agency, adding that plans are to increase it to 20 million tons per year by 2025.
Shahid Rajaee Port in the southern Hormozgan Province has the highest share of foreign transit volume in Iran. It is Iran’s biggest commercial port.
Shahid Rajaee Special Economic Zone accounts for the highest share of all goods exported from and imported to Iran.
The economic zone, which has a loading/unloading capacity of 100 million tons per year, accounts for over half of Iran's trade and about two-thirds of total freight transit through the country.
The lion’s share of Iran's containers are handled at the Shahid Rajaee Port Complex.
With 18 gantry cranes and 40 berths, Rajaee is the most advanced container port of Iran.
Launched in 1985, the port has expanded annually, such that it is currently connected to 80 ports worldwide.
The significance of this port lies in its large capacity, Persian Gulf location, container terminal, fuel bunkering, access to 24 kilometers of railroads and round-the-clock truck transportation.
Bashmaq in western Kurdestan Province, Bazargan in West Azarbaijan Province, Parvizkhan in Kermanshah Province, Bileh Savar in the northwestern Ardabil Province, Sarakhs and Lotfabad in the northwestern Khorasan Razavi Province, Jolfa in East Azarbaijan Province, Bandar Lengeh in Hormozgan Province and Astara in the northern Gilan Province are other major transit gateways in Iran.
The active utilization of the International North-South Transportation Corridor (INSTC), the Islamabad-Tehran-Istanbul Corridor (ITI-ECO) and the Kazakhstan-Turkmenistan-Iran (KTI) Transit Corridor, in addition to the implementation of the eTIR international system have been cited as the reasons for the growing transit through Iran.
Tapping Deeper Into INSTC Capacity
Amani noted that to arrive at the 20-million-ton goal, Iran plans to tap further into the capacity of 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 plans to connect to those of Azerbaijan and Russia.
The corridor connects Iran with Russia’s Baltic ports and gives Russia rail connectivity to both the Persian Gulf and the Indian rail network.
This means goods can 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.
Iran and Russia have agreed on details of their plan to transit 10 million tons of goods along the corridor.
The agreement was reached during a meeting of the two sides’ transportation officials in Moscow on June 28-29.
The North-South route, with its access to the Persian Gulf states, India, China and Africa, could become an actual competitor to the Suez Canal in the future, according to Russian First Deputy Prime Minister Andrei Belousov.
"The development of the corridor today depends to a decisive degree on Russia's interaction with the Republic of Azerbaijan and our countries' interactions with Iran. We expect that the amount of Russian cargo via the three arms of INSTC will increase nearly twofold by 2030 from the current 17 to 30 million tons. But we see the main prospect, which will account for more than half of the growth, first and foremost in the western route via Azerbaijan,” he said at the 15th Verona Eurasian Economic Forum in October.
"We would like to invite you to consider the possibility of creating a joint operator from the three countries: Russia, Azerbaijan and Iran, along the entire western route to ensure end-to-end transport services and a high level of logistical services," he was quoted as saying by Interfax, using the United Transport and Logistics Company operator created by Russian Railways, in cooperation with the national railroad companies of Kazakhstan and Belarus as an example.
"Russia proposes considering the possibility of launching such services, taking into account that the operator would also perform shipping functions, contract for transportation, transshipment in sea ports, and provide customs and other support to transportation,” he said.
Russian Deputy Transport Minister Valentin Ivanov noted on the same occasion that in relation to the rail infrastructure, the ministry believes it would be feasible to create a joint logistical operator "so that all issues dealing with transit via the territories of Azerbaijan, Iran and Russia could be addressed based on the principles of all services in one place and resolved promptly and at high standards without any delay for shippers' convenience."
"We believe that the creation of this logistical operator needs to be reflected in our trilateral intergovernmental agreement. We're already working on it with our colleagues from Azerbaijan and have drafted a concept of the trilateral agreement with Iran, and we're coordinating it," he said.
First Cargo Transit Under eTIR Carnet Along INSTC
The first transit shipment under eTIR Carnet (TIR Convention) has been successfully accomplished along the International North-South Transport Corridor, an Iranian customs official announced in September.
“The transit shipment included industrial alcohol weighing 21,970 kg and worth $82,000. It was declared to the customs terminal at Shahid Rajaee Port [in southern Iran] by India and sent in one container to Russia from the Astara customs terminal [in northern Iran],” Hossein Saeedi, a Shahid Rajaee customs official, said.
“Transit documents and carnet used to be sent manually to the customs 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 and as soon as possible. The electronic TIR procedure will facilitate transit procedures, help the development of the north-south corridor and promote the electronic exchange of information between countries and trade,” he was quoted as saying by IRIB News.
The 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 as it decreases the risk of deception, accelerates customs formalities and reduces costs. The 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 Carnet project has been carried out by the two companies,” said Behnam Faramarzian, the head of International Transportation and TIR Carnet Department of the 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,” he was quoted as saying by Otaghiranonline.ir.
“This method accelerates customs process and the time needed to transfer goods from the origin to the destination. This pilot project has been successful so far; if it produces desirable results, it can help the development of 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.”
ECO’s ITI Rail and Road Corridor
The active utilization of ECO’s ITI Rail and Road Corridor has also increased the volume of transit through Iran.
A ceremony was held in October of last year at Murat Bey Customs Post in Istanbul, Turkey, to mark the arrival of the first two of Pakistan’s National Logistics Company trucks carrying goods from Pakistan to Turkey, via Iran, under the Transports Internationaux Routiers Convention.
The NLC trucks departed from Karachi on Sept. 28 and reached Istanbul on Oct. 7, covering a distance of 5,300 kilometers, Pakistan Observer reported.
The ceremony was attended by senior officials of the Turkish Ministry of Transport and Infrastructure, Ministry of Trade, Chamber of Commerce and Commodity Exchanges, as well as the International Road Transport Union, ECO Secretariat and Iran’s Ministry of Roads and Urban Development.
Members and representatives of the Turkish private sector active in the transportation sector and representatives of NLC and Pakistan’s Ambassador to Turkey Muhammad Syrus Qazi, accompanied by representatives of Pakistan’s Embassy and Consulate, participated in the ceremony.
Umberto de Pretto, secretary-general of IRU, based in Geneva, Switzerland, also attended the ceremony.
The participants hailed the development as a vital step in promoting connectivity and enhancing trade between Pakistan and Turkey.
Ambassador Qazi highlighted the government of Pakistan’s focus on geo-economics and how regional connectivity was crucial in this regard.
He hailed the trial run of NLC trucks as a major step that will strengthen road connectivity between Pakistan and Turkey, and also help promote bilateral trade.
The ambassador noted that operationalization of this road link would help reduce transportation cost and time. Reviving the Islamabad-Tehran-Istanbul road transport corridor will generate revenue, boost trade and increase economic cooperation among ECO member states.
After the initial successful run, NLC said it intends to increase and regularize the transport of goods between Pakistan and Turkey, helping bring the two countries closer.
Javad Hedayati, director general of the Transit Affairs Bureau of Road Maintenance and Transportation Organization of Iran, says the ITI Corridor can easily replace the Suez Canal route.
“ECO’s ITI transportation corridor holds huge potential. For one thing, transportation time between Istanbul and Pakistan is reduced to 10-12 days from 25-30 days [through the Suez Canal]. Moreover, the corridor reduces transportation costs by 30%,” he was quoted as saying by the news portal of the Ministry of Roads and Urban Development.
According to the official, transportation costs rose dramatically in the wake of the Covid-19 pandemic.
“This has made road freight transport even more cost-effective. Today, there is a great opportunity for us to use our transit corridors, ITI in particular, to their full potential,” Hedayati said.
Resuming operations after 10 years, the first Islamabad-Tehran-Istanbul train carrying goods from Pakistan to Turkey via Iran rolled into the Turkish capital Ankara earlier this year.
The ITI cargo train started its journey from Islamabad on Dec. 21, 2021, and arrived in Ankara after 13 days. Turkey's Transport and Infrastructure Minister Adil Karaismailoglu, Pakistani parliamentarian Makhdoom Zain Hussain Qureshi and Iranian Ambassador to Turkey Mohammad Farazmand attended the ceremony to mark the arrival of the train, Daily Sabah reported.
Departing from Margalla Station in Islamabad, the train embarked on its 5,981-kilometer (3,666-mile) route, arriving in 12 days and 21 hours. The cargo train aims to boost trade among Pakistan, Iran and Turkey. The train had eight loaded wagons, 20 feet (6 meters) in length, each with a capacity of 22 tons.
Karaismailoglu in his speech said the new railroad will offer another option to industrialists and businesspeople on the Pakistan-Iran-Turkey route.
"It will save time and cost compared to sea transportation between Pakistan and Turkey, which takes 35 days, and will lead to the development of trade between the two countries," he said.
"With the Islamabad-Tehran-Istanbul train, a new railroad corridor will be provided to our exporters in South Asia, which has the highest population density globally, reaching Pakistan, neighboring India, China, Afghanistan and Iran. In this way, our country will be one step closer to its goals of becoming a bridge and logistics base between Asia and Europe," Karaismailoglu added.
Speaking at the ceremony, Qureshi noted that the ITI train would play an important role in enhancing regional connectivity and promoting economic and commercial activities in the ECO region.
Iran, Pakistan and Turkey established the Regional Cooperation for Development Organization in 1964, renaming it ECO in 1985.
The Pakistani parliamentarian noted that the train would offer Pakistan an opportunity to further increase its exports and strengthen its connectivity with international markets, including in Europe.
"The current government in Pakistan believes in regional connectivity and we feel that to play a role at the national stage, we need to be economically reliable. In order to do that, we need to not only have peace in our region but also increase trade within our neighborhood and the ITI project will become a friendship project," Qureshi told Anadolu Agency in an interview.
"We get access to the European markets and Turkey gets access to Central Asian states so it is a mutually beneficial arrangement and I hope it will be sustainable and we can grow from it further.”
Ambassador Farazmand in his speech explained that the ITI railroad project was first launched in 2009 under ECO, but remained suspended due to technical issues and restarted a decade later.
“The three countries also plan to launch a passenger train along the same route in the near future,” he said.
The first train from Islamabad to Istanbul was inaugurated on Aug. 14, 2009. Since then, eight trains have been dispatched from Pakistan to Turkey. The country has also dispatched six trains to Pakistan, but the train service was discontinued due to floods in the South Asian nation in 2009.
Kazakhstan-Turkmenistan-Iran-Turkey Corridor
The first container train on Kazakhstan-Turkmenistan-Iran-Turkey corridor, carrying a sulfur cargo, arrived at Tehran Train Station from Incheh Borun border terminal in September before setting off to Turkey and Europe.
It carried 24 wagons and 48 twenty-foot containers, IRNA reported.
Kazakhstan’s President Kassym-Jomart Tokayev called on his partners in Central Asia to make more active use of the Kazakhstan-Turkmenistan-Iran railroad.
"We encourage our partners to make more active use of the Kazakhstan-Turkmenistan-Iran railroad, the shortest route between East Asia and the Persian Gulf countries," Tokayev was also quoted as saying by Interfax at the summit of the heads of the Central Asian countries in Cholpon-Ata.
This new logistical solution makes it possible to cover more than 6,000 km in only 12 days, the president said.
Moreover, the Kazakh seaports Aktau and Kuryk in the Caspian Sea can provide access to the markets of Middle Eastern and European countries.
Tokayev also said it is necessary to increase the transport connectivity of the region and improve transit facilities.
Nurlan Sauranbayev, chairman of Kazakhstan National Railways who recently accompanied a high-ranking delegation to Iran, said in a meeting with Miad Salehi, the CEO of the Islamic Republic of Iran Railways, that the two sides signed a memorandum of understanding, based on which part of the freight carried along the China-Russia-Europe rail corridor will be redirected through the China-Kazakhstan-Iran-Turkey rail transportation route.
They signed another MoU for expanding Tehran-Tashkent rail transportation ties, setting preferential transportation tariffs and helping increase transit through the two countries.
