The Islamic Republic of Iran Shipping Line Group has set a record in shipment of goods along the International North-South Transportation Corridor.
IRISL moved 27,500 TEUs weighing 337,000 tons along the corridor in the first four months of the current Iranian year (started March 21), IRNA reported.
The report noted that initially only two transit routes were defined among the ports of India, the UAE and Russia at the outset of the INSTC project, but the number of routes has increased to 14 spanning across different ports of the world over the last two months.
According to IRISL, countries of the Commonwealth of Independent States (CIS) and Russia are the main transit destinations from the shipping points; the goods will be delivered to the owners door-to-door, using the group’s facilities.
IRISL has focused on the multimodal transportation of goods as one of its main strategies. It 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, 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 in 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 would substantially cut travel time for everything from Asian consumer goods to Central Eurasia’s natural resources to advanced European exports.
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 customs procedures.
The exports accounted for 46% and 18.1% of the weight and value of Iran’s total fruit and vegetable exports during the period respectively.
Iran and Russia have agreed on details of their plan to transit 10 million tons of goods along the International North-South Transportation Corridor, the news portal of the Ministry of Roads and Urban Development reported on Saturday.
The agreement was made during a meeting of the two sides’ transportation officials in Moscow on June 28-29.
The Iranian side was led by deputy minister of roads and urban development for transportation, Shahriyar Afandizadeh. He was accompanied by deputies and managers from the Civil Aviation Organization of Iran, Ports and Maritime Organization, and the Construction and Development of Transportation Infrastructures Company as well as representatives of private sector in marine and road transportation.
Russian Deputy Transport Minister Dmitry Zverev led his country’s delegation.
Afandizadeh and his Russian counterpart signed a protocol for their agreement.
A wide range of subjects related to transit and transportation cooperation were discussed during the two-day meeting, but the transit of 10 million tons of goods along INSTC was the main topic.
IRISL earlier piloted the multimodal transit of cargo along INSTC for carrying goods from Russia to India, according to the head of Solyanka Port in Russia’s city of Astrakhan.
“The consignments are two 40-feet containers of wood laminates weighing a total of 41 tons. The containers were loaded at St. Petersburg and are heading toward Astrakhan where they will be loaded again at Solyanka Port. They will then traverse the Caspian Sea to reach Iran’s Anzali Port where they are scheduled to be transported to Bandar Abbas port city in the south of the country via trucks. The two containers will then be dispatched to Jawaharlal Nehru, India’s largest container port,” Darioush Jamali was also quoted as saying by IRNA.
The official estimated that the transit of this first trial consignment, as part of collaboration between the Islamic Republic of Iran Shipping Line Group’s logistic companies in Russia and India, will take less than 25 days.
“The shipments will be using one-way bill along their journey. We hope that this first transit on INSTC will lead to considerable revenues and a boost in transit and logistics in Iran, Russia and India,” he added.
Solyanka is one of the 15 ports located in Astrakhan’s Economic zone and is considered the busiest of them all. Some 53% of Solyanka Port’s shares belong to Islamic Republic of Iran Shipping Line Group.
The Russian port of Astrakhan is a hub for commercial activities of nearly 200 Iranian firms making the port the largest center of Iranians’ economic activities in Russia.
Iran’s first House of Commerce was inaugurated in Astrakhan in October 2017 with the aim of boosting trade between Iran and Russia.
Baku Declaration
Iran, Azerbaijan and Russia signed a declaration at the end of the first trilateral meeting on the development of the North-South international corridor in Baku last week.
The signatories are Azerbaijani Deputy Prime Minister Shahin Mustafayev, his Russian counterpart, Alexander Novak, and Iranian Minister of Roads and Urban Development Rostam Qasemi, Interfax reported.
The two sides said they would draft an agreement on building the Rasht-Astara railroad in the Iranian territory within a month and would start discussions on project details by the end of this year.
They declared their readiness for cooperation to fully unlock the transport potential of the corridor and thus achieve the goal of 30 million tons of cargo to be annually transported via the three states by 2030.
There is also an agreement to set up a joint working group to facilitate transit procedures. The group will hold its inaugural meeting within a month.
Talks to Complete INSTC’s Missing Link
A Russian delegation of rail officials met with the head of the Construction and Development of Transportation Infrastructure Company of Iran, Kheirollah Khademi, in Tehran last week to survey different aspects and opportunities in Russia’s cooperation in constructing Rasht-Astara railroad.
During the meeting, officials from Iran’s Ministry of Roads and Urban Development, as well as managers, experts, contractors and engineers, engaged in the project were present, IRNA reported.
“If the financial resources are provided, the Rasht-Astara railroad, which is a missing link along the International North-South Transportation Corridor, will be completed within three or four years,” Khademi said.
The official noted that INSTC links Northern Europe, Scandinavia and Russia, through Iran, to the littoral states of the Persian Gulf and the Indian Ocean and Southeast Asia, adding that the route is the cheapest and fastest transit route connecting these countries to one another.
“The meeting was held because the inauguration of INSTC is very important to the two sides and we are surveying ways of expanding bilateral cooperation in the design, execution and determining the technical aspects of the route,” he said.
Russia-Ukraine Conflict’s Impact
The conflict between Ukraine and Russia, and Iran’s unique geopolitical location have paved the way for the revival of this international route.
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.
INSTC runs north-south across Iran and connects the Caspian Sea to the Persian Gulf allowing European goods transit east from 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, but 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 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. Excerpts follow:
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 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 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 begin growing steadily in the near future.”
