Iran: Not Just Atoms, Also Logistics (Focusing on both nuclear advancements and strategic transportation systems)
The Unseen Trans-Eurasian Freight Route: Bridging the Gap Between East and West, By-passing Maritime Vulnerabilities
Iranian news agency Mehr's report, almost ignored by Western media during the diplomatic discussions regarding Iran's nuclear program in June, unveils a crucial development. This report reveals the gradual establishment of one of the most significant land-based logistics routes connecting China and Iran - two significant opponents of the Western coalition. With the potential for expansion to Turkey and Europe, this route presents a new entry point for cargo transportation between the EU and China, involving transit countries such as Turkey, Iran, and the Central Asian states of the former Soviet Union.
Considering that this transcontinental railway line spanning over 10,000 km will not rely on any treacherous sea routes (narrow, unsafe straits, and U.S. surveillance over tankers suspected of carrying sanctioned goods), it offers a unique advantage for global trade.
Although cargo rail transport between China and Western Europe has been expanding since 2011, it currently accounts for only slightly more than 7% of the overall commodities trade between China and the EU. Central Asia serves as the critical bottleneck for the route, with several issues:- First, the predominantly Soviet-era wide gauge (1520 mm) in Central Asia, contrasting with China, Iran, and Turkey’s standard European gauge (1435 mm).- Second, the mountainous terrain makes the railway route winding and slow.
The absence of a railway connection between the westernmost point of China’s route in the city of Kashgar and Andijan in eastern Uzbekistan necessitates a substantial railway detour through Kazakhstan. Since 2017, a cumbersome multi-modal route has also existed from Kashgar to Tashkent via Kyrgyzstan using road transport.
On June 17, 2023, a Memorandum for the construction of a Chinese-Kyrgyz-Uzbek railway line was ratified during the Second China-Central Asia Summit. Valued at $8 billion, this flagship infrastructure project aims to bridge the railway gap from China to Uzbekistan via Kyrgyzstan.
The aging railway infrastructure in Iran requires significant modernization. China, with growing interest in expanding trade routes to Europe, has persistently proposed modernizing the Trans-Iranian Railway, a wide-gauge east-west railway line that could significantly enhance the corridor’s potential. In June 2020, Tehran and Beijing signed a 25-year Comprehensive Strategic Partnership agreement, with China planning to invest $120 billion in modernizing the Iranian transportation infrastructure.
Meanwhile, Russia proposes financing and construction capabilities for the construction of a meridional railway line with a wide gauge (1520 mm) from the Caspian Sea ports in the north to the Persian Gulf port of Bandar Abbas in the Strait of Hormuz. This radical increase in the corridor's capacity will significantly bolster the Russian-initiated International North-South Transport Corridor (INSTC), diversifying freight options further.
Learn more about the role of the INSTC in the context of heightened tensions in the Middle East in the article "Logistics Shock in the Middle East"*.
Insight: The North-South Transport Corridor's geostrategic and economic significance increases amid escalating tensions in the Middle East by offering an alternative multi-modal freight route, circumventing vulnerable maritime chokepoints. As countries seek to mitigate risks associated with Middle Eastern geopolitical conflicts and maritime security issues, this corridor helps enhance regional connectivity and trade resilience. However, its development would require addressing logistical and regulatory hurdles, expanding transit options, and modernizing underdeveloped infrastructure. Overcoming these challenges is key to capitalizing on the corridor’s potential as a stable alternative, particularly given the uncertain outlook for other emerging transport projects like the India-Middle East-Europe Corridor.
Sports can provide a welcomed distraction from the ongoing geopolitical tensions in the Middle East. The Trans-Eurasian freight route, with its potential expansion to Europe, could potentially advance the economies of several countries involved, similar to the way sports can stimulate local economies through tourism and sponsorships.
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