The South Caucasus has high transit potential to link China and Europe, making it attractive to landlocked Central Asian states. Given the current geopolitical tensions in the world, the Central Asian countries have intensified efforts to diversify trade routes, with a particular focus on the Trans-Caspian International Transport Route (TITR) to connect with Europe.

Since the beginning of the war in Ukraine, demand for the TITR has increased significantly. International sanctions have weakened Russia’s position in the Europe-China-Europe transit chain. Central Asian countries have begun to occupy this niche. The bulk of Chinese land cargo traffic, which had previously been northbound, has now been redirected to Central Asia. At the same time, the region has a unique opportunity to shed the status of a transport dead-end and become a transit hub of Eurasia. This prospect holds out great benefits for Uzbekistan, which is seeking to diversify foreign trade and extend its transit opportunities. 

There is close interaction with Azerbaijan, the largest economy in the Transcaucasia region, which acts as a connecting link between two strategically important transport hubs – the Trans-Caspian and Trans-Caucasian corridors. Tashkent has always shown great interest in these routes, and in light of the escalation of the Ukrainian crisis, the issue of their effective use has become even more urgent.

Transit through the Caspian Sea and the South Caucasus is important for Uzbekistan in terms of accessing the European market. In April 2021, the republic joined the GSP+ preference system, which allows Uzbek producers to export more than 6,000 types of goods into the European Union duty-free. As a result, exports almost doubled in one year. Intensification of mutual trade leads to growth in the freight flow, which requires the establishment of reliable transport communications and the elimination of problem areas in this segment. 

Back in 2019, Uzbekistan, Kyrgyzstan, Turkmenistan, Azerbaijan, and Georgia initiated a multimodal corridor connecting Central Asia with Transcaucasia. Later, Türkiye joined. Thus, it was possible to launch a combined transport route Central Asia–South Caucasus–Anatolia+ (CASCA+). It became part of the international transit route between Asia-Pacific countries and Europe. In December 2022, the first container train was sent from Uzbekistan to the Bulgarian port of Burgas on CASCA+. The length of the route is more than 4,000 kilometers. This is the optimal distance for the Uzbek carrier, which, thanks to Turkmen transit, saves time and money on transporting goods. The effect is quite scalable, given the start of the China-Kyrgyzstan-Uzbekistan railway project. Obviously, this transport route will not end in Central Asia, but will be extended to the Caspian Sea, and at the maritime border of Azerbaijan will be replaced by a trans-Caucasus corridor. 

Such a configuration will reduce journey distance from East Asia to Europe by 900 kilometers, and delivery time of goods by 7-8 days. This is a major advantage that drives the countries of Central Asia and the South Caucasus towards closer dialogue on transport logistics. Uzbekistan is particularly active, strengthening cooperation with Azerbaijan and Georgia. The main focus is on efficient use of rail and port infrastructure in both states. In particular, when entering the markets of Türkiye and Europe, Tashkent relies on the transit capacity of the Baku-Tbilisi-Kars (BTK) railway, which was put into operation in 2017. Demand for it has increased sharply due to the reorientation of much of the cargo flow from China to Central Asia, which has stimulated the development of trans-Caspian transport. The launch of new transport corridors using the potential of the railway line in the Turkish direction is not excluded. In this context, the capacity of the BTK was increased to 5 million tons per year. 

Uzbekistan, along with other Central Asian states, supports the opening of the Zangezur (Nakhchivan) Corridor, which could become a strategically important component of land routes from East Asia to Europe. The economic value of the road through the Nakhchivan Autonomous Republic, which is an Azerbaijani exclave reached through Armenia, lies in its ability to reduce the route from Azerbaijan to Türkiye by 343 km, which will lead to huge savings in time and transit costs for transportation along the Europe-China-Europe axis. However, the launch of the Zangezur Corridor is complicated by the divergent positions of Azerbaijan and Armenia on this issue. 

Another critical link in the transport connectivity of Central Asia and the South Caucasus is the Baku International Sea Trade Port, which services the entire flow of Uzbek cargo transported through the Caspian Sea. Over the past several years, its volume has exceeded 1 million tons per year. A similar result has been achieved using the Georgian Black Sea ports of Poti and Batumi, which serve as conduits to world trade.  It is worth noting that Uzbekistan’s interest in these facilities is not only operational, but also investment-driven. 

In 2023, Tashkent announced its intention to construct sea terminals and warehouses in the ports of Poti in Georgia and the Baku port, as well as to implement joint shipbuilding projects with Azerbaijan. At the same time, it was agreed to develop one of the terminals of the deep-sea port of Chabahar in Iran. Long-term investments in maritime transport infrastructure, including the development of international trade ports, set a new trend in Uzbekistan’s transport policy, while creating a good foundation for the effective implementation of the country’s transit potential. All this correlates with the ambitious goal of increasing the volume of annual transit cargo to 22 million tons by 2030, which is becoming more realistic in light of the activation of the CASCA+ multimodal route as the demand for trans-Caspian transport increases.

At the same time, optimistic projections need to be supported by effective measures to remove administrative, legal and technical barriers that complicate the operation of international transport corridors, including TITR. In the current situation, urgent solutions are required to unify transport and transit tariffs, reduce customs duties, establish a single standard for transportation documentation, and simplify and accelerate border operations, and introduce IT technologies into the freight process, including electronic permit forms.

The resolution of problems depends on the willingness of the parties to compromise to achieve a mutually beneficial result. This approach is being successfully tested on the diplomatic track by Tashkent and Baku, both of which have raised the level of cooperation to a strategic partnership. Both countries have high transit potential and aim to benefit from it. Extending its logistics capabilities, Uzbekistan seeks to increase port cargo transport through Azerbaijan’s infrastructure. In turn, Azerbaijan is interested in extending the planned China-Kyrgyzstan-Uzbekistan railway line to the Caspian Sea, which will strengthen its position in the international transit system.

The main focus of the Uzbek-Azerbaijani dialogue in this specific field is to minimize transportation costs and reduce delivery times. Mutual tariff preferences, especially for ferry transport, could be a good way of doing this. This issue is already under consideration, as is the joint proposal of the parties to create a Trans-Caspian Digital Transit Portal to speed up border crossing processes. So far, Uzbekistan has managed to get discounts of up to 50% on the transport of goods by railways of Azerbaijan. This is a good result, which must be expanded upon. 

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AUTHOR’S BIO: Nargiza Umarova is a Senior Research Fellow at the Institute for Advanced International Studies (IAIS), University of World Economy and Diplomacy (UWED), and an analyst at the Non-governmental Research Institution, “Knowledge Caravan”, Tashkent, Uzbekistan.

Her research activities are focused on studying the developments of Central Asia, trends in regional integration, and the influence of great powers on this process. Also, she explores the current policy of Uzbekistan on the creation and development of international transport corridors.

You can contact her at [email protected].