The World Bank View on Middle Corridor

Dec 1, 2023

Global supply chains are experiencing elevated volatility and need for improvement and diversification, due to natural and man-made shocks, but also trade realignments and technological change. The new World Bank’s report on the Middle Corridor is another good contribution to the active discussions that are underway in Europe and Central Asia on transport routes and options in the region.

The Middle Corridor (MC) , a multimodal transport corridor connecting China to Europe, has been receiving elevated attention following Russia’s invasion of Ukraine. The MC links China, and Kazakhstan by rail through Dostyk or Khorgos / Altynkol, crosses Kazakhstan by rail to the Aktau Port, crosses the Caspian Sea to the Port of Baku / Alyat, and Azerbaijan and Georgia by rail to then either continue by rail to Europe through Türkiye or crossing the Black Sea.

Due to inefficiencies and infrastructure gaps in Türkiye, the Black Sea route is currently preferred by operators. The MC, with its numerous border crossings, transshipments between modes and operational inefficiencies, takes three times longer than the Northern route (via Russia) and is comparable in duration to the maritime route. As a result, it has consequently held a lower priority for long-distance trade. 

Russian war in Ukraine brought a new perspective for the MC, as an alternative corridor to diversify trade routes and build economic resilience, decreasing dependency on corridors through Russia. Container traffic on the MC increased by 33% in 2022 compared to 2021, though from a low base. As shippers shifted unprecedented volumes to the MC, the limits of the Corridor were quickly apparent – border crossings, transshipment and coordination issues led to very high transport delays.

The World Bank’s trade model foresees an overall increase in trade between China and the EU by about 30% by 2030. This trade will remain unbalanced with westbound flows representing 62% of total trade. Total trade from Azerbaijan, Georgia, and Kazakhstan increases by 37% mostly driven by Kazakhstan’s exports.

Volumes on the MC are expected to triple by 2030 according to our model – however, it will remain mostly a regional corridor, with transcontinental trade representing a small fraction of the volumes.

 To

📸 The World Bank