At the present time the Caucasus Transit Corridor (CTC) plays a relatively minor role in the movement of non – oil cargo between Central Asia and Europe; the preferred route is via Russia and the Baltic ports. Some reasons for this include the erratic operation of Caspian Sea ferries linking Baku with Aktau and Turkmenbashi, lack of “transparency” of port charges and customs fees in Baku, inadequate warehousing at the port of Poti for some commodities and “established” relationships with the traditional transport route providers on the route through Russia and the Baltic Sea ports. This report investigates the comparative transport charges and service provided by the CTC with the Russia/Baltic corridor as well as through the Ukraine and the southern routes through Turkmenistan and Iran. Primary focus of the conclusions is identification of measures needed, whether they are investments or changes in policy/legislation which would improve the attractiveness of the CTC to potential users and the likelihood that significant traffic could be diverted from these alternative routes.
Several recommendations are included which will improve the infrastructure as well as the logistics environment in both Georgia and Azerbaijan. Azerbaijan was also included as it is the partner to Georgia in the CTC.
There are many positive signs for the future traffic potential for the CTC. Block container trains are now operating between Poti and Baku providing faster rail service in the corridor; forwarders and shipping lines are seriously considering moving cargo between China and Central Asia via Poti due to serious rail congestion within China and at the China/Kazakhstan border; private operators of block container trains between Odessa and Klaipeda have expressed interest in extending their services to the port of Poti and the CTC to Baku; the extension of the CTC rail link to Kars in Turkey will create an all – rail route option between Turkey and Baku; this route will likely capture some of the lucrative cargo flows now moving by truck between Turkey and Central Asia. All of these events point towards a bright future for an increase of traffic on the CTC, provided some improvements can be made to infrastructure and more effective movement of cargo through Baku port and across the Caspian Sea.