The Significance of Baku’s Port

Because the world prepares for a new Cold War (or a second Cold War), the stress on global supply chains due to the war in Ukraine continues to have an effect on worldwide commerce. The move of products, notably vitality, from Central Asia to Europe has grow to be a significant problem because the battle commenced, with Europe on the lookout for various routes that keep away from Russian territory. The Trans-Caspian Worldwide Transport Route (TITR), generally generally known as the Center Hall, has emerged as a viable various. The infrastructural cornerstone of this route is Azerbaijan’s Baku International Sea Trade Port.

Allow us to perceive the significance of the Port of Baku. The Center Hall is a three way partnership composed of Azerbaijan, Georgia, Kazakhstan, and Turkey – because of historic and up to date tensions and disputes with neighboring states (particularly the 2020 Nagorno-Karabakh War), Armenia has not formally joined the Hall. Thus, Azerbaijan’s significance turns into obvious as it’s the solely Caucasus nation with a port within the Caspian Sea, to which items arrive from Kazakhstan and Turkmenistan.

In line with the Port’s press service, the Port’s cargo turnover in 2021 elevated by 14.6% or 5.6 million tonnes. In line with the Port, 2021 transshipment of dry cargo additionally grew – by 66%, whereas the transshipment of containers grew by 11.6% over 2020. Furthermore, the volume of heavy trucks elevated by 29.5% within the first half of 2022, in comparison with the identical interval in 2021. In whole, 23,410 vehicles have handed by means of the Port, in comparison with 18,075 automobiles a yr in the past.

Khudayar Hasanli, the Head of the Strategic Planning and Growth division on the Port, advised Trend news {that a} route for the transshipment of products from China to Europe passing by means of Azerbaijan has been established. “The variety of block trains have already handed by means of the territory of Azerbaijan alongside this route … Giant move of products is predicted alongside the East-West hall by means of the territory of our nation,” Hasanli said.

The TITR association expects that doubled container visitors “will translate to roughly 50,000 TEUs transported by means of the Center Hall in 2022.” Much more, the sixfold enhance in cargo volumes might imply that the Center Hall might see as much as 3,2 million metric tons of transported cargo by the top of the yr. In different phrases, we will typically count on extra items to move by means of Baku sooner or later as a result of Center Hall. Within the hypothetical state of affairs that nations like China and Uzbekistan be part of the Hall, this may present an much more vital increase (to be clear, the Middle Road is a project independent from China’s Belt and Highway Initiative). The Port at present has 13 berths and ten warehouses, protecting a complete space of 400 hectares.

For the reason that battle commenced, the Hall has gained worldwide consideration, notably from European governments, buyers, and transportation firms seeking to signal new offers. For instance, from 26-27 July, a delegation from Poland’s Ministry of Infrastructure and the Port Gdańsk Authority visited Azerbaijan. As a result, representatives from the two ports signed a Letter of Intent to advertise cooperation in areas like “port improvement and operation, fashionable logistics providers [and] intermodal transport.”

Personal firms are additionally seeking to enhance their operations in Baku. For instance, on 16-18 June, the Dutch-based logistics firm Cabooter Group visited the Port and mentioned better cooperation. The corporate has already commenced operations in Azerbaijan because it “organizes cargo supplies to China by means of the Port of Baku.” Equally, Baku-based transport firm ADY Container offers transportation services from so far as Tashkent (Uzbekistan) to the ports of Aktau (Kazakhstan), Turkmenbashi (Turkmenistan), Baku and from there to Georgian and Turkish ports within the Black Sea, with Constanta port (Romania) being the ultimate vacation spot.

There are additionally potential new companions for the Port. One is South Korea’s SJ Logistics America, as company representatives visited the Port in mid-July. Turkey’s Albayrak Grubu holding is a newcomer to the Caspian, because the holdings and the Port signed an settlement on 15 July. “The Events will collectively function on the ‘Fertilizer,’ ‘Ro-Ro’ terminals of the Port of Baku, [and] they are going to cooperate intently in different areas,” in line with an announcement by the Port. “We purpose to extend the Baku port position in our area, in addition to its logistics capabilities… Attracting our specialists to the Baku port will create the idea for mutually helpful cooperation within the first public-private partnership in Azerbaijan,” stated the pinnacle of Albayrak Holding, Mehmet Albayrak. Furthermore, as already talked about the Baku port is a part of the conglomerate of firms that represent the Trans-Caspian Worldwide Transport Route (TITR) affiliation, headquartered in Kazakhstan.

Additionally it is price noting that the Azerbaijani authorities has gone on a public relations offensive by bringing delegations to go to the Port, thereby rising its worldwide picture and significance. For the reason that battle in Ukraine commenced in February, the Port has hosted delegations from the European Parliament, staff members from the US Congress, diplomats from various countries, and even college students from Princeton University.

International powers haven’t ignored the relevancy of the Port and the Center Hall within the present international state of affairs. On 7 July, US Secretary of State Antony Blinken spoke with Azerbaijani President Ilham Aliyev. In line with State Department Spokesperson Ned Price, “the Secretary reiterated the USA supply of help in serving to facilitate the opening of regional transportation and communication linkages.”

Whereas Baku port’s significance is rising, the nation remains to be removed from turning into a globally famend container port. The Container Port Performance Index 2021, drafted by the World Financial institution and S&P Market Intelligence, doesn’t checklist the Baku port. Because of this, the Port doesn’t seem within the report’s checklist of prime ports in Western, Central, and South Asia. The top Port in the said region (and in the world) is King Abdullah Port, Saudi Arabia, whereas the final place is reserved for Chattogram port, Bangladesh.

Whereas the amount of East-West and West-East cargo passing by means of the Caspian is predicted to extend, it’s unclear if the amount will develop sufficient for future Indexes to incorporate the Azerbaijani Port. With that stated, infrastructure upgrades, sooner cargo motion, and higher administrative processes will undoubtedly assist this port achieve notoriety, notably if the general significance of the Center Hall grows within the coming months and years. Clearly, this state of affairs will depend upon the battle and the way forward for international geopolitics and provide chain methods.

Furthermore, the way forward for the Port of Baku is inevitably tied to different Center Hall states’ infrastructure initiatives. Experiences present that different nations are upgrading ports, railways, and roads, however extra is required, together with a deep water port in the Black Sea to accommodate bigger container ships. Lastly, the shortage of Armenian participation can also be problematic; if Armenia decides to hitch the Hall, this might make transportation from the Caspian to the Black Sea sooner.

The event of Baku port shouldn’t be solely depending on the Center Hall. There may be additionally the Worldwide North-South Transport Hall (INSTC), which connects India and the Persian Gulf, by way of Iran and Azerbaijan, to Russia, and from there to Northern Europe. As well as, the Azerbaijani authorities is reportedly within the technique of increasing the Zangazur Corridor, which might strengthen the connection from Iran to Azerbaijan, passing by means of Baku.

A important problem is that the INSTC will cross territory that is still contested between Armenia and Azerbaijan. “The irony is that ought to the hall grow to be purposeful, Armenia would profit as it could then have rail connectivity connection by means of to Russia, in addition to Turkey and Iran,” argues the Silk Road Briefing. It stays to be seen whether or not the Armenian authorities will determine to completely be part of both the Center Hall, the INSTC, or each. Nonetheless, the problem is that the Baku port will stay a important node in any commerce and commerce that passes by means of Armenia.

Because the battle in Ukraine continues, the institution of a brand new Chilly Struggle, mixed with the results of the COVID-19 pandemic, international provide chains proceed to endure a brutal shake-up. Governments and personal transportation industries search to keep away from passing by means of Russian territory. Thus, the Trans-Caspian Worldwide Transport Route, or Center Hall, has elevated in significance because the battle commenced. Azerbaijan’s Port of Baku is a important transportation node that unites Central Asia with the Caucasus, Turkey, and Europe. As phrases like “provide chain” rapidly rise to the highest of the present jargon amongst policymakers, analysts, and students, the Port of Baku have to be monitored intently.

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