International sanctions against Russia leads Kazakhstan to seek port alternatives

Aktau, Kazakhstan (PortSEurope) March 13, 2022 – International sanctions against Russia has forced Kazakhstan to seek alternative routes to export, import and transship cargo. The Kazakh Ministry of Industry and Infrastructure Development is in active negotiations with the transport administrations of several countries to be able to bypass Russian territory and replace Russian ports. Chairman of the Board of Kazakhstan Temir Zholy (national railway operator), Nurlan Sauranbayev, claims that currently the transportation of goods in the export direction is operating normally, both by rail and seaports. However, he acknowledges that Caspian Sea is seen as an alternative. Trans-Caspian International Transport Route (TITR) “In order to ensure uninterrupted transportation of goods to European countries, an increase in the volume of transportation through the Trans-Caspian International Transport Route (TITR) in the direction of Azerbaijan and Georgia (the ports of Baku, Batumi and Poti) is being worked out,” Sauranbaev said. According to Anuar Nemyshov, head of the commercial department of Kazakhsatn’s Caspian port of Aktau, in the context of the current situation, the TITR route will serve as a profitable alternative to the once-established supply chain (mostly through Russia) for Kazakhstani and international exporters and importers. “Regular feeder lines to the ports of Baku (Azerbaijan), Turkmenbashi (Turkmenistan) and to Iran, in partnership with the railway administrations of the TITR member countries, can provide a wide logistical choice for accessing the markets of Europe, the Middle East, and the Caucasus,” Nemyshov said. He added that the infrastructure, equipment and modern technological processes of reloading, which the port of Aktau already has, are able to meet the needs of customers in the safe and efficient handling of almost any type of cargo - containers, grain, oil products, other general and bulk cargo. Several hotlines have been opened to answer incoming questions, where specialists will advise on all topics of interest. The Prime Minister of Kazakhstan, Alikhan Smailov, said that Turkey has been invited to actively use the seaports of Aktau and Kuryk. “Under the current circumstances, TITR, passing through Kazakhstan, Azerbaijan, Georgia, Turkey, and European countries, presents great opportunities for realising the transit potential of Kazakhstan. In this context, we propose to actively use the seaports of Aktau and Kuryk with further shipment of goods via the Baku-Tbilisi-Kars railway line,” Smailov said. According to Sergey Dolzhenko, head of the external logistics department of ArcelorMittal Temirtau, the metallurgical company plans to resume transportation of metal products (hot-rolled coils, cold-rolled coils, tin in bundles, galvanized sheets) through the port of Aktau with further shipment of 30,000-50,000 tonnes per month through Azerbaijan, Georgia in the direction of Egypt and Lebanon. Kazakhstan Minister of Industry and Infrastructure Development Kairbek Uskenbaev noted that the current load of the ports of Aktau and Kuryk is only 23% and there is a huge spare capacity for cargo handling. “An additional route via the Baltic ports of Riga, Ventspils and Liepaja is also being worked out. It should be noted that in order to increase the volume of container traffic, work is underway to open the production of domestic containers. Thus, in 2022–2023, it is planned to containerise 2 million tonnes of cargo and increase the share of container traffic (export) to 30%," Uskenbayev said. Ports of Aktau and Kuryk “As an alternative land route for the delivery of goods to Europe, we propose to use the capacities of the Kazakh seaports of Aktau and Kuryk, bypassing the ports on the Black Sea, then to Azerbaijan, Georgia, Turkey, Bulgaria, Hungary and further to Western European countries,” said Yerlan Absatov Kazakh transport union (KAZLOGISTICS) director. Such a route is longer and more expensive, but safer, he added. In the light of recent events in Ukraine, the Port of Kuryk can increase its cargo transshipment five folds or additional additional 4 million tonnes, Serik Akhmetov, General Director of Port of Kuryk said. Oil products, fertilizers, chemicals, metal and consumer goods are exported from Kazakhstan through the port of Kuryk. Imports are food, industrial equipment, textiles, electronics, building materials and other goods. Various equipment, electronics, textiles, chemical industry products, metal products from China, Kyrgyzstan and Uzbekistan. In January 2022, the port handled 82,289 tonnes of cargo. In 2021, this figure reached 974,000 tonnes. Of these, 564,000 tons accounted for railway transshipment. Over 80,000 tonnes of cargo have been transshipped through the ferry complex of Port Kuryk since the beginning of 2022, Akhmetov said. According to Kazakhstan’s Ministry of Industry and Infrastructure Development, the ports of Aktau and Kuryk are operating normally. There is no cargo downtime. Kazakhstan’s ports have additional cargo processing capacity of up to 10 million tonnes, including about 5.5 million tonnes of oil. Aktau and Kuryk ports are currently operating at around 23% capacity. The plan is that goods arriving by rail at the port from Asia can be transported across Caspian Sea to Baku port in Azerbaijan. From Baku, cargo will be transported by rail to the Georgian Black Sea ports of Batumi and Poti. From there, sea lines will take goods to Constanta in Romania or to Burgas and Varna in Bulgaria. Alternatively, the cargo can go through the Bosporus Strait to Mediterranean Sea ports. From these ports, cargo rail services will bring goods to markets in Europe. On February 24, Russia invaded Ukraine. U.S. and EU sanctions practically closed Russian ports for international cargo and ships. The war also closed all Ukrainian ports in the Caspian and Azov Seas. Traders are redirecting cargo and seeking new routes to market for cargo which previously used these ports. The war in Ukraine and the massive Western sanctions against Russia led to a meeting in Baku on March 9 between Azerbaijan’s Transport Minister Rashad Nabiyev and a delegation headed by Chairman of the Board of Kazakhstan’s Samruk-Kazyna JSC Almasadam Satkaliyev about optimisation of transport tariffs, synchronisation of customs procedures to increase the volume of freight traffic along international transport corridors passing through the countries. TITR allows European companies to bypass Russia, which also sanctioned the transit of certain types of goods through the country. Now Russia is completely isolated from the international trade. The importance of this route was underlined with the inclusion of Georgia and Azerbaijan in the European Union (EU) TEN-T network. More PortSEurope news about the Ukrainian crisis Copyright (C) PortSEurope. All Rights Reserved. 2022.

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International sanctions against Russia leads Kazakhstan to seek port alternatives

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