2012 – Azerbaijan, Georgia, Rail, Container block train Poti-Tbilisi-Baku

Rail Project – The proposed focuses on the existing connection between the Poti sea port (Black Sea) and Baku sea port (Caspian Sea hub at Alyat) via TRACECA Central Axis. The project has a potential for a geographical extension towards Central Asia - Silk Wind Block Train Project.

Rail transport in the Caucasus remains attractive for heavy containers which cannot be carried by road due to weight limitations. Attractiveness is however reduced owing to a sub-optimal information system and customer service enabling the users to locate their cargo and learn about its status. Georgian Railways and Azerbaijan State Railways have agreed on the scheduled operation of a container train between Pori and Baku and started operations in early 2012. Currently the operation is underway, but with irregular schedule, because of the difficulties with securing container traffic caused by general economic recession (drop of import demand of Azerbaijan, reported by freighforwarders). Nevertheless the main commercial issues are still linked to the insufficient competitiveness of rail transport:

• the door-to-door transit-time is longer than by road;
• delivery at consignee's premises at final destination in Azerbaijan is not always possible due to the lack of container handling equipment in the stations;
• there is not yet any single operator selling through, door-to-door tariffs so rail based quotations are longer and more difficult to build all the more as Georgia and Azerbaijan do not take common decisions / can take contradictory decisions regarding their rail tariff policy;
• while the basic rail freights are comparatively rather low, the add-ons (being mostly the full + empty container handling expenses at the stations, trucking from/to the stations and empty return voyage) make the overall door-to-door prices equal or even higher than the direct trucking ones;
• due to the reason mentioned above and owing also to the fact that the rail freights are much lower for shipments in break bulk than for shipments in containers, a lot of cargo - especially the goods exported from Caucasus - are carried in gondolas or closed railcars, resulting in more handling and non-physical interventions.

To improve the existing railway connection between ports of Poti and Baku, it is proposed to launch a block container train with the following characteristics:

• 56-wagon train in intake capacity
• scheduled / fixed-time service
• transparent and long-term tariff announced
• frequent connection - daily or every other day both ways depending on volumes
• transit time reduced from 42 to 25-30 hours
• commercial modal shift from road to rail
• possible mid/long-term improvement of conditions of transport to other Central Asian landlocked countries
• future coordination with connecting Block trains/shipping lines (Silk Wind to/from Kazakh-Chinese border, "Viking" across the Black Sea) 

Improved regularity, reliability and capacity of existing service; shorter transit time between Poti and Baku; better coordination of transport operations between ports, railways and trade facilitation authorities will bring about a much needed diversion of large cargo-flows presently carried by trucks on roads crossing populated areas and mountainous terrains. The implementation of the BCT Poti-Baku-Poti also represents the first indispensable phase for the development of containerized import trade through Caucasus into Central Asia and attraction of containerizable export cargo out of Central Asia.

A reasonable estimate is that the shifting of minimal volumes (potential traffic: 13.3Mt/year equivalent to 1.33M TEUs) of about 5% from road to rail would save at least 30,000 truck voyages per annum across the Caucasus and allow the implementation of a shuttle service departing daily from Poti and from Baku.

• Environmental impacts: The shift from truck to rail transport reduces congestion as well as air and noise pollution. Especially, the densely populated areas and the mountain terrains which are suffering from heavy truck transport can be relieved of air pollution and noise. Beyond, transport via train reduces CO2 emissions in the region. Since the rail tracks are already in use no further construction and land consumption is needed.
• Socio-economic impacts: The proposed project should help to facilitate trade by improving transit procedures, but also increase the cruising speed of trains thereby reducing the transit time between the Black Sea and Caspian Sea regions and diverting a significant part of traffic from heavily-driven roads to rail. It is expected that in mid- and long-term perspectives this project can also help TRACECA landlocked countries in Central Asia and Caucasus to indirectly benefit from the intensified trade and transit on Central TRACECA Axis.
  

• Azerbaijan, Logistics Processes and Motorways of the Sea II, Project Fact Sheets
• Georgia, Logistics Processes and Motorways of the Sea II, Project Fact Sheets
• TRACECA, Investment Forum 2012

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