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European Union

The Middle Corridor: A Niche Option in the Europe-China Trade Route

Strategic Insights

— 2 min read

The Middle Corridor, a strategic transport route connecting China to Europe, has been gaining importance in the face of changing global geopolitics. Experts consider it a useful addition to the four other competing routes and transport modes, but its slow journey time and limited capacity make it a niche option. The route's freight costs can be around $150 per ton, but it takes 25-30 days, which is still slower than the sea route.

Key Takeaways:

  • The Middle Corridor is a useful addition to the four other competing routes and transport modes, but its slow journey time and limited capacity make it a niche option.
  • The freight costs of the Middle Corridor can be around $150 per ton, while the sea route costs around $150 per ton for a full container, taking only a little longer than the Middle Corridor (27-35 days).
  • The volumes transported along the Middle Corridor have been rising, reaching 4 million tons in 2024, but this is still dwarfed by the sea route carrying over 200 million tons.
  • The Russian route is out of the game due to Russia's invasion of Ukraine and limited capacity of the Trans-Siberian railway, making it less competitive.
  • The Israeli military power and successes backed by the US may reduce the geopolitical risks associated with the Yemen Houthi attacks on shipping, but it's too early to confirm.
  • Europeans see the Middle Corridor as a geopolitical diversification insurance policy and an economic niche role between the fast air freight and slow shipping, both direct links without transit complications.
  • The EU's Global Gateway program is funding elements of the needed infrastructure for the Middle Corridor, and European logistics operators are experimenting with the route, but still regard shipping and air freight as the primary modes.
  • Azerbaijan plays a crucial role in ensuring the sustainability and efficiency of the Middle Corridor, and Baku is becoming a logistics hub thanks to its strategic location and infrastructure projects.
  • The EU-Azerbaijan bilateral cooperation in transport, energy, and digitalization has potential for expansion, particularly in diversifying the EU's gas and oil supplies away from Russia.
  • The main risk associated with the Middle Corridor is the inability of the governments involved to agree on common standards and governance, necessary to cut the journey time.

Statistics:

  • Freight costs of the Middle Corridor: around $150 per ton
  • Journey time of the Middle Corridor: 25-30 days
  • Volumes transported along the Middle Corridor: 4 million tons in 2024
  • Sea route volumes: over 200 million tons
  • Freight costs of the sea route: around $150 per ton for a full container
  • Journey time of the sea route: 27-35 days
  • Freight costs of shipping around South Africa: around $250 per ton
  • Journey time of shipping around South Africa: 42-49 days
  • Freight costs of air freight: around $8,800 per ton

Sources:

  • AZERTAC, "Expert: Middle Corridor Still Niche Option in Europe-China Trade Route"
  • Michael Emerson, Senior Research Fellow at the Centre for European Policy Studies (CEPS)
  • Global Gateway program
  • Azerbaijan's Ministry of Economy

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