BAKU, Azerbaijan, July 1. The Middle Corridor [Trans-Caspian International Transport Route] will remain highly competitive to the overall benefit of Georgia and Azerbaijan, Iain Rawlinson, Chief Commercial Officer at APM Terminals Poti, a company, operating Georgia’s Poti Port, told Trend in an interview.
“The Middle Corridor may become competitive, compared to the Northern Corridor, due to its efficiency and transparency. For the Middle, Corridor to become competitive when the war in Ukraine comes to an end, and the situation across the region normalizes, it is going to require that it is extremely efficient in creating the transparent, effective rail-sea-real transportation links,” he said.
According to Rawlinson, it is very hard to give a forecast for this year, because uncertainties posed by the Russia-Ukraine conflict, as well as the continued implications of COVID-19 in China, directly affect the global supply chain. However, today, Chinese cargo, which is historically run through Russia, is being handled very well through the Middle Corridor.
As the chief commercial officer explained, the Russian corridor between China and Europe is pretty good, although there are challenges on the board between Belarus and Poland. Today, all the players on the Middle Corridor need to drive the concept of the Central Asia - Caucasus market as a part of the Chinese market, because, as he said, the Chinese market will ultimately tend to move back to the Northern Corridor when it reopens.
“The Middle Corridor will remain highly competitive when the Northern Corridor reopens to the overall benefit of Georgia and Azerbaijan. The opportunities for the countries on the Corridor to take advantage of the infrastructure and connectivity, and then to start driving local industries, are enormous,” he said.
As Rawlinson noted, the small and medium-sized enterprises (SMEs) of both Azerbaijan and Georgia need to set up and take advantage of the connection the Corridor creates, and therefore, drive the economic growth in the two countries.
“We see that it is not enough for us to look just at our own business. The APM Terminals closely engages with infrastructure providers from Azerbaijan, as well as Kazakhstan, and Uzbekistan. We also work with all major shipping lines to connect Poti to the European ports, such as Romania, Bulgaria, and Turkiye, as well as with the European railway operators, especially in Poland and Germany, to secure the connectivity, communication, and transparency of the Middle Corridor,” he added.
Further speaking, the chief commercial officer noted that APM Terminals is actively cooperating with Azerbaijani partners in order to improve communications across the region.
“We are in close, great cooperation with the Port of Baku. We also work with Azerbaijan Railways (ADY) on the railway perspectives to make sure that we are fully aligned on the Middle Corridor, and to make sure that cargo is moving extremely smoothly between the two countries, so the customers’ experience of using the Middle Corridor will only be positive,” he said.
According to the chief commercial officer, Azerbaijan is one of the largest trading partners of Georgia, and major manufacturers in Azerbaijan have a need for connectivity through Georgia, and APM Terminals is in close cooperation with a few quite major companies on an ongoing basis.
“We are working with a number of Azerbaijani companies. Because, at the end of the day, particularly on the Middle Corridor, Georgia’s success, and Poti’s success, is closely aligned with Azerbaijan’s success, both as part of the transit corridor, and also to improve Azerbaijan’s connectivity with the rest of the world,” Rawlinson added.
Commenting on the APM Terminals’ turnover, the chief commercial officer said the company recorded a significant rise in cargo flow in and out of the Poti Port over the first quarter of 2022.
“The tragic events unfolding in Ukraine right now have left the Caucasus region with big challenges in terms of the ability to get the cargo in and out. We have seen quite a significant increase, at least in the short term, over the last couple of months. How stable this is going to be is hard to say, because there is a big overall uncertainty in the region at the moment,” he said.
According to Rawlinson over the past two years, APM Terminals saw a substantial decline in volumes - over 20 percent each year.
“At the same time, we discovered new opportunities to diversify. We moved our focus to rail ferry and general cargo operations, and we were able to at least cover most of the financial shortages,” he noted.
Rawlinson explained that as a result of a combination of a change in trade patterns in 2022, container volumes started returning into the Black Sea and Georgia in particular.
“What we are seeing is an enormous interest on the part of both neighbors in the Caucasus, and also across the Caspian, in Central Asia. They are interested in promoting the Middle Corridor rail connection both for cargo originating out of China, which over the last few years has moved through Russia, but more recently we see it coming through Kazakhstan, across the Caspian, through Azerbaijan, and then to Georgia’s Poti, to be delivered by sea into Europe. The reason for this is that Northern Corridor across Russia is simply impossible to operate through right now,” Rawlinson said.
Today the company has a capacity of roughly 500-550,000 20-foot equivalent units (TEUs) per annum, which is an increase, compared to the last year when the operator handled just over 300,000 TEUs - around 60 percent of total capacity. The company is working closely with regional partners in order to improve the connectivity and cargo flow further.
Rawlinson also added that APM Terminals is working closely with the Georgian Government on new expansion projects.
“We have already embarked on an expansion project in the Port of Poti. We have broken ground on the renovation of the existing breakwater. The Port of Poti was founded in 1858, so the infrastructure is a significant part of our cost in maintaining the existing facility. This project will make sure that the breakwater will continue to be strong and big enough to protect the Port from the bad weather, particularly in winter,” Rawlinson said.
According to the chief commercial officer, another major investment is a project which is tied with the first one - the development of a new breakwater, and the construction of two new deep-water berths.
“Those will be births each 15 meters deep, which will be able to handle the biggest ships that come into the Black Sea today. That is pending the government’s approval right now,” he added.
As Rawlinson noted, APM Terminals is also working closely with the regional railway organizations to improve communications across the Caucasus and further.
“Talking about the Middle Corridor, it is a complex supply chain that railways and the sipping companies across the Black Sea and the Caspian use. 13 different parties are involved - from China-Kazakhstan border through Georgia's Poti. We work closely with the regional railway companies to manage and control the flow of cargo, so it goes efficiently and reliably,” he concluded.
APM Terminals is a port operating company headquartered in the Netherlands and is a unit of the Transport and Logistics division of the Danish Maersk shipping company.
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