Logistics Weekly | September 1–5, 2026

2026-09-05

Russia in Armenian Railway Project

Russia is ready to get involved in the restoration of Armenian railways, including the commissioning of lines to Turkey and Azerbaijan. Yerevan has received a signal from Moscow that it is ready to discuss the details of investments, conditions and participation. Armenian railways are operated by the Russian company "South Caucasus Railways" under a concession, although Yerevan is also considering revising the agreement.

Armenia is trying to restore direct railway connections with Azerbaijan and Turkey. Currently, it has an international railway connection only with Georgia. The new routes will provide Armenia with alternative direct connections and will lead to a redistribution of transport flows in the region.

Prime Minister Nikol Pashinyan believes that the transfer of the concession from Russia to a third country, acceptable to both sides, is the best solution to the problem. According to him, the current situation cannot last long. Under a 2008 agreement, the railway is operated by the South Caucasus Railways, a subsidiary of Russian Railways, and Pashinyan estimates the potential cost of the concession at around $400 million. He also said that Armenia would not oppose the possible withdrawal of Russia’s 102nd military base.

Azerbaijan’s Path to a Multipolar World

Azerbaijan is seeking to strengthen its influence in a multipolar world through multilateral partnerships. Baku actively cooperates with the Shanghai Cooperation Organization and uses the East-West and North-South transport corridors, especially the Middle Corridor, to its advantage. At the same time, Azerbaijan is strengthening ties with Turkey, Central Asia, Russia, Iran, the US and other countries in order not to become dependent on any one power and to be an important intermediary/"middle power" in the region.

Trade in the South Caucasus

The trade turnover of the South Caucasus region during the first seven months of this year amounted to 57,453.1 million dollars, with exports amounting to 29,370.2 million dollars and imports to 28,082.9 million dollars. In the same period of the previous year, foreign trade turnover amounted to 54,095.5 million dollars. Accordingly, in the January-July period, the region's foreign trade increased by 6.2%.

During the first seven months, Azerbaijan’s share in trade turnover was 52.9%, while Georgia’s and Armenia’s shares were 27% and 20.1%, respectively.

Anaklia — A New Gateway to the Middle Corridor

Dredging works are actively underway at the Anaklia Deepwater Port. Two Jan De Nul dredgers — Al-Idrisi and Tristao Da Cunha — are working together, as a result of which the depth of the water area will increase to 17.5 meters. In parallel, a 1,376-meter breakwater is being built, which will allow the port to receive large-capacity vessels. The work is progressing according to plan.

The first stage of the project is scheduled for completion by 2029, as a result of which the port will have an annual throughput capacity of at least 600 thousand TEU, and by 2035 this figure should increase to at least 1 million TEU. The main economic significance of the project is to increase Georgia’s transit potential, cargo turnover and regional logistics role.

Black Sea Petroleum

The Kulevi refinery is no longer dependent on Russian crude oil, which reduces the company’s risks associated with sanctions and opens the way to international markets. The European Union also included the refinery in its 21st package of sanctions against Russia, but set a six-month period before the sanctions were imposed to refuse Russian oil. Kulevi has finally replaced Russian oil — first with Kazakh, and now with Libyan, and since August 23, the refinery has been operating only on non-Russian raw materials.

Opportunities for the Middle Corridor

In 2025, container traffic on the Trans-Caspian International Transport Route (TITR) increased by 36% to about 77,000 TEU, while total freight traffic decreased from 4.48 million to 4.12 million tons. The World Bank estimates that, with the necessary investments and reforms, the Middle Corridor could triple its cargo volume by 2030 and halve transit times. To this end, the European Union and international financial institutions have pledged to mobilize €10 billion for sustainable transport links in Central Asia.

The main challenge for the corridor is to ensure the smooth operation of all links along the route. The Caspian Sea section is particularly important, where increased cargo volumes require additional ships, while falling sea levels and adverse weather conditions complicate port and maritime operations. In response, Kazakhstan, Azerbaijan and other participants are increasing their port and maritime capacities. The first phase of the new Aktau container hub has an annual capacity of 140,000 TEU, while the combined capacity of the Aktau and Kuryk ports is about 22 million tons. In 2022–2025, container transit through Kazakh ports on the TITR increased by 3.8 times.

The development of railway infrastructure is also important. In Georgia, the modernization of the Tbilisi-Makhinjauri main railway line increased annual capacity from 27 million to 48 million tons. The Baku-Tbilisi-Kars line became fully operational on June 2, 2026, increasing its annual freight capacity from 1 million to 5 million tons. Turkey is also modernizing the Divrig-Kars-Georgian border line, with the goal of increasing capacity to 20 million tons. The port of Baku continues to expand and develop its railway infrastructure.

Digitalization and coordination of participating countries are also important for the competitiveness of the Middle Corridor — integrating information systems, accelerating customs and transport procedures, and ensuring the smooth movement of cargo. The effectiveness of the corridor depends not only on the development of infrastructure, but also on the coordinated work of railways, ports, sea fleets, customs systems and digital platforms. Kazakhstan, Azerbaijan and Georgia have also developed joint action plans in this direction.

The number of employees at Georgian Railways has decreased

In 2020–2025, the number of employees at Georgian Railways decreased by 13%. In addition, the age structure of employees at the company remains a challenge - only 7% of employees are under 30 years old, while people aged 50 and older make up 54% of the staff.

According to the “Transport Corridor Research Center”, one of the reasons for the staff reduction is named as remuneration and working conditions. In 2020–2025, the average salary increased from 1,135 to 1,829 GEL, although inflation during the same period amounted to 40%. The center also indicates that the cargo turnover per employee in Georgian Railways lags behind the indicators of other countries.

According to the TCRC recommendation, personnel optimization should coincide with technical re-equipment and the introduction of new technologies in order to increase railway productivity and reduce the risk of staff shortages.

Iran activates the energy potential of the Caspian

Tehran considers the Caspian Sea as an important strategic and economic space, which creates an opportunity for the country to connect with the markets of Russia and Central Asia and strengthen the North-South transport corridor. Iran is trying to form Caspian ports, railways and southern ports into a single transit network, which is especially important in the context of Western sanctions and restrictions on existing trade routes.

Iran emphasizes the importance of Caspian energy resources and directly mentions the Baku-Tbilisi-Ceyhan (BTC) oil pipeline and the Southern Gas Corridor, which highlights Georgia’s strategic role. Tehran’s message should not be perceived as a direct threat to the BTC; rather, Iran is presenting its territory as an alternative to the existing routes through Georgia for Caspian energy and transport flows.

Middle Corridor

Kazakhstan is developing transport engineering to maximize the potential of the Middle Corridor. Locomotive manufacturing has already become a significant industry in the country: the plant produces about 120 locomotives per year, and the products are exported to several countries in the region. In addition, a $4.2 billion contract signed with Wabtec is aimed at modernizing Kazakhstan’s railway infrastructure and strengthening the country’s transit role.

The Transport Corridor Research Center’s focus on Georgia’s capabilities: While Azerbaijan is developing shipbuilding and Uzbekistan is developing warehousing infrastructure, Georgia is still limited mainly to the function of a transit conduit. It is important for the country to develop additional services within the middle corridor — production, technical service, repair and logistics centers — in order to receive additional economic benefits along with transit.

Armenia-Iran Corridor

The Armenian government has approved a protocol to launch a “simplified customs corridor” with Iran. The new regime aims to simplify trade and expedite the movement of goods between the two countries. The program aims to reduce customs controls and mandatory documentation for law-abiding companies, reduce border delays, and reduce operating costs for carriers.

Armenia’s exports to the EU

The Council of the European Union has approved temporary trade liberalization measures to support the Armenian economy. The new regime will exempt around 80% of Armenia’s exports to the EU from trade restrictions, aiming to improve access to the European market for Armenian products and strengthen EU-Armenia trade relations. The agreement also includes conditions and safeguards to ensure that increased imports do not harm EU producers.

Who will build the Tsitsamuri-Avchali tunnel?

The 7.3-kilometer Tsitsamuri-Avchali section of the Tbilisi bypass will be built by the China Railway Tunnel Group (CRTG). The project costs GEL 499.1 million and is scheduled to be completed in 36 months. The company is already operating in Georgia. CRTG is involved in the construction of the 9-kilometer Kvesheti-Kobi tunnel, the contract for which is worth 902 million GEL. It is also building a 4.5-kilometer section of the Stepantsminda-Gveleti road, the cost of which is about 215 million GEL. CRTG is a Chinese state-owned company founded in 1978, which specializes in the construction of tunnels and other complex infrastructure projects.

TRACECA and AGTL strengthen cooperation

In Baku, the TRACECA Permanent Secretariat held a meeting with representatives of the customs authorities of Azerbaijan and the Association of Logistics Companies (AGTL). The parties discussed the development of the Middle Corridor, the transit role of Azerbaijan and the strengthening of regional transport links. AGTL representatives are also invited to an international seminar scheduled for September 7 at the TRACECA Permanent Secretariat. IGC TRACECA

Georgia-Japan Cooperation

The Ministry of Economy and Sustainable Development of Georgia has signed a Memorandum of Cooperation in the field of digitalization with the Digital Agency of Japan. The agreement envisages sharing experience in digital technologies, joint implementation of specific projects and activities, and development of digital governance. The cooperation is particularly important within the framework of Georgia’s 2025–2030 Digital Economy and Information Society Development Strategy, one of the priorities of which is the improvement of citizen-oriented digital public services.

Poti Port’s cargo turnover increased — APM Terminals’ data for the first 8 months of 2026

Containers: 464,605 ​​TEUs were handled in January-August, which is 7.5% more than in the same period last year.

Container ships: The port received 291 ships, compared to 239 in 2025.

General cargo: 297,361 tons were handled, which is a 55% increase year-on-year.

Ferry cargo: The volume amounted to 143,454 tons, compared to 113,060 tons in the previous year.

The summer season was particularly active: in June-August, container volume increased from 176,272 to 187,524 TEU, and general cargo from 62,733 to 136,504 tons — that is, more than doubled.

The Poti New Port project is entering a new stage. The deadline for fulfilling the investment obligations of PACE Group has been extended until September 2028. The investment volume of the second phase of the project is $130 million, including $75 million in financing from the US DFC. The project envisages the development of a new berth and a bulk cargo terminal. The goal is to increase the annual cargo turnover of the Poti port from 3 million to 5 million tons, which will contribute to strengthening the role of the Poti port in the transport and logistics infrastructure of Georgia.

TRACECA.GE