Kazakhstan with more than 40% return year-to-date as the 8th best performing stock market in the world., is gaining the more attention of global portfolio investors. Trade flows and logistics also increasingly see the vast potential of Kazakhstan.
Amid covid related global supply chain bottle necks, Kazakhstan has made great strides to become a global logistics hub.
Key transport related infrastructure in Kazakhstan can help the country develop its strategic position at the junction of Europe and Asia. Kazakhstan, as the largest landlocked country, is located between the two largest players in the Eurasian space, such as China and Europe. Due to this geographical location, Kazakhstan is taking measures to increase its transit potential.
As the world turn more conscious of climate change risk, Kazakhstan’s global logistics role will only become more important.
Cargo Flights produce greenhouse gases - mainly carbon dioxide (CO2) - from burning fuel. These contribute to global warming when released into the atmosphere.
Aviation contributes about 2% of the world's global carbon emissions, according to the International Air Transport Association (IATA). Train virtually always comes out better than plane to safe the world from climate change, often by a lot.
Taking this into account the large-scale flow of goods, special attention is paid to the development of container transportation on the China-Europe route through Kazakhstan, which has increased fivefold over the past five years.
The serious disruption in the operation of air and sea transport due to the pandemic, as well as the crisis in the Suez Canal, gave an additional impetus to increase the market share of rail transit.
In such a difficult period, the railway has demonstrated the stability of railway tariffs and the reliability of transit cargo delivery times. And, as a result, since last year, shippers have massively begun to switch to shipping by container trains.
the transit of containers through Kazakhstan has already grown from 1-2.5 million containers per year to 2.5 million.
The advantage of container transportation, according to him, is obvious. Standardized multi-turn containers, speed of delivery, high safety of goods, relative cheapness of the transport cycle - all this increases the volume of cargo transportation by containers. More and more companies are switching to container transportation of those goods that were not traditionally considered suitable for containers.
Taking into account the growth of cargo flows between the main production regions (China and Southeast Asia) and the largest consumers (Europe and Central Asia), the main goal of Kazakhstan's transport policy remains the further development of the "New Silk Road" concept.
Nowadays, five main international transport corridors pass through the territory of Kazakhstan, which significantly reduce the distance and delivery time of goods in the East-West direction.
1. The Northern Corridor of the Trans-Asian Railway connects Western Europe with China, the Korean Peninsula and Japan through the territory of Russia.
2. The Southern corridor of the Trans-Asian Railway runs along the following routes: Southeast Europe — China and Southeast Asia through Turkey, Iran and Central Asian countries.
3. The North-South corridor connects Northern Europe and the Persian Gulf countries through Russia, Iran and Kazakhstan.
4. The central corridor of the Trans-Asian Railway is of great importance for regional transit traffic in the direction of Central Asia — North-western Europe.
5. TRACECA connects Eastern Europe with Central Asia via the Black Sea, the Caucasus and the Caspian Sea.
Currently, the operational length of railways in Kazakhstan is 14.8 thousand km, including 4.9 thousand km of double-track lines (33%) and 4.2 thousand km of electrified lines (28%).
Transport logistics can be one of the most profitable segments of the global economy. In developed countries, the share of transport logistics in total GDP reaches 13-14%.
In Kazakhstan, this figure in 2017 was 8%. One of the features of Kazakhstan's transport sector is high logistics costs, which are significantly higher than in developed countries. So, today in Kazakhstan, the share of transportation costs can reach 25% of the final cost of goods delivered, while the global average is 11%, in China - 14%, in the European Union - 11%, in the USA and Canada - 10%. This indicates the deterioration of Kazakhstan's transport infrastructure and the inefficiency of some logistics processes. To solve the problem, government measures are being taken to modernize the country's transport infrastructure and ensure its integration into the international transport system (including investments form top range global port and transport companies, which are extremely interested).
An important factor in the development of Kazakhstan's transit potential is the rapidly growing volume of mutual trade between the EU and China. Volume of foreign trade between China and the EU is expected to grow to 780 billion US dollars by 2020.
On July 20, 2021, a new transport terminal was opened in the Almaty region «Dostyk TransTerminal», which allows Kazakhstan to increase the transit of container trains from China to Europe. Including within the framework of the «Belt and Road Initiative», as well as the Kazakhstan program "Nurly Zhol" ("Bright Path").
Kazakhstan as a country is very welcoming to global investors and is open to all interested parties to participate in the development & digital transformation of its transport and logistics system of the Eurasian route, making it a potentially both a very profitable and sustainable partnership model.
