The global trade crisis has prompted new routes: UNCTAD

  • April 12, 2024
  • News

Recent global crises have led to significant shifts in trade routes, highlighting the increasing need for trade facilitation tools and digitalization to ensure the smooth flow of goods. Geopolitical developments in recent years have reshaped trade routes, resulting in a notable decline in freight flows through traditional routes like the northern Eurasian corridors since the onset of the conflict in Ukraine.

More recently, the Red Sea crisis has further disrupted east-west trade, prompting transportation companies to seek alternative routes once again. In response, new routes have emerged in recent years to facilitate east-west trade, but they require support. The Middle and Southern Corridors, connecting China and Central Asia via the Caspian Sea or Iran to Turkey and Europe, have become vital trade routes, reshaping global transport and trade dynamics. These corridors enable door-to-door road transport and the efficient integration of different modes of transportation.
In 2022, transit via the Middle Corridor experienced record growth in transit volumes, surging by 150% compared to 2021. Container turnover in the Caspian Basin witnessed a remarkable 5.5-fold increase within just one month, from December 2022 to January 2023. From January to August 2023, freight volumes from China to Europe along the Middle Corridor surged by 84% compared to the same period in 2022, surpassing 1.6 million tonnes.

Similarly, the Southern Corridor is well positioned to facilitate the flow of goods and east-west trade. Transport operations by Turkish operators from Turkey to Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan increased by an average of 44% from 2020 to 2023. For foreign operators, this figure rose by 86%.

Transportation from Lianyungang, China, to Turkey or EU countries via these corridors takes between 13 and 23 days, contrasting with the maritime route via the Suez Canal, which typically takes between 35 and 45 days.

The Red Sea crisis has exacerbated global trade and transportation challenges. Cargo ships are being rerouted around the southern tip of Africa to avoid the Red Sea, while other companies are opting for more direct road routes. Leveraging the UN TIR system, transport companies are rerouting shipments via countries in the Gulf Cooperation Council (GCC) region, bypassing the blocked maritime route by switching to trucks through the GCC region and the northern part of the Red Sea. Seaports such as Sohar and Salalah in Oman, and Jeddah and Dammam in Saudi Arabia, serve as the main ports of arrival where goods are transshipped and transported via trucks across the region before continuing their journeys by sea.

Numerous other routes are available to transport companies. For example, the Milton Group transported goods from Europe to the Middle East using TIR, crossing 13 countries in just nine days, compared to 40 days by sea.