By Nariman Gizitdinov
Kazakhstan’s national railroad operator is expanding its track and infrastructure to meet growing demand for transporting goods between China and Europe as trade flows shift in response to the Iran war.
The situation around the Strait of Hormuz and the escalation in the Middle East is leading to an increase in volumes, Talgat Aldybergenov, Chief Executive Officer at Kazakhstan Temir Zholy, said in an interview last week. “Chinese clients have become more interested in shipping by land rather than by sea because of reliability and predictable delivery times.”
The reshaping of trade traffic underscores the growing importance of the so-called Middle Corridor, the Trans-Caspian rail route linking China and Europe. The more than 4,250-kilometer (2,640-mile) rail track runs through several countries, including Azerbaijan, Georgia and Turkey, with Kazakhstan accounting for the longest stretch.
The route’s significance in global shipping has already increased since the Kremlin sent troops into Ukraine in 2022, prompting many to avoid rail links passing through Russia. Cargo volumes along the Middle Corridor have surged roughly tenfold since then, according to UK based Abrdn Investments Ltd.
Trans-Caspian International Transport Route Connects China With Europe Through Rail and Ferries
Source: The Trans-Caspian International Transport Route Association
Kazakhstan has made transport logistics a strategic priority, turning the national railway into a key transit operator. KTZ’s total investment in infrastructure development is expected to reach $10 billion by 2030, with about half of that already spent, according to Aldybergenov.
Kazakhstan Temir Zholy, known as KTZ, is building 900 kilometers of railway lines this year including a new 300-kilometer Ayagoz-Bakhty route to China that will create the country’s third rail border crossing with its eastern neighbor. Once the projects are completed, rail capacity between Kazakhstan and China is expected to reach 100 million tons by 2030, up from about 55 million tons currently, Aldybergenov said.
Expansion along the Middle Corridor is also accelerating rapidly. In the first quarter, the route handled about 173 trains, each carrying 55 containers with various types of cargo. The target for the full year is 600 trains, and the figure could rise by as much as 67% next year, according to KTZ’s chief.
The railroad company, which is considering listing its shares in London or Hong Kong as soon as this year, identified the Caspian Sea as one of the main bottlenecks along the Middle Corridor due to a shortage of vessels. To address this, KTZ is spending more than $100 million to buy six ships, including four to be built by China’s Jiangsu Hantong Group and two by Azerbaijan’s Baku Shipyard, with deliveries starting next year, Aldybergenov said.
The ships are needed to transport cargo across the Caspian Sea from Kazakhstan’s ports of Aktau and Kuryk, now controlled by KTZ, to Baku, before goods continue onward through Georgia and across the Black Sea to Europe. China Railway Container Transport Corp is partnering in the expansion to boost cargo volumes.
Kazakhstan has signed long-term agreements with the US’s Wabtec and France’s Alstom for locomotive deliveries, including 300 units from the American manufacturer over the next decade, as the country seeks to avoid shortages and expand rail capacity. KTZ has also signed contracts with a Chinese company for the delivery of 270 locomotives.
KTZ is expanding its terminal capacity in both China and Europe, too. The company acquired a terminal at the port of Xi’an in 2020, giving it access to a hub that generates about 40% of all container trains traveling from China to Europe through Kazakhstan.
It is now in talks to acquire container terminals in Romania, Hungary and Germany, while also exploring a joint project in China’s Chengdu province that would combine investment in a Chinese terminal with the construction of an agricultural container hub in Kazakhstan’s Kokshetau to boost exports to China, according to Aldybergenov.
Air cargo is seen as another promising area for expansion, and KTZ plans to acquire its first cargo aircraft by the end of the year while preparing a broader development plan for additional purchases over the next three years, Aldybergenov said.
Separately, Kazakhstan also serves the so-called North-South route between Russia and Iran, although traffic has recently declined, Aldybergenov said. Meanwhile, container traffic between China and Iran through Kazakhstan more than quadrupled in 2025 to about 4,600 containers, with further growth expected this year, according to him.
— With assistance from Yuliya Fedorinova
Source: https://www.bloomberg.com/europe
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