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EghtesadOnline: The seventh cargo train from China arrived at Iran’s Inche Borun border station in the northeastern Golestan Province on May 22 after passing through Kazakhstan and Turkmenistan, the deputy head of the Islamic Republic of Iran Railroads said.

“The freight train was loaded with 50 containers measuring 40 feet each. Previously, six other such cargo trains entered Iran, the first one through Sarakhs border crossing and the other five through Inche Borun,” Babak Ahmadi was also quoted as saying by the news portal of the Ministry of Roads and Urban Development on Thursday.

The first-ever train travelling the long route from China to Iran set off from Yiwu City in China’s Zhejiang Province on Jan. 31, 2016. It covered 10,399 km, passing through Kazakhstan and Turkmenistan, to reach the border station of Sarakhs in Iran’s Khorasan Razavi Province after 14 days.

The second freight train departed from Yinchuan South Train Station on Sept. 5, 2017, carrying some 560 tons of cargo, including mechanical equipment, ceramic tableware, crystalware and automobile accessories, worth around $1.6 million, according to Financial Tribune.

The third, fourth and fifth cargo trains from China arrived in Iran in mid January. The first of the three, carrying fifty containers of 40 feet each left China’s island province Hainan on December 28. 

The second and third set off on December 30 from Incheon Port and Shiyan in northwestern China respectively, each loaded with 41 forty-foot containers. The sixth train also reached Iran in late January.  

Mostafa Davoudi, a former deputy of IRIR, told Financial Tribune in January that Iran-China trade is carried out through multimodal transport, the lion’s share of which is carried through sea. 

Sea transport is cheaper at first glance compared with other means of transport. 

Yet, Davoudi said, it has many covert expenses that don’t meet the eye before the procedures are gone through. Examples of such hidden expenses include demurrage fees for ships, warehouse fees, the costs of unloading the ships and loading trucks or trains.

In the case of Iran and China, marine transport of goods takes between 45 and 50 days.

“Rail transport is spared from all this hassle. A train sets off from a station in China and delivers the goods at a station in Iran. The expenses of a multimodal transport system are non-existent in this corridor and the delivery duration is reduced by a third. This means goods can enter the production chain in a shorter period,” he said.

   Expanding Corridor to Major Transit Route

The rail corridor is currently being used to transfer goods between Iran and China only. But IRIR is looking to turn it into a transit route among the countries along the way and beyond. 

“We are planning to transit goods from China to Europe. The value of commodities exchanged between China and Europe stood at €520 billion in 2016. We aim for part of these goods to be transited through Iran in the near future,” Davoudi said.

“The transit of goods generates two and a half times as much value added as just transporting them into the country. Iran has this capacity and we are positive that this corridor will get off the ground quite soon.  

In this regard, we are in talks with countries along the way, including Azerbaijan, Turkey, Germany, Georgia, Poland, Ukraine, Uzbekistan and Tajikistan.”

The route, better known as the New Silk Road, a 2,300-kilometer Chinese railroad that links Urumqi, the capital of China’s western Xinjiang Province, to the Iranian capital Tehran, connecting Kazakhstan, Kyrgyzstan, Uzbekistan and Turkmenistan along the way, was first proposed by He Huawu, the chief engineer of China Railway Corporation, in late 2015.

From Tehran, the grand project will join Iran’s the East-West network leading to Turkey and Eastern Europe. It could also open a way to Europe via a developing rail route from southern Iranian ports to Azerbaijan and Europe.

The Belt and Road initiative, proposed in October 2013 by Chinese President Xi Jinping, includes several corridors through land and sea, including the New Silk Road rail route, which will serve as a tailwind for the transport of goods and energy between Iran and China.

The two sides have set a long-term bilateral trade target of $600 billion a year.

 

Chinese Cargo Train