International North South Transport Corridor (INSTC)PRESENTATION

Shankar Shinde FEDERATION OF FREIGHT FORWARDERS’ ASSOCIATION IN INDIA

COURTESYMinistry of Commerce & Industry

Ministry of External Affairs

Ministry of Finance

GOVERNMENT OF INDIA

26th Sept. 2018

INSTC Member Countries

Founder Members

INDIA IRAN RUSSIA

Other Members

REPUBLIC OF AZERBAIJAN

REPUBLIC OF ARMENIA

REPUBLIC OF KAZAKHSTAN

REPUBLIC OF KYRGYZSTAN

REPUBLIC OF TAJIKISTAN

REPUBLIC OF TURKEY

REPUBLIC OF UKRAINE

REPUBLIC OF BELARUS

OMAN

SYRIA

BULGARIA (OBSERVER)

INSTC

BAKU

AMIR ABAD

INCHEH BOROON

Bandar Abbas

ASTARA

ASTRAKHAN

SARAKHS

INSTC

CIS

THE NEW ROUTE 1

ROUTE 2

Amirabad

Bandar Anzali

RELEVANT DISTANCES FOR THE FUTURE

KANDLA

MUMBAI

CHABAHAR

MOSCOW

ТEHRAN

ASTRAKHAN

DELHI

ASTRAKHAN

MAKHACHKALA

AKTAU

TURKMENBASHI

NEVSHEHIR

ANZALI

BAKU

OLYA

Transport links of the Astrakhan water transport port hub

5 Countries

4

1. TURKMENISTAN

2. AZERBAIJAN

3. RUSSIA

4. IRAN

5. KAZAKHSTAN

Rail Challenges

Break-of-gauge and options

Transshipment/Transfer

Bogie changing

Use of wagons with variable-gauge bogies

Dual gauge

Uni gauge

World mapping of Rail Gauges

North –South Corridor

advantages

Asian and European countries could make their cargotransportation through North-South Corridor with double speedcompared to Suez channel,

Carriage cost is 30% less, Transit 40% Shorter

A few countries exist along the route therefore (less bordercrossings and easier for the countries to reach agreements),

The route has few discontinues points, resulting into transloading.

The railway and using train is emphasized.

Intergartion and supplementing other Corridors

Recommended by international organizations: UN,UIC and ECO.

EURASIAN ECONOMIC UNION :

RUSSIA, BELARUS, KAZAKHSTAN, ARMENIA, KYRGYZSTAN

CUSTOMS UNION - ADVANTAGES

FREE TRADE AREA

No Tariff between Members

No External Tariff( Checks on Country of Origin

Can Negotiate Own Trade

CUSTOMS UNION

NO Tariff

No Border Check

Common External Tariff

Trade Deals for whole customs Union

SINGLE MARKET

Common External Tariff

Freedom of Movement goods and People

Common rules and Regulations

REGIONAL CONNECTIVITY

CENTRAL LOCATION ADVANTAGE

ASIA - EUROPE

IRAN – TRANSIT HUB

IRAN - AZERBAIJAN – RUSSIA & GEORGIA

IRAN – ARMENIA – GEORGIA

IRAN TURKEY

Infrastructure

Operations

Advantages

Warehousing ( Reefer /Perishable Cargo )

Customs Union – On time delivery

Advantage : The new “Rail Baltic project” ,

Estonia ,Lithuania partner co-operation to link

Baltic countries

EASE OF TRANSIT PROCESS

DOCUMENTATION

CMR -

TIR has eased the process and cargo can move on single

documentation

L/C conditions – by Importers ./ Banks Acceptance

BANKING PARTICIPATION - Remittances due to sanction .

COMPLIANCE

Sanitary / Quarantine / Drug Controller Testing & NOC process

ROUTE OPTIONS –

MEMBER S / NON MEMBERS COUNTRIES both can utilise the routes

Help to raise volume for regular Rail movements

SAFETY OF CARGO

There is smooth movement of cargo transportation on regular basis

Insurance facilities available for transit cargo

CHALLENGES - TRADE

Trade

Gain Confidence & Willingness for Participation

Government Support

Banking Channels

Insurance

Shipping Support ( vessel operators)

PSU sector to operate on INSTC route

Issuance of Visa

Single window operators

CHALLENGES – LOGISTICS

Limitation of shipping Lines

National Shipping Lines should regularly operate on the sea

route of India - Iran

NVOCC ( Non Vessel Owner Common Carriers) operators

participation

MTO ( Multimodal Transport Operators)participation

Majorly SOC ( Shipper own container ) operation ( high cost of

containers)

Slot Arrangements rates are higher than regular COC.

Volumes for feasibility and break even in rail transportation.

Logistics Partner Remittances Challenges.

OPERATIONAL CHALLENGES – TRADE / LOGISTICS

LACK OF LOGISTICS PARTNERS PARTICIPATION

REGISTRATION OF IMPORTERS /EXPORTERS AT RUSSIAN

PORTS

AVAILABILITY OF CONTAINERS & RETURN CARGO

CONTAINERISED CARGO V/S. BULK CARGO

CASPIAN SEA REGULAR OPERATIONS

RAIL/ TRANSPORT SERVICE PROVIDERS AT RUSSIA

CASPIAN SEA

PROMOTION OF PORTS ON CASPIAN

WAY FORWARD

Technology :Common IT platform – tracking

• (GPS/RFID) enabled

Seamless movements

• Single window with other agency drug control /

quarantine clearances.

Connectivity V/S. Speed

Integration of Corridors ,

• Supplementing rather than Competing

• TIR Accession

AWARENESS AND PROMOTION

Trade promotion and participation

Aligning infrastructure

Competitive and consistence services

Expertise of logistics partners

Reliability , security , safety measures

International railway co-operation

Harmonization of customs cross

border clearances operation /

processes.

1. There is a need to have a common facilitation cell in each country

2. The cell should consist of Logistics council, Shipping council,

legislative and legal, trade council.

3. All the cells should be centrally connected thru the INSTC website

and update the knowledge bank as well as resources/opportunities

time to time.

4. All councils should consist of government as well as trade

members and some experts/consultants on the panel to ensure

unbiased growth.

Common Implementation by all countries

The Future Connectivity

Ministry of Commerce & Industry ,Ministry of External Affairs, GOVERNMENT OF INDIA

shankar.shinde@globalbm.comMb : +91 9321473101