The Port of Baku Facilitates Trans-Eurasian Commerce (Part One)

Executive Summary:

• Azerbaijan has launched the second phase of the Port of Baku’s expansion, aiming to support its growing role in transcontinental trade as the region seeks alternative routes to Europe.
• Regional instability and Western sanctions on Russia due to its war against Ukraine have increased the importance of the Middle Corridor, which passes through the Port of Baku, as a vital trade route.
• Increased collaboration with the European Union, the People’s Republic of China, and other regional players, along with infrastructure upgrades and digitalization initiatives, is transforming the Port of Baku into a key transport hub.

In December 2024, Azerbaijani President Ilham Aliyev authorized a $12 million investment into the Port of Baku to initiate the second phase of its expansion. This phase aims to increase the port’s annual cargo capacity from 15 million to 25 million tons (Interfax, December 25, 2024). The region’s ongoing geopolitical instability, largely due to Russia’s full-scale invasion of Ukraine and the ensuing Western sanctions, has disrupted its established trade routes (Journal of Transport Geography, May 2025). These geopolitical upheavals underline the importance of Azerbaijan’s position between Europe and Asia as a transit state via the Port of Baku. Azerbaijan’s flagship port is capitalizing on its strategic location along the Silk Road to become a key hub for east–west connectivity.

The Middle Corridor (or the Trans-Caspian International Transport Route), which passes through Azerbaijan, has gained prominence as the only viable land trade route between the People’s Republic of China (PRC) and Europe that bypasses Russia (Geopolitical Monitor, November 8, 2022; see EDM, January 28). As disruptions to the Northern Corridor push Eurasian countries and businesses to seek alternative trade routes, the Middle Corridor route via Baku has emerged as a crucial lifeline (see EDM, April 19, 2022).

Located on the western shore of the Caspian Sea, the Port of Baku has been a nexus for trade in recent years (Trend News Agency, February 4). Along with regional and global partners, Azerbaijan is transforming the Port of Baku into a sustainable connectivity engine. The Azerbaijani government undertook a major relocation and development project for the Port of Baku in the 2010s. The port facilities in downtown Baku, constrained by limited capacity, were replaced by a new port complex in Alat, approximately 70 kilometers (43.5 miles) south of the capital, offering room for growth (Port of Baku, accessed April 21). In May 2018, Aliyev inaugurated the new Port of Baku in Alat, which spans an area of 400 hectares (approximately 1.5 square miles) (Port of Baku, accessed March 26). The first development phase increased Baku’s annual handling capacity to 15 million tons of cargo, including 100,000 twenty-foot equivalent unit (TEU) containers. The port also established state-of-the-art ferry terminals, rail connections, storage facilities, and a free trade zone, transforming it into a full-fledged logistics hub (AzerNews, February 5; Port of Baku, accessed April 21).

The second phase of expansion announced by Aliyev in December 2024  aims to boost the port’s annual capacity to 25 million tons of cargo and 500,000 TEUs with ongoing efforts in project management and financial planning for this future development (REPORT, December 18, 2024; Port of Baku, accessed March 26; AzerNews, April 9). The expansion plan includes constructing new container terminals, additional berths, and improved rail intermodal facilities to accommodate increasing trade volumes. If logistical bottlenecks along the Middle Corridor are resolved, further expansion could triple the port’s container capacity by 2035 (Port of Baku, 2022).

The Caspian Sea’s ferry network is crucial in facilitating regional trade and transit. According to Port Economics Management, the annual transportation capacity of Caspian ferries is estimated at approximately 95,000 railway wagons or 4.5 million tons of cargo (Port Economics Management, accessed March 26). According to the latest available update, 25 rail ferries (designed to transport railway vehicles) and 10 Ro-Pax ships (passenger ferries with cabins and roll-on/roll-off capacity for vehicles) operate along the Middle Corridor (CAREC Program, May 22, 2024). One of the most remarkable developments at this multimodal port has been the sharp increase in container handling capacity. In 2024 alone, the port managed 76,775 TEUs, reflecting a 73 percent rise compared to 2023. The increase has been attributed to improved operational efficiency and infrastructure upgrades to the port’s capacity (AzerNews, January 15). 

Beyond container operations, the port has also seen growth in handling wheeled vehicles, railway wagons, and dry cargo. In 2024, the total number of wheeled vehicles received and dispatched was 58,169 units, an increase of 7.2 percent compared to 2023 (AzerNews, January 15). This growth indicates a rising demand for roll-on/roll-off (Ro-Ro) transport services, which are crucial to facilitate trade in automotive goods and machinery. Meanwhile, the volume of dry cargo handled exceeded 1,044,000 tons in 2024, while the number of wagons processed surpassed 37,515 units (AzerNews, January 15).

The rise in cargo handling at the Port of Baku is driven by multiple factors, including ongoing infrastructure development, enhanced regional cooperation, and increased demand for alternative supply chain solutions amid disruptions in traditional routes (see EDM, February 19). Investments in modernizing ports, railway networks, and logistics hubs across Azerbaijan, Kazakhstan, and other key transit countries are expected to further bolster the efficiency and capacity of the corridor in the coming years. The World Bank and the International Bank for Reconstruction and Development (IBRD) have forecasted that by 2030, the volume of cargo transported via the trans-Caspian route could soar to 11 million tons, signaling a long-term expansion of the route’s role in regional and intercontinental trade (Asia Development Bank Institute, 2024).

The ability to sustain east–west trade flow makes Azerbaijan a strategic partner for major powers, from the European Union to the PRC. This is evident in new collaborations, including the European Union’s Global Gateway initiative to invest in Middle Corridor infrastructure and digitalize transit standards (EU Reporter, February 2, 2024). In 2024, the China Railway Container Transport Corp. Ltd. (CRTC) joined the Middle Corridor Multimodal LLC, a joint venture established by Azerbaijan, Georgia, and Kazakhstan (Caspian News, September 25, 2024; The Times of Central Asia, October 2, 2024; see EDM, October 28, 2024). According to CRTC, joining the joint venture will “contribute to an increase in the volume of cargo along the Middle Corridor” (Trend News Agency, September 19, 2024).

PRC engagement in developing activities at the Port of Baku has been a trend for a while. Beijing has already allocated grants of approximately $70 million to the Port of Baku and provided technical equipment worth around $2 million (1 NEWS, September 5, 2019; Baku Dialogues, October 20, 2022). Moreover, key PRC international seaports, including those in Guangzhou and Lianyungang, and multinational conglomerate COSCO Shipping, signed cooperation agreements with the Port of Baku in 2018 to expand international partnerships (AZERTAC, May 9, 2019). Moreover, employees of the Port of Baku have participated in government-sponsored training programs in various cities across the PRC as part of broader inter-port agreements (Facebook, May 28, 2018).

In April 2023, the Port of Baku and Qingdao Port, one of the PRC’s largest ports, agreed to collaborate on implementing advanced digital solutions and emerging technologies to foster technological growth and improve port operations’ efficiency, security, and competitiveness. The agreement also includes provisions for mutual visits and exchange programs to facilitate knowledge sharing. Most importantly, the agreement enables the transportation of cargo from Japan and South Korea via Qingdao Port through the Port of Baku using the Middle Corridor (Port of Baku, April 18, 2023; Port News, April 21, 2023).

The Port of Baku is rapidly becoming a key hub for east–west trade, driven by strategic investment, rising cargo volumes, and growing international partnerships. As the Middle Corridor gains prominence amid the development of alternative trade routes in the region, Baku’s continued expansion of its transport infrastructure makes it a vital link in Eurasian connectivity.