CAREC, ADB prepare recommendations for digital transformation of Azerbaijan's logistics sector along Trans-Caspian route

Digital modernization of transport corridors is becoming a defining factor in boosting the competitiveness of the international logistics industry, Report informs, citing a joint study by the Central Asia Regional Economic Cooperation (CAREC) Institute and the Asian Development Bank (ADB).

International experts highly praised the pace of infrastructure and institutional transformations in Azerbaijan, according to the document.

At the same time, the report emphasizes that fully realizing the country's transit potential within the Middle Corridor (Trans-Caspian International Transport Route - TITR) requires transitioning from fragmented IT solutions to a cohesive national interoperable digital ecosystem.

According to the study, the primary focus of digital transformations in Azerbaijan's logistics sector is the national segment of the Middle Corridor.

This route connects the Baku International Sea Trade Port - the principal logistics hub on the Caspian Sea - with the Boyuk Kasik railway border crossing on the Azerbaijan-Georgia border.

CAREC experts noted that Azerbaijan has already built a solid regulatory and institutional foundation. The country operates under the State Strategy for Socio-Economic Development 2022–2026 and the Digital Development Concept, has established the AZCON (Azerbaijan Transport and Communications) Holding, and has entrusted transit process coordination to the Ministry of Digital Development and Transport with participation from the Coordinating Council on Transit Freight.

To overcome existing fragmentation between state entities and commercial market players, the CAREC Institute prepared a list of priority measures for the Azerbaijani government. First, it is proposed to accelerate the launch of the Digital Logistics Platform (DLP) based on the single window principle. The system should integrate information resources of Azerbaijan Railways CJSC (ADY), Azerbaijan Caspian Shipping CJSC (ASCO), and Baku Port, as well as ensure automated data exchange with the systems of the State Customs Committee (for accelerated advance declaration and the operation of the Risk Management System) and the State Border Service.

In addition, it is necessary to harmonize national legislation with international EU eFTI standards and UN recommendations to ensure full legal recognition of digital transport documents. It is also proposed to ensure a full-scale transition to electronic consignment notes: e-CMR (in road transport), e-SMGS (in rail communication), and the UN multimodal reference data model (UN/CEFACT MMT RDM), confirming the leading coordinating role of the Ministry of Digital Development and Transport of Azerbaijan and the Coordinating Council on Transit Freight in order to eliminate interagency barriers.

It is also recommended to use service-oriented financing models and public-private partnership mechanisms to ensure the development and operation of IT infrastructure. Furthermore, it is proposed to form a single round-the-clock system of satellite and digital tracking of the movement of containers and vehicles along the entire length of the Azerbaijani section of the TITR route, deploy a Public Key Infrastructure (PKI), and implement Trusted Third Party (TTP) mechanisms ensuring mutual recognition of electronic digital signatures with customs and logistics authorities of Georgia, Kazakhstan, Türkiye, and EU member states (in accordance with eFTI regulations).

According to experts, it is necessary to prepare standardized open APIs for seamless integration of private information systems of shippers, freight forwarders, and logistics terminals with the DLP platform, using service-oriented financing models and public-private partnership (OMM/PPP) mechanisms to attract private capital into the creation and technical support of digital services.

Study authors believe creating a digital twin of the Azerbaijani section of the Middle Corridor will make it possible to minimize physical inspections and paper documentation at customs checkpoints, reducing border crossing times two to three-fold. This acquires particular importance against the backdrop of intensifying redirection of trade flows between Asia and Europe to the Trans-Caspian route.

"The creation of Azerbaijan's national logistics platform will serve as a connecting bridge between the digital systems of Central Asia and Europe," the CAREC study noted. "Without data synchronization and a shift to a unified electronic document, seamless multimodal transport speeds remain unattainable."