Georgia's Transport Corridor: Analyzing Cargo Turnover and Its Implications

In the period of January-March 2023, the total amount of cargo transported by Georgia's transport sectors reached 9.5 million tons, marking a 2.4% increase compared to the same period in 2022. Mikheil Namadov, co-founder of Kairos Logistics, recently shared his perspectives on the industry's performance, challenges, and future prospects during an interview on the Businesspartner show.

Namadov's insights shed light on the factors influencing Georgia's transport sector and provide valuable insights into strategies for overcoming obstacles and seizing opportunities. This article delves into Namadov's observations, offering a comprehensive analysis of Georgia's transport industry and its trajectory for growth.

Analyzing a Passive First Quarter and Market Dynamics: During the interview, Namadov reflects on the relatively passive first quarter in the transport sector. Despite the subdued performance, he emphasizes that the figures from the previous year were impressive, instilling confidence for continued growth in the sector. He also notes that several factors have influenced the market dynamics, including a small recession in Europe and reductions in domestic shipments. These factors have led to a decrease in tariffs, resulting in market stabilization. However, market remains cautiously optimistic about expecting the same level of growth in the current year, highlighting the need to consider various factors when assessing future prospects.

One of the challenges faced by the transport sector is the issue of queues at border checkpoints. Waiting times have significantly improved, attributing this to the decrease in cargo flow rather than drastic changes in infrastructure or transit policies. Additionally, he highlights the impact of the Ukrainian conflict, which diverted a substantial amount of cargo solely towards Georgia. To navigate this obstacle, Namadov emphasizes the importance of establishing alternative land-based transportation routes to circumvent the conflict zone.

Infrastructure concerns are another area of focus for the transport sector. He mentions the congestion and increased tariffs that occurred at the Poti terminals in the early stages of the Ukrainian conflict. He stresses the need for improved infrastructure, including the creation of designated warehouse areas and better utilization of underutilized territories. Namadov also expresses optimism about the upcoming construction of the Anaklia port, which is expected to enhance productivity and attract more transit cargo, thus bolstering the appeal of Georgia's transport corridor.

Looking ahead, the opportunities for growth and development in the transport sector, he reveals Kairos Logistics' plans to build a logistics center, which will serve Georgian entrepreneurs and attract transit cargoes for processing and distribution, particularly in Central Asia and Azerbaijan. Namadov underscores the importance of coordination between customs bodies, particularly in Azerbaijan and Turkey, to streamline transit for cargoes. He also emphasizes the need for faster ferry operations and the establishment of a "green corridor" concept to facilitate efficient trade.