Azerbaijan is reinventing itself as a key Eurasian trade hub through a bold railway overhaul.

Over the past five years, Azerbaijan has undertaken a sweeping transformation of its railway infrastructure, positioning itself at the crossroads of Eurasian trade. Spearheaded by Azerbaijan Railways (ADY), the effort is as much about logistics as it is about national reinvention—advancing goals of economic diversification, modernization, and geopolitical clout. This overhaul is tethered to a broader vision: linking the strategic arteries of the Middle Corridor and the International North-South Transport Corridor (INSTC), and in doing so, embedding Azerbaijan at the heart of global commerce.

With geopolitical tensions redrawing trade maps across Eurasia and the Middle East—from sanctions regimes to war-driven supply disruptions—Baku’s urgency to reduce its dependence on fossil fuels has become a strategic necessity. Rail infrastructure has emerged as the scaffolding of this pivot.

Since 2022, Azerbaijan has witnessed a sharp uptick in rail freight. In 2024 alone, ADY moved more than 18.5 million tons of cargo. Transit shipments surged to 7.3 million tons, a 5.7% increase over the previous year, while imports grew by 10%, reaching 5.2 million tons. The East–West corridor, a central artery of the Middle Corridor, handled over 3.2 million tons. Such figures are not accidental—they are the result of calculated upgrades and deepening international coordination. ADY now operates over 1,000 block trains annually, made possible by targeted investments and robust diplomatic engineering.

Perhaps most emblematic of the domestic revival is the reconstruction of the Karabakh Economic Zone’s war-damaged rail infrastructure. Four new stations—Barda, Aghdam, Tazakand, and Kocharli—have risen from the rubble of the early 1990s conflict. The centerpiece of this restoration is the newly inaugurated Aghdam Railway and Bus Terminal Complex, unveiled in May. Designed to handle up to 1,000 rail and 1,500 bus passengers daily, the terminal is more than a logistics node; it is a symbol of return, resilience, and reinvestment in national unity.

The rebuilding of Karabakh and Eastern Zangezur is not merely physical—it is also economic in nature. The strategy aims to catalyze growth and attract both foreign and domestic capital, reinforcing the region’s place in Azerbaijan’s future.

The Middle Corridor and Global Realignment

As China recalibrates its Belt and Road Initiative amid mounting global tensions, the Middle Corridor—stretching through Central Asia and the South Caucasus—has become more than a backup plan. It is now a cornerstone of Beijing’s Westward ambitions. In this context, Azerbaijan’s strategic location and logistics capacity give it an outsized role.

After 2022, the geopolitical value of the Middle Corridor soared. The shocks to global supply chains—compounded by war, sanctions, and political fragmentation—have forced key players to reconsider their transit options. China responded by leaning in. In March 2024, a milestone was reached: the first block train from Xi’an to Baku completed its journey in just 11 days, a striking demonstration of what Azerbaijan now offers as a transit hub.

But this isn’t a one-player game. Central Asian nations, particularly Kazakhstan, are turning to the corridor to break free from legacy routes dominated by Russia. For them, Azerbaijan’s ports, rail terminals, and customs corridors offer faster and more secure gateways to Europe. The corridor’s appeal isn’t only about speed—it’s also about access to Central Asia’s deposits of rare earths, critical for everything from electric vehicles to national defense systems.

As demand for these resources intensifies, the corridor becomes a geopolitical magnet. China, Turkey, the EU, and the United States—despite their differences—share an interest in its development.

The Digital Track

The railway revolution isn’t just physical. Digitalization is turning rail into a high-tech enterprise. In 2024, ADY launched the “ADY Smart” platform and an online tariff calculator to bring transparency and speed to logistics. Singapore-based Global DTC PTE Ltd has added further muscle with its digital system, which enables real-time tracking across the Trans-Caspian International Transport Route (TITR).

The efforts caught the attention of the Asian Development Bank, which in September 2024 approved a $47 million loan to support ADY’s digital transformation. The funding targets enhanced safety, greater capacity, and smarter logistics. For a nation reimagining itself through connectivity, the integration of hard infrastructure with digital sophistication is not a luxury—it’s a requirement.

Zangezur Corridor and the Return of Strategy

If the Middle Corridor symbolizes East-West revival, then the Horadiz–Aghband railway speaks to a deeper, more local form of strategy. Launched in 2021, it is part of the broader vision to realize the Zangezur Corridor—a direct land bridge connecting mainland Azerbaijan with the Nakhchivan exclave and, ultimately, Turkey.

Spanning over 110 kilometers and comprising three tunnels, 47 bridges, and eight stations, the Zangezur railway is a marvel of postwar ambition. For Baku, it is a geopolitical stake in the ground—a way to cement influence in the South Caucasus, reclaim lost connectivity, and assert itself as a regional power.

Complementing this domestic assertiveness is Azerbaijan’s outward-facing infrastructure: the Port of Baku at Alat. Designed as a multi-modal hub, it is envisioned as the beating heart of the new Silk Road—a place where rail meets sea, and East meets West.

And while Baku’s gaze remains fixed on the Middle Corridor, it hasn’t lost sight of the North-South axis. The INSTC—linking India, Iran, Azerbaijan, and Russia—is a slower-burning but no less vital project. In May 2024, ADY completed the reconstruction of the Astara cargo yard to handle surging trade volumes. So far, multimodal shipments along the INSTC have flowed exclusively through ADY’s terminal in Astara, Iran.

The dual-track strategy is by design. Azerbaijan is not wagering on one route—it’s hedging wisely. By straddling both the East-West and North-South corridors, Baku maximizes transit revenue while avoiding overdependence on any single geopolitical partner.

A Calculated Ascent

Azerbaijan’s railway ambitions are not just about steel tracks or refurbished stations. They represent a deliberate reorientation of the country’s geopolitical and economic identity. In upgrading its logistics capabilities, digital platforms, and cross-border links, Azerbaijan is recasting itself as a Eurasian node that matters.

This transformation is not without risks. It unfolds in a region riddled with volatility—from war-torn neighbors to shifting alliances. Yet Azerbaijan’s calculated balancing act—between East and West, North and South—may prove to be its greatest asset.

In a world in search of new trade routes, Azerbaijan’s railways offer not only an alternative but a vision: a corridor of stability, speed, and strategy. Through disciplined investment and infrastructure diplomacy, Baku is not just connecting regions—it is redefining the routes of global trade.