Strategic Development Directions of Azerbaijan Railways until 2030

Azerbaijan Railways Strategic Development Directions - 2030

On February 16, 2024, the Supervisory Board of Azerbaijan Railways approved the company's Strategic Development Directions. This comprehensive plan, developed in collaboration with the international consulting firm McKinsey & Company, outlines three strategic directions, nine strategic programs, and a total of 36 strategic initiatives, with each program comprising two to seven initiatives.

1st Direction

The first direction aims to achieve financial sustainability by increasing operational efficiency. This includes:
optimizing freight capacity and utilization rates through new approaches in technical service;
reducing the scale of inefficient operations, and utilizing potential support for infrastructure.

2nd Direction

the second direction focuses on continuously increasing the volume of freight transport through market focus, enhancing service quality, and expanding commercial potential. This includes:
paying more attention to transit and domestic trade, especially the "East-West" and "North-West" corridors, to gain more potential from the China-Turkey and Russia-Turkey trade by maintaining market position in exports and imports;
utilizing regional partnerships with other railways and modes of transport to create trade synergies;
initiatives to increase market orientation by creating direct sales opportunities and establishing competitive/dynamic tariff mechanisms.

3rd Direction

The third direction focuses on critical driving factors. This includes:
meeting commitments to ensure security and protection through regional and future global partnerships;
continuously fulfilling environmental commitments and reducing ecological impacts;
initiatives aimed at digital transformation to ensure accountability across business segments through virtual reporting and addressing needs.

Strategic Goals:

- Leverage Azerbaijan's strategic position within the "East-West" and "North-South" international transport corridors.

- Play a key role in establishing Azerbaijan as an international transport hub.

- Target a 2-4x increase in annual transit shipments by 2030, aiming to grow from 6.8 million tons in 2023 to 15 million tons—or up to 30 million tons if the "North-South" corridor expansion project is fully realized.

The broader goal is to raise total shipments from 18.2 million tons to 30 million tons, potentially reaching 43 million tons with the project's success.

The goal for passenger transportation is to increase annual ridership from 7.2 million in 2023 to 15 million by 2030, reflecting the rapid growth in the country’s mobility.

Azerbaijan Railways’ Strategic Focus Beyond 2030

After 2030, Azerbaijan Railways will prioritize providing high-quality, innovative services to boost transit shipments, focusing on:

- Regional Distribution and E-Commerce Services: Establishing an e-commerce center offering electronic invoicing, call center support, insurance, and returns management.

- Supply Chain Center Services: Adding value to transit goods through agricultural processing, fertilizer production, cold chain logistics, and electronics manufacturing.

- Exporting Transport Services: Expanding transit commercial activities with terminals, cargo handling, 3PL services, and asset consolidation.