The shifting of logistics routes due to global conflicts and border closures is already impacting transportation costs for Uzbekistan. Shokhrukh Gulamov, Acting Deputy Minister of Investment, Industry, and Trade, shared this update during the ADB annual meetings in Samarkand.

During his address to the Asian Development Bank, President Shavkat Mirziyoyev stated that the disruption of logistical corridors—stemming from global tensions and disputes—is driving up transport expenses for Central Asian nations by as much as 30%. Furthermore, delivery timelines are being stretched by several weeks.

Shokhrukh Gulamov confirmed that the rise in logistics costs is a top priority for the government.

"This is a critical issue. As a government, we are duty-bound to address these rising prices because they impact everything," he said.

The Deputy Minister noted that while the 30% increase depends on specific calculations and routes, the problem requires a comprehensive approach.

"What external factors are driving these price hikes? You've already identified them: the ongoing conflicts in the Middle East and Iran, as well as the border closures between Afghanistan and Pakistan," Gulamov stated.

He emphasized that while these corridors remain available to Uzbekistan, utilizing them has become significantly more complicated.

"These routes still exist; they haven't disappeared. However, current circumstances have created real hardships and obstacles. Given the situation in the Strait of Hormuz, we are seeing a massive shift and transformation of cargo and transport flows," the Deputy Minister noted.

According to Gulamov, the government is actively working to reroute cargo through alternative paths.

"We have been working on this issue since day one. We are aware of the situation and are strategizing on how to manage it. Of course, there are costs involved—the 30% increase is a ballpark figure that can be calculated in various ways," he said.

Gulamov identified food products, particularly meat, as the most price-sensitive goods. "Meat is a critical item that the government is watching very closely," he stated. To keep delivery costs down, the government is currently subsidizing 50% of air freight expenses for importers of beef and lamb.

Furthermore, he noted that Uzbekistan imports raw materials in large volumes, and supply chain routes for these goods are also under constant analysis.

"We naturally have a range of raw materials that we import in bulk. We have conducted analyses involving all partner countries; we know where everything originates and how to manage these flows. The government is taking all necessary precautions," the Deputy Minister added.

Gulamov listed the primary alternative routes currently in use or under consideration. The first is the western direction—known as the Middle Corridor—which runs through Kazakhstan, across the Caspian Sea, and through Azerbaijan, Georgia, and Turkey. Another variation reaches Azerbaijan via Turkmenistan.

The second alternative route, according to Gulamov, runs through China.

"We are utilizing the rail corridor from Chinese ports via Kazakhstan, passing through the Khorgos and Alashankou border crossings. For road transport, we use the route through Kyrgyzstan," he noted.

The third option involves the Russian port of Nakhodka.

"The third alternative is via Nakhodka. This was one of our very first corridors. While it takes a bit longer than the others, it remains a viable alternative that is currently being utilized," the Deputy Minister said.

He acknowledged that freight costs will continue to rise as long as regional conflicts persist.

At a meeting on April 24, the president pointed out that global oil prices have surged by 40% since the start of the year. Combined with the need to bypass traditional logistical corridors due to ongoing conflicts, transport costs for local exports and essential consumer imports have spiked by 25–30%.

To counter this, the head of state has ordered that inflation be kept within 6.5%. This is to be achieved by boosting local production, increasing meat imports, and smoothing out logistical disruptions.

Background

Iranian ports are vital logistical hubs for Uzbekistan. The country accounts for 5.5% of the traffic on the Central Asia–India corridor via Chabahar (INSTC) and 18.9% of the freight volume between Central Asia and Iran.

Minister of Transport Ilhom Mahkamov previously stated that Uzbekistan’s international trade relies on nine international corridors. A key route is the southern corridor through Iranian seaports, which handles a significant portion of exports and imports, including up to 60% of goods from Turkiye and Europe.

Should the Iranian route face further complications, authorities are considering rerouting cargo through Pakistani seaports, the Middle Corridor, or routes via Georgia, Russia, and Kazakhstan.

The situation is further exacerbated by the closure of the Afghanistan-Pakistan border. During a meeting between Vice Prime Minister Jamshid Khodjaev and business leaders in January, it was reported that the border has been closed since October 11. This blockade has severed another vital logistical artery, creating supply issues for specific commodities, including sugar.

This spike in transportation expenses is driving up the cost of both import and export operations, placing additional upward pressure on inflation.