The Rise of Multimodal Transport in the Middle East: How Iran Connects Rail, Road, and Sea

I.Executive Summary

The Middle East is rapidly emerging as a critical nexus in the global logistics landscape, strategically positioned at the intersection of major trade routes connecting Europe, Asia, and Africa. This region’s dynamic economic growth, substantial investments in infrastructure, and evolving trade policies have collectively established it as a pivotal player in global supply chains. Within this evolving landscape, Iran holds a unique and potentially significant position due to its strategic geographical location, which offers a vital land bridge connecting the resource-rich regions of the Middle East and Central Asia with the burgeoning markets of South Asia and Europe. This report provides a comprehensive analysis of the rise of multimodal transport in the Middle East, with a specific focus on Iran’s endeavors to integrate its rail, road, and sea infrastructure to enhance connectivity both domestically and regionally. The analysis encompasses Iran’s existing infrastructure capabilities across these modes, the ongoing projects aimed at fostering multimodal integration, the strategic importance of these developments for Iran’s economic and geopolitical standing, the multifaceted challenges encountered in this pursuit, and the broader regional context shaped by the perspectives of neighboring countries and the emergence of competing transport corridors. The findings of this report suggest that Iran possesses considerable potential to become a significant player in regional and global multimodal transport networks. However, the realization of this potential is contingent upon its ability to navigate and overcome a complex array of challenges, including the enduring impact of international sanctions and intricate geopolitical dynamics.

II.Introduction: The Ascendancy of Multimodal Transport in the Middle East

The Middle East is increasingly recognized as a pivotal global logistics hub, acting as a crucial link between the major markets of Europe, Asia, and Africa through its strategic geographical location and the presence of vital trade corridors. The region’s rapid economic expansion, coupled with substantial governmental investments in logistics infrastructure and the continuous evolution of trade policies, has firmly established the Middle East as a key participant in the intricate web of global supply chains. Governments across the region are actively investing in the development of sophisticated logistics infrastructure, recognizing its crucial role in economic diversification and global influence. Notable examples of this commitment include Saudi Arabia’s ambitious Vision 2030, which aims to transform the Kingdom into a global logistics powerhouse; the Dubai Logistics Corridor, a comprehensive multimodal transport network seamlessly integrating sea, air, and land freight; and Oman’s Duqm Port Expansion, a strategic project designed to significantly boost trade and reduce the nation’s reliance on traditional Gulf ports. These substantial investments are demonstrably improving connectivity across the region and significantly reducing the transit times for shipments moving through these strategic corridors. This concerted effort signifies a region-wide understanding of the paramount importance of a robust logistics sector for achieving sustained economic growth and enhancing global influence. The convergence of rapid economic development, the region’s inherently strategic location, and the proactive and substantial infrastructure investments undertaken by various governments strongly suggests a deliberate and long-term vision to capitalize on the Middle East’s geographical advantages, indicating a commitment that extends beyond immediate gains.

Multimodal transport, defined as the movement of goods utilizing a combination of different transportation modes such as road, rail, sea, and air, all under a single contract, is playing an increasingly vital role in the Middle East’s evolving logistics landscape. This integrated approach offers numerous benefits, including reduced transit times, enhanced cost-effectiveness in transportation, and a diminished environmental impact, all of which are crucial for achieving long-term competitiveness in the global market. Multimodal logistics, by its very nature, ensures faster transit times, provides cost-effective transportation solutions, and contributes to a reduced environmental footprint. The coordination of different transport methods under a single entity streamlines operations and leads to significant savings in both time and resources. Furthermore, the development of multimodal transport solutions in the Middle East is proving essential in reducing the region’s traditional dependence on road transport, thereby alleviating traffic congestion and promoting more sustainable freight movement. To mitigate their reliance on road transport, countries in the Middle East are actively developing alternative logistics solutions, with a particular focus on expanding and modernizing their rail networks and promoting coastal shipping to ease the burden on roadways. Ambitious projects such as the UAE’s Etihad Rail and Saudi Arabia’s Landbridge are specifically designed to reduce transit times and alleviate operational bottlenecks, consequently lessening the dependence on road transport for freight movement. The increasing adoption of multimodal transport in the region reflects not only a pursuit of greater efficiency but also a growing awareness of the importance of sustainability and resilience in the face of expanding trade volumes and heightened environmental concerns. The strategic shift towards rail and maritime transport as alternatives to roads indicates a forward-thinking approach to logistics, aligning with global sustainability trends and proactively addressing potential future challenges such as escalating traffic congestion and the need to reduce carbon emissions.

Within this dynamic regional context, Iran occupies a uniquely strategic geographical position, serving as a critical transit hub that connects the diverse markets of South Asia, Central Asia, and Europe. Situated at the very heart of the International North-South Transport Corridor (INSTC), Iran holds a pivotal role in facilitating trade flows between these major economic regions. The INSTC, a vital multimodal trade route, directly links India, Iran, Russia, Central Asia, and Europe through a network of ships, railways, and roads. Iran’s geographical proximity to the Persian Gulf, the Caspian Sea, and key land routes inherently positions it as an ideal and potentially cost-effective and time-efficient hub for the transit of goods between the East and the West. Transit through Iran often presents a more economical option, thereby reducing overall transportation costs for businesses engaged in international trade. Similarly, Iran’s central location and developing logistics infrastructure enable faster delivery times for goods moving between Asia, Europe, and the Middle East. Iran’s strategic location undeniably provides it with a significant natural advantage in the burgeoning multimodal transport landscape. However, fully realizing this inherent potential necessitates substantial and sustained investment in infrastructure development, coupled with proactive engagement in international cooperation to foster seamless connectivity and efficient trade flows. The ultimate success of Iran in capitalizing on its geographical advantage hinges on its ability to effectively address and overcome a multitude of internal and external challenges, including the persistent impact of international sanctions and the complexities of regional geopolitical dynamics.

III.Iran’s Transportation Infrastructure: A Tripartite Overview

Iran’s transportation infrastructure, a critical component of its economic and strategic ambitions, encompasses a diverse network of rail, road, and maritime transport modes.

The Iranian railway network, as of 2008, spanned 11,106 kilometers of track. Recognizing the vital role of rail in modern logistics, the Iranian government has articulated ambitious plans to significantly expand this network to an impressive 25,000 kilometers by the year 2025. A testament to Iran’s early commitment to national connectivity is the historical Trans-Iranian Railway, a remarkable engineering feat that connects the Caspian Sea in the north to the Persian Gulf in the south. This 1,394-kilometer railway, fully operational since 1938, stands as a UNESCO World Heritage site, underscoring its profound significance in Iran’s social, economic, industrial, and cultural development. Looking towards the future, Iran has outlined extensive expansion plans, including the development of nine strategic rail corridors that will collectively span approximately 17,000 kilometers, requiring a substantial investment estimated at €10 billion. Furthermore, there are ongoing initiatives to electrify and double-track existing railway lines to enhance capacity and efficiency. Several key railway projects are particularly noteworthy for their strategic importance in fostering multimodal transport and regional connectivity. The Rasht-Caspian railway, a 37-kilometer line inaugurated in June 2024, forms a crucial segment of the International North-South Transport Corridor (INSTC), effectively connecting the Persian Gulf to the Caspian Sea via Iran’s national rail network. Complementing this, both Russia and Iran have expressed strong commitment to the completion of the long-delayed Rasht-Astara railway, a vital missing link in the INSTC that will facilitate seamless cargo transit between Iran, Azerbaijan, and Russia. In the southeastern region, Iran and India are actively planning to restart the rail connectivity project between the strategically important Chabahar Port on the Sea of Oman and the city of Zahedan, aiming to leverage Chabahar’s potential as a gateway to the INSTC for Central Asian and Eurasian countries. Beyond these north-south connections, Iran harbors ambitions to establish a rail link connecting the Persian Gulf to the Mediterranean Sea, traversing through Iraq and potentially extending to Syria, further solidifying its role as a key regional transit hub. These ambitious railway development plans underscore Iran’s strategic intent to enhance both its domestic and international connectivity, with a clear emphasis on leveraging rail as a cornerstone of its multimodal integration strategy, particularly within the framework of the INSTC.

Iran’s road network is extensive, covering over 173,000 kilometers in 2011, with a significant 73% of these roads being paved. This vast network positions Iran as having the 23rd largest road network globally. While the road infrastructure is substantial and plays a critical role in connecting major urban centers and facilitating both domestic and international freight movement, a considerable portion of the network requires ongoing maintenance and modernization, particularly in rural and mountainous regions. Despite these challenges, Iran’s road network forms crucial corridors that participate in international transit routes, most notably the International North-South Transport Corridor (INSTC), and provides essential links with neighboring countries such as Turkey and those in Central Asia. The North-South Transport Corridor, for instance, utilizes Iran’s road network to link India with Russia and Northern Europe. To further enhance its road infrastructure, the Iranian government has outlined plans for the construction of new highways and the upgrading of existing roads, aiming to improve capacity and efficiency. Parsons, a global engineering firm, was recently awarded contracts for the design engineering of transportation infrastructure enhancements in the Middle East, which likely includes projects within Iran aimed at increasing roadway capacity. Overall, Iran’s extensive road network remains a vital component of its transportation infrastructure, supporting both internal connectivity and regional transit, although continued investment in maintenance and modernization is essential to ensure its long-term effectiveness in supporting multimodal transport ambitions.

Iran’s maritime infrastructure is strategically significant, featuring several key ports that play crucial roles in international trade and regional connectivity. Bandar Abbas, located on the Strait of Hormuz, stands as Iran’s primary maritime gateway, with the Shahid Rajaee Port Complex within it handling the vast majority of the nation’s container traffic. In 2024, container operations at Iranian ports experienced a notable 13% increase, highlighting the rising trade volumes. Shahid Rajaee Port alone boasts an impressive annual capacity of 100 million tons. Further east, Chabahar Port, situated on the Sea of Oman, offers Iran direct access to the Indian Ocean and holds immense strategic importance for connectivity with Afghanistan and the landlocked nations of Central Asia. To the north, Iran’s Caspian Sea ports, including Bandar-e Anzali, Amirabad, and Bandar Torkaman, are vital for facilitating trade with Russia and other Eurasian markets. In the first nine months of the Iranian year (March to December 2024), Iranian ports collectively handled nearly 175 million tons of cargo, underscoring their significant role in the country’s import and export activities. The total nominal capacity of all Iranian ports exceeds 260 million tons per year, and recent years have witnessed a substantial increase in overall port capacity. These maritime gateways are not only crucial for Iran’s international trade but also play a paramount role in international trade corridors such as the INSTC, with Shahid Rajaee Port strategically located on this route. Given their strategic geographic location, Iranian ports are pivotal in international trade, and despite ongoing sanctions, they have demonstrated record-breaking performance in cargo handling and container operations. Overall, Iran’s maritime infrastructure, particularly its southern ports, serves as a critical foundation for its international trade ambitions and its integral role in regional transport networks.

IV.Connecting the Dots: Iran’s Multimodal Integration Strategies

Iran is actively pursuing strategies to enhance the integration of its diverse transportation infrastructure, aiming to create a seamless and efficient multimodal transport network.

A key aspect of Iran’s strategy involves the interlinking of its rail, road, and sea transport modes to facilitate the efficient movement of both domestic cargo and passengers. For instance, the vital port of Bandar Abbas is well-connected to major Iranian cities, including the capital Tehran, through an established network of both roadways and railways. Furthermore, the historic Trans-Iranian Railway serves as a crucial north-south artery, connecting the Caspian Sea with the Persian Gulf and enabling the efficient transportation of cargo along this significant axis. Recognizing the inherent advantages of rail transport in terms of capacity and efficiency, the Iranian government has articulated clear plans to prioritize rail for both freight and passenger movement, with a long-term goal of achieving a significant modal shift from road to rail. In line with this objective, Iran aims to achieve a substantial 16 million tons of transit with Central Asian nations by strategically increasing the integration of multimodal transport options, with a particular emphasis on leveraging its existing and expanding rail connectivity. These efforts signify a concerted move towards a more integrated domestic logistics framework, where the strengths of each transport mode are optimally utilized to enhance overall efficiency and connectivity.

To further bolster its multimodal transport capabilities, Iran is actively engaged in the development of key logistics hubs and intermodal transfer points strategically located across the country. Plans are in place for the establishment of dedicated logistics parks and free trade zones, specifically designed to enhance Iran’s transit capabilities and attract foreign investment in the logistics sector. Simultaneously, there is a strong focus on the continuous development of port infrastructure to ensure seamless and efficient transfers between sea and land transport modes. The ongoing efforts to develop large economic processing zones and freight distribution centers in close proximity to major ports underscore this commitment. Moreover, the capital city of Tehran holds significant potential as a central transit hub due to its well-established connections to major international and domestic airports, the central railway station, and extensive intercity bus terminals, making it a crucial node in Iran’s multimodal network. The strategic development of these logistics hubs and the enhancement of infrastructure around key transportation nodes are essential steps in improving the overall efficiency and effectiveness of multimodal transport operations within Iran.

Several key initiatives and projects are currently underway in Iran, all aimed at enhancing seamless transitions between different transport modes. The most prominent example of this effort is Iran’s active participation in the development of the International North-South Transport Corridor (INSTC), a flagship multimodal initiative that strategically integrates sea, rail, and road transport to facilitate trade between India, Russia, and Europe. To further streamline operations, Iran is continuously investing in the modernization of its ports, equipping them with advanced loading and unloading equipment to expedite the transfer of goods between ships and land-based transport. Recognizing the transformative potential of technology in modern logistics, Iran is also exploring the implementation of smart systems and digital technologies to improve coordination and communication between different transport modes, aiming for greater efficiency and transparency in its multimodal operations. The planned provision of a smart system for multimodal transportation by the secretariat of the Iranian Aviation Technology Development Headquarters highlights this growing recognition. These ongoing initiatives demonstrate Iran’s proactive approach to enhancing the efficiency and interconnectedness of its multimodal transport network, both within its borders and as a key participant in international trade corridors. 

V. Strategic Imperatives: Why Multimodal Transport Matters for Iran

The development and enhancement of multimodal transport infrastructure and capabilities are of paramount strategic importance for Iran, driven by a multitude of compelling economic and geopolitical imperatives.

A primary strategic imperative for Iran is the enhancement of its position within prominent international trade and transit corridors, most notably the International North-South Transport Corridor (INSTC). The INSTC offers a significantly shorter and potentially more cost-effective route for trade between major economic centers like India and Russia, as well as extending to Europe, when compared to traditional maritime routes that involve navigating the Suez Canal and the Mediterranean Sea. Iran’s unique geographical advantage positions it as a crucial facilitator of trade flows between the rapidly growing economies of South Asia, the resource-rich nations of Central Asia, and the established markets of Europe and beyond. By strategically developing its multimodal transport infrastructure and streamlining its logistics processes, Iran has the potential to solidify its role as a key transit hub on the vital Eurasian land bridge, thereby unlocking the possibility of generating substantial revenues from transit fees and increased trade activity. Iran’s active engagement in and development of multimodal transport, especially through its central role in the INSTC, is therefore not merely a matter of logistical improvement but a strategic maneuver aimed at elevating its geopolitical and economic standing on the global stage.

Furthermore, the development of efficient multimodal transport systems is a crucial driver for Iran’s economic growth and its ongoing efforts towards economic diversification. Efficient logistics inherently lead to reduced transportation costs and improved delivery times, which directly benefit both domestic industries and Iran’s participation in international trade. The potential for increased trade volumes, facilitated by a robust transport network, can significantly boost Iran’s non-oil exports, a key objective in its strategy to diversify its economy away from its traditional reliance on hydrocarbon revenues. Moreover, the very process of developing and expanding transport infrastructure creates numerous job opportunities across various sectors, including construction, transportation, and related support services, thereby stimulating economic activity in different regions of the country. Investing in and fostering efficient multimodal transport systems can therefore act as a powerful catalyst for Iran’s overall economic growth by making its businesses more competitive, attracting foreign investment, and creating a more dynamic and resilient economic environment.

Finally, the pursuit of enhanced multimodal transport connectivity is strategically imperative for strengthening Iran’s regional connectivity and bolstering its geopolitical influence. Multimodal transport projects inherently foster closer ties and enhance regional cooperation with neighboring countries by facilitating the smooth and efficient movement of goods and people across borders. Iran holds a significant potential role in connecting the landlocked nations of Central Asia to global maritime trade routes through its network of ports and railways, offering these countries crucial access to international markets. Beyond the economic benefits, Iran’s transport infrastructure carries significant strategic implications for regional power dynamics and its complex relationships with key global players such as Russia, India, and China. By enhancing its transport connectivity, Iran can not only strengthen its economic ties but also build stronger political alliances and play a more influential role in shaping regional trade flows and the broader geopolitical landscape of the Middle East and Eurasia. Transportation infrastructure, in this context, becomes a vital instrument of foreign policy, allowing Iran to project its influence and deepen its engagement with key regional and global actors.

VI.Navigating the Hurdles: Challenges to Multimodal Transport Development in Iran

Despite the significant strategic imperatives driving the development of multimodal transport in Iran, the nation faces a complex array of challenges that impede its progress.

The enduring impact of international sanctions presents a substantial obstacle to Iran’s efforts to develop its multimodal transport infrastructure and integrate advanced technologies. These sanctions have significantly limited Iran’s access to crucial foreign investment, modern transportation equipment such as trucks and locomotives, essential spare parts, and cutting-edge logistics technologies. Consequently, Iran faces considerable challenges in securing the necessary financing for large-scale infrastructure projects, as evidenced by the delays and difficulties encountered in the development of strategically important railways like the Rasht-Astara line.56 Furthermore, the reluctance of many global logistics companies to engage in business with Iranian firms due to the risk of secondary sanctions further compounds these challenges.28 The restrictive environment created by international sanctions has a far-reaching impact, not only hindering direct financial investment but also severely limiting Iran’s ability to acquire the specialized equipment and attract the international expertise that are indispensable for building a modern and efficient multimodal transport system capable of meeting global standards.

While Iran possesses a significant transportation infrastructure network, including extensive road and rail systems and strategically located ports, many components of this infrastructure suffer from limitations and require substantial modernization. Parts of the road network, particularly in rural and mountainous regions, are in need of consistent maintenance and upgrades to ensure their quality and capacity. Similarly, Iran’s railway infrastructure, while historically important, requires significant modernization, including the expansion of electrification and double-tracking to enhance efficiency and capacity. Moreover, despite the overall high capacity of Iranian ports, some areas and specific facilities may be underperforming or require further development to effectively handle the anticipated growth in multimodal transport and international trade. The need for continued investment in upgrading and expanding all modes of transport is critical for Iran to effectively support its growing multimodal transport ambitions and to remain competitive in the regional and global logistics landscape.

The complex geopolitical landscape of the Middle East introduces a further layer of challenges to Iran’s multimodal transport development and its pursuit of regional collaborations. Tensions and strained relationships with some neighboring countries can potentially impede the progress of cross-border transport and transit agreements, creating uncertainties for regional connectivity initiatives. Additionally, Iran faces increasing competition from the emergence of other significant regional transport corridors, such as the Iraq-Turkey-Europe Development Road and the India-Middle East-Europe Economic Corridor (IMEC), which aim to establish alternative trade routes and could potentially divert transit traffic away from Iranian infrastructure. These geopolitical risks and the presence of competing corridors can also deter international freight companies from choosing Iran as their primary transit hub, leading to further challenges in realizing its full potential as a regional logistics center. Navigating these intricate geopolitical dynamics and fostering stable, cooperative relationships with neighboring countries will be crucial for Iran to overcome these hurdles and achieve its transport connectivity goals.

Finally, Iran faces growing competition from other nations within the Middle East that are also making substantial investments in their logistics and multimodal transport capabilities. Countries like Saudi Arabia and the UAE are rapidly developing into major logistics hubs, with ambitious projects such as the Dubai Logistics Corridor and the Saudi Landbridge aiming to significantly enhance regional connectivity. Oman’s Duqm Port Expansion further contributes to this competitive environment, seeking to attract greater volumes of international trade. This increasing competition necessitates that Iran not only continues to invest in its infrastructure but also innovates and offers unique advantages, such as leveraging its strategic geographical position for specific trade corridors like the INSTC, to effectively attract and retain transit trade in the face of these emerging regional logistics powerhouses.

VII. Economic Ripples: The Impact of Iran’s Multimodal Transport Initiatives

The development and enhancement of Iran’s multimodal transport infrastructure and initiatives are poised to generate significant economic impacts, both within the nation and across the broader Eurasian trade landscape.

The successful operationalization and further development of key multimodal transport corridors, particularly the International North-South Transport Corridor (INSTC), hold substantial potential for increasing trade volumes and generating significant revenue for Iran. Projections from the Eurasian Development Bank indicate that the INSTC could handle an impressive 30 million tons of goods annually by the year 2030, which is expected to translate into substantial transit revenue for Iran, estimated at $1.5 billion. Furthermore, realizing Iran’s full potential as a transit hub could potentially earn the country billions of dollars annually in transit fees.2 The recent growth in container operations at Iranian ports, with a notable 13% increase recorded in 2024, further suggests a positive trend in rising trade volumes flowing through the nation’s maritime gateways. The successful development of its multimodal transport capabilities, especially through its strategic role in international corridors, therefore presents a significant opportunity for Iran to boost its trade volumes and generate substantial financial resources, contributing to its overall economic recovery and fostering sustained growth.

The development of efficient multimodal transport systems is also expected to have a profound positive impact on Iran’s domestic industries, supply chains, and employment landscape. Enhanced logistics capabilities will lead to a reduction in transportation costs for Iranian industries, thereby improving their competitiveness in both domestic and international markets. Improved connectivity, facilitated by a robust multimodal network, will streamline supply chains, ensuring smoother access to raw materials and markets for Iranian businesses across various sectors. Moreover, the very undertaking of large-scale infrastructure projects associated with multimodal transport development will create numerous employment opportunities in a wide range of fields, including construction, transportation services, logistics management, and related support industries, thus stimulating economic activity and contributing to job creation in different regions of Iran. A well-developed and efficiently managed multimodal transport system can therefore act as a vital catalyst for Iran’s domestic economic growth and diversification.

Iran’s strategic geographical location positions it to play an increasingly crucial role in facilitating transit trade across the vast expanse of Eurasia. Its unique location at the crossroads of Asia and Europe makes it an inherently vital link for the movement of goods between these major continents. Furthermore, Iran offers the potential for a shorter and often more cost-effective overland trade route when compared to traditional maritime routes that involve longer distances and higher shipping costs. The increasing transit volumes observed through Iran in recent years, with a remarkable 78% year-on-year surge reported, underscore its growing significance as a key transit hub in the region. Iran’s ambition to achieve 16 million tons of transit with Central Asia further highlights its commitment to this role. By strategically leveraging its geographical advantages and continuing to invest in its multimodal transport infrastructure, Iran is increasingly establishing itself as a vital transit point on the Eurasian trade map, offering a compelling land-based alternative that can significantly reduce both transit times and overall transportation costs for goods moving between the East and the West.

VIII. Geopolitical Crossroads: Iran’s Influence on Regional Transport Networks

Iran’s strategic location and its ongoing development of multimodal transport infrastructure place it at a critical geopolitical crossroads, significantly influencing regional transport networks and power dynamics.

Iran occupies a pivotal position within the International North-South Transport Corridor (INSTC), a project of immense strategic importance for the region. As a founding member of the INSTC, Iran’s geographical location and existing infrastructure are central to the corridor’s success in connecting India, Russia, and Europe. Iran has made notable progress in developing key infrastructure links crucial for the INSTC’s functionality. The operationalization of the Rasht-Caspian railway in June 2024 represents a significant step forward in connecting the Persian Gulf to the Caspian Sea via rail. Furthermore, both Iran and Russia have reaffirmed their commitment to completing the Rasht-Astara railway, a vital missing link that will ensure seamless cargo transit between the two nations through Azerbaijan. Iran is also actively pursuing the connection of Chabahar Port to its national railway network by March 2025, aiming to enhance its role as a gateway for trade with Central Asia and beyond through the INSTC. Despite this progress, the INSTC continues to face challenges, including delays in the completion of crucial infrastructure projects, persistent funding issues, and the complexities arising from regional geopolitical tensions. While the corridor is not yet fully operational, its future prospects for significantly boosting regional trade and connectivity remain promising, with Iran poised to play a central and influential role in its success. The full realization of the INSTC’s potential and the solidification of Iran’s influence within it hinge on the nation’s ability to address the remaining infrastructure gaps and navigate the intricate geopolitical landscape of the region.

Neighboring Middle Eastern countries and Central Asian nations hold varied perspectives on Iran’s growing transport connectivity. Central Asian states are increasingly recognizing Iran as a crucial link in regional transit corridors, particularly as they seek access to vital sea routes for their exports and imports. The potential combination of the Turkmenistan-Uzbekistan route with a transit spur extending to Iran is viewed as particularly beneficial for both China and Iran, offering new trade avenues. Pakistan is also exploring the utilization of overland Iranian routes as a means to connect with Turkey and European markets, highlighting the growing importance of Iran’s geographical position. Russia, facing its own geopolitical challenges, has a strong vested interest in the completion of transport corridors through Iran, such as the Rasht-Astara railway, as these routes are essential for enhancing its trade connectivity with the Middle East, South Asia, and beyond. However, Iran’s transport connectivity initiatives also face concerns and competition from countries like Turkey and Azerbaijan, which are actively developing alternative transport routes that could potentially bypass Iran and limit its regional transit power. While many neighboring nations acknowledge the strategic importance of Iran’s transport links and seek to benefit from them, their perspectives and collaborations are also shaped by elements of competition and their own distinct geopolitical considerations.

The development of Iran’s transport infrastructure and its participation in regional corridors like the INSTC are intrinsically linked to the complex interplay of regional power dynamics. The establishment of new and efficient transport corridors has the potential to shift established global trade patterns, offering alternatives to existing routes and potentially challenging their dominance. For Iran, its growing transport infrastructure serves as a strategic tool to counterbalance Western influence in the region and reduce its dependence on traditional maritime routes that have historically been controlled or heavily influenced by Western-aligned nations. Furthermore, enhanced transport connectivity has the potential to foster greater economic integration among participating nations, which could, in turn, lead to the formation of new regional alliances and partnerships, reshaping the geopolitical landscape of Eurasia. Iran’s concerted investment in multimodal transport is therefore not solely an economic strategy but also a significant geopolitical maneuver aimed at redefining regional trade dynamics and ultimately enhancing its own power and influence within this strategically vital part of the world.

IX.Looking Ahead: The Future of Multimodal Transport in the Middle East and Iran’s Trajectory

The future of logistics and multimodal transport in the Middle East, including Iran, is poised for significant transformation driven by several key trends. The continued exponential growth of e-commerce is expected to fuel an ever-increasing demand for faster, more efficient, and more reliable logistics solutions across the region.1 In response to this demand and the broader need for optimization, there is a clear trend towards the increasing adoption of digital solutions, including artificial intelligence (AI), and blockchain technology, within logistics operations to enhance efficiency, transparency, and security. Furthermore, a growing global awareness of environmental concerns is leading to a greater emphasis on green logistics and sustainability initiatives within the Middle East, with countries exploring eco-friendly transportation options and sustainable warehousing practices. Emerging trends such as the potential for autonomous logistics, including self-driving vehicles and AI-powered management systems, along with the ongoing expansion of free trade zones focused on logistics, also point towards a future characterized by innovation and increasing efficiency. These trends collectively suggest that the future of logistics in the Middle East will necessitate continuous adaptation and a strong embrace of technological advancements and sustainable practices.

For Iran to effectively navigate this evolving landscape and strengthen its position as a key multimodal transport hub, the integration of technology, digitalization, and automation across its transport sector is crucial. There are significant opportunities for Iran to leverage AI and predictive analytics to optimize its complex supply chains and achieve substantial reductions in operational costs. The implementation of blockchain technology holds the potential to enhance trade transparency and significantly streamline customs clearance processes, making Iran a more attractive transit destination. The adoption of smart warehousing solutions and automated systems for inventory management can further improve the efficiency of Iran’s logistics operations. Looking ahead, the potential integration of smart traffic management systems and the deployment of Internet of Things (IoT)-enabled cargo tracking technologies can provide real-time visibility and further optimize the movement of goods across different transport modes. Embracing these technological advancements will be essential for Iran to modernize its transport sector, improve its overall efficiency, enhance transparency in its operations, and achieve better integration into the increasingly digitalized global supply chains.

To further solidify its position as a pivotal multimodal transport hub in the Middle East, Iran should consider a multi-faceted approach encompassing several key recommendations. Prioritizing and significantly expediting the completion of strategically important infrastructure projects, particularly those that form integral parts of the International North-South Transport Corridor (INSTC), such as the Rasht-Astara and Chabahar-Zahedan railways, should be a top priority. Actively seeking foreign investment and fostering international partnerships will be crucial in overcoming the persistent challenges posed by international sanctions and in accelerating the much-needed modernization of its transport infrastructure. Implementing comprehensive policy reforms aimed at streamlining customs procedures, reducing bureaucratic hurdles and border delays, and improving overall trade facilitation will significantly enhance Iran’s attractiveness as a transit nation. Investing strategically in the development of digital infrastructure and actively promoting the adoption of advanced technologies across all aspects of logistics operations will be essential for improving efficiency and transparency. Strengthening regional diplomatic efforts to foster greater cooperation with neighboring countries and proactively addressing any geopolitical tensions that could potentially hinder transport connectivity and trade flows is also paramount. Furthermore, developing and actively promoting sustainable and green logistics practices will not only align Iran with evolving global trends but also enhance its image as a responsible and forward-thinking transit hub. Finally, a focused effort on improving the efficiency and overall productivity of existing infrastructure and logistics operations through better management practices and comprehensive training programs for personnel will be crucial in maximizing the utilization of current resources. By adopting this comprehensive and multi-pronged strategy, Iran can significantly strengthen its position as a key multimodal transport hub in the Middle East, contributing to both its own economic prosperity and the broader facilitation of global trade.

X.Conclusion

Iran’s strategic geographical location at the heart of Eurasia presents a unique and compelling opportunity for it to emerge as a key multimodal transport hub in the Middle East. The nation’s ongoing efforts to develop and modernize its rail, road, and maritime infrastructure, coupled with its active participation in international transport corridors like the INSTC, underscore its commitment to enhancing both domestic and regional connectivity. The potential economic and geopolitical benefits for Iran in realizing this ambition are substantial, ranging from increased trade revenues and economic diversification to strengthened regional influence and the forging of crucial international partnerships. However, the path towards becoming a preeminent multimodal transport hub is fraught with significant challenges. The enduring impact of international sanctions continues to hinder access to vital investment and technology, while existing infrastructure limitations necessitate substantial and sustained modernization. Furthermore, the complex geopolitical landscape of the Middle East, characterized by regional rivalries and the emergence of competing transport corridors, adds another layer of complexity to Iran’s aspirations. Looking ahead, the future of multimodal transport in the Middle East will be shaped by rapid technological advancements and an increasing focus on sustainability. For Iran to fully capitalize on its strategic advantages and solidify its position as a key player, a comprehensive and proactive approach is required. This approach must prioritize the completion of critical infrastructure projects, embrace technological innovation, foster international cooperation, and implement policy reforms that streamline trade and enhance efficiency. While significant challenges remain, Iran’s strategic location and its demonstrated commitment to developing its multimodal transport capabilities suggest a promising trajectory in the evolving landscape of Middle Eastern logistics and its potential contribution to global trade connectivity.

Key Tables:

Table1: Key Multimodal Transport Infrastructure Projects in Iran

Table2: Iran’s Key Ports: Capacity and Throughput (2024)

Table3: Iran’s Role in the International North-South Transport Corridor (INSTC)