BEYOND TRANSIT: STRATEGIES FOR TRANSFORMING AZERBAIJAN INTO A REGIONAL LOGISTICS HUB

Abstract

This study explores how Azerbaijan can move beyond a transit-based role and enhance domestic economic value through a logistics-oriented hub model. Despite remarkable growth in transit freight volumes and strengthened regional connectivity, the economic benefits generated within the national economy remain limited. The main objective of the research is to identify practical pathways for transforming transit connectivity into value-added logistics outcomes.
The paper applies a qualitative and analytical research approach based on existing data from official national sources, including transport and customs statistics, academic literature, and international reports. A comparative perspective is employed to examine Azerbaijan’s logistics practices in relation to selected international experiences such as Singapore, Rotterdam, and Jebel Ali. The analysis is structured around a conceptual framework integrating transit connectivity, logistics upgrading, and value creation.
The research addresses key questions concerning why transit growth does not by itself result in greater domestic value and which logistics functions are critical for enhancing value capture. The results emphasize the importance of corridor-based logistics hubs, multimodal coordination, inland terminals, customs digitalization, cargo consolidation, value-added logistics services, aviation logistics specialization, and stronger private sector participation for deeper integration of transport flows within the domestic economy. This investigation contributes to the academic literature on transit-based economies and offers policy-relevant insights for Azerbaijan and other emerging transit countries.