Rail freight transit, also known as rail cargo transit, refers to the movement of goods by freight trains from one country to another. As one of the key modes of international transportation, rail transit is used for a wide variety of shipments from lightweight packages to heavy, bulky cargo.

To enable rail transit, a direct rail link between the origin and destination is essential. Therefore, this method is typically used between neighboring countries with shared land borders and established rail infrastructure.

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The Role and Potential of Rail Transit in Iran

Exploring and identifying the capacities of rail freight transit, along with addressing the barriers to its development, is a crucial aspect of national transport strategy. Iran has significant untapped potential in this field, which can play a pivotal role in boosting the national economy.

Despite these advantages, there remains a considerable gap between the current level of utilization and the country’s actual transit capacity.

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Iran’s Strategic Location on International Rail Corridors

Iran’s unique location along major international trade corridors offers a great opportunity to become a key player in regional and global logistics. By enhancing its rail cargo transit system, the country can significantly increase its foreign exchange revenue, strengthen economic diplomacy, and move toward mitigating the effects of international sanctions.

For Accurate estimate of rail freight transit costs

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What Is Rail Transit?

Rail transit, also known as rail shipment transit, refers to the transportation of goods via trains from one country to another. It is a form of international transport used for a wide range of cargo — from lightweight shipments to heavy and bulky loads.

In order to a rail transit occur, a continuous rail connection between the origin and destination is essential. Therefore, this method is typically utilized between countries that share land borders and have cross-border rail infrastructure in place.

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Required Documents for Rail shipment Transit

If you intend to ship your goods via rail freight transit, you will need to work with a certified international freight forwarding company. These companies manage the entire rail transit process from start to finish. All you need to do is provide the necessary documentation and sign a clear and detailed rail transit contract.

In rail cargo transit, a bill of lading (B/L) is essential. This document must include all the relevant information about the shipment. Additionally, you must insure the cargo, and submit complete details of both the shipper and the consignee to the logistics company.

Once the terms and costs are finalized, the official rail transit bill of lading will be issued to you. This document is highly important and must be carefully preserved. If it is lost, most freight companies will not take responsibility for the shipment.

The Importance and aims of Rail Transit Research

Undoubtedly, rail freight transit is one of the foundational pillars for strengthening a country’s economy. Iran is strategically located along major international rail corridors, giving it enormous potential to boost national revenue through cross-border rail cargo transit.

According to studies conducted in recent years, the volume of goods exchanged between countries — forming the accessible rail transit market for Iran — is estimated at approximately 55 million tons. However, Iran’s railways have, on average, handled only about 1.5 million tons of transit cargo annually.

This research aims to analyze the existing challenges and limitations in Iran’s rail transit system. In the final section, practical solutions are proposed to help eliminate the obstacles and expand the country’s rail freight transit capabilities.

Revenue Potential of Rail Transit and Key Regulatory Bodies

Market analysis shows that the potential rail transit volume accessible to Iran ranges from a minimum of 55 million tons to a maximum of 153 million tons. At full capacity, this volume could generate up to $10 billion in revenue for the country.

Revenue per ton of rail cargo transit depends on multiple factors such as border type, customs duties, transportation tariffs, and other logistics costs. Based on current rail tariff policies, each ton of transit cargo generates an average of $75 in income for the Iranian railway system.

Several national institutions play key roles in the development of rail freight transit:

  •  

    The Parliament (Majles)

    Most influential in budget allocation, eliminating outdated regulations, and ensuring legislative support.
  •  

    Ministry of Roads and Urban Development

    The primary stakeholder responsible for infrastructure development and overall transport policy.
  •  

    Iranian Railway Company (RAI)

    Oversees the operation, expansion, and maintenance of the rail network.

  • Other stakeholders include the Planning and Budget Organization, Construction and Development Company, Road Maintenance and Transport Organization, Iranian Customs Administration, and the Ports and Maritime Organization.
These institutions collectively influence the effectiveness, coordination, and growth of rail transit operations in Iran.

Analysis of Challenges in Iran’s Rail Freight Transit Sector

This section examines expert opinions and statements from officials and member states of key rail freight transit corridors involving Iran.

For instance, India has highlighted the absence of the Qazvin–Astara railway line, as a missing link preventing seamless rail connectivity between India and countries like Armenia, Turkmenistan, Kazakhstan, Uzbekistan, Afghanistan, and Turkey through Iran. Moreover, India has criticized Iran’s railway structure for lacking fixed timetables, delays in loading and unloading, and lengthy transit times.

Kazakhstan Railways has pointed to issues such as banking transaction difficulties, high tariffs, and lengthy customs procedures as major barriers to smooth transit through Iran. Similarly, Turkish Railways has called for reduction of operation times in Zahedan and the completion of reconstruction on the Zahedan–Kerman railway as necessary steps for improvement.

Key Structural and Regulatory Issues

The major obstacles facing Iran’s rail freight transit can be categorized into several areas :

  • Incomplete railway infrastructure projects

  • Low operational efficiency

  • Weak institutional and organizational coordination

  • Uncompetitive tariff systems

  • Lack of interoperability with road freight services

On the international legal side, key problems include :

  • Restrictions on Iranian wagons entering CIS countries

  • Lack of harmonized regulations between railway authorities of different countries

Domestically, some of the issues include :

  • Strict anti-smuggling regulations that hinder freight flow

  • Limited involvement of private logistics companies

  • Lack of adequate infrastructure, especially in block-section management

  • No guaranteed train schedules for freight trains

  • Poor inter-agency coordination, and

  • Limited competitiveness of rail freight compared to road transport

These challenges collectively reduce the reliability, efficiency, and appeal of Iran’s rail transit system on an international level.

Proposed Solutions for Developing Rail Freight Transit

  •  

    Reforming Rail Transit Regulations

    Establishing a Rail Transit Industry Policy Committee in the Parliament, improving the business environment, supporting private rail transit companies, and amending customs laws are essential steps to promote rail freight transit.
  •  

    Removing International Legal Barriers

    Revising the ban on Iranian wagons entering CIS countries, harmonizing rail transit regulations among member states, and adopting common regional currencies for transactions will facilitate smoother cross-border rail transit.
  •  

    Organizational and Management Improvements

    Creating a single governing body to oversee rail transit, and establishing a strategic transit headquarters that coordinates all related organizations to develop a comprehensive national rail transit roadmap and policy document.
  •  

    Increasing Efficiency in Rail Transit

    Expanding the number of block sections, ensuring scheduled and reliable freight train operations, implementing modern technologies such as automated video and technical monitoring systems, and enhancing commercial activities within rail transit.
  •  

    Establishing Fair Competition Between Rail and Road Transit

    Balancing freight movement between rail and road, providing subsidized fuel for road transport, and government support for jobs related to rail freight transit will encourage a more equitable and efficient transportation sector.

Advantages of Rail Freight Transit

Rail freight transit offers significant benefits, especially for transporting heavy and bulky goods, including:

  •  

    Energy Efficiency and Fuel Savings

    Trains consume less energy compared to road vehicles, resulting in lower operational costs in rail freight transit.
  •  

    High Capacity

    Rail networks can carry large volumes of cargo in a single shipment, making them ideal for bulk and industrial goods.
  •  

    Environmental Benefits

    Due to the use of electric systems and reduced greenhouse gas emissions, rail transit is environmentally friendlier compared to road transport.
  •  

    Reliable Scheduling

    Fixed routes and precise railway timetables allow for accurate scheduling and reduced delivery delays in rail freight transit.

Disadvantages, Challenges, and Limitations of Rail Freight Transit

  •  

    Slower Speed Compared to Air Transport

    Although rail transit offers cost and capacity advantages, its speed is lower than air freight.
  •  

    Requirement for Advanced Infrastructure

    Building and maintaining rail networks require substantial investment in tracks, stations, and technical equipment.
  •  

    Coordination Challenges

    Managing coordination among railway companies, government agencies, and private sectors in Iran presents administrative and operational difficulties.
  •  

    Limited Flexibility

    Unlike road transit, rail freight has less route flexibility and adaptability to geographic or demand changes, which can be problematic during emergencies or sudden shifts in cargo needs.

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Costs of Rail Freight Transit

  •  

    Freight Charges in Rail Transit

    The cost of transporting cargo via rail transit is a critical factor for every trader and businessperson. Understanding the various elements that influence rail transit expenses is essential to effectively plan your overall logistics and trade operations.
  •  

  •  

    Distance Between Origin and Destination

    The greater the distance between the shipping origin and destination, the higher the transit costs. Longer routes increase fuel consumption, energy use, transit time, and other operational expenses.[/stpl-conten]

  •  

    Lack of Continuous Rail Routes for Transit

    If two trading countries do not share a common land border or connected rail lines, shipments must either switch transportation modes or use multimodal transit—combining rail with air, sea, or road transport. This complexity increases overall rail transit costs.

Factors Affecting the Cost of Rail Freight Transit

  •  

    Type of Cargo

    The weight, size, and volume of the cargo are the three main factors in pricing rail transit. The larger these variables, the higher the cost, as more space on the train is required.

  •  

    Mode of Transport in Rail Transit

    Transportation costs differ for importers and exporters, and each type of shipment has its own characteristics. Understanding the steps and costs involved in export and import processes is essential to accurately estimate rail transit expenses.

  •  

    Type of Rail Wagon

    Different types of freight wagons operate on Iranian and international rail lines, each priced according to their specific features. Therefore, costs should be calculated based on the type of wagon required for your cargo.

  •  

    Type of Cargo (Hazardous or Sensitive)

    If your cargo is hazardous or sensitive, special handling and storage methods apply, which typically increase the cost compared to regular freight.

  •  

    Cargo Insurance

    Rail freight shipments cannot proceed without proper insurance coverage. An initial insurance fee must be paid before transit begins to protect the cargo against risks.[/stpl-cpntent]

Iran’s Rail Transit Border Crossings

As previously mentioned, Iran’s rail operate at various points across the country, connecting Iran to several Asian and European countries. Despite this, Iran’s vast territory holds much greater potential for rail freight transit, which can significantly boost foreign trade for Iranian merchants. Below is an introduction to these key rail border crossings and their international connections :

  • Sarakhs Border (Iran - Turkmenistan)

  • Incheh Borun Border (Iran - Turkmenistan)

  • Shamtiq Border (Iran - Afghanistan)

  • Lotfabad Border (Iran - Turkmenistan)

  • Jolfa Border (Iran - Azerbaijan)

  • Razi Border (Iran - Turkey)

  • Mirjaveh Border (Iran - Pakistan)

  • Astara Border (Iran with Russia, Azerbaijan, Georgia, and Kazakhstan)

سوالات متداول

What is Rail Freight Transit?

Rail freight transit involves the transportation of goods using standard or express train lines. It requires the existence of continuous railway connections between two countries, usually sharing a land border with operational rail links. Rail transit is favored by traders for its speed, efficiency, and reliability.

Why is Rail Freight Transit a Good Choice?

Speed and Efficiency: Trains travel faster than trucks and have high cargo handling capacity. • Cost Reduction: Rail networks consume less fuel and require lower maintenance costs compared to road transport. • Environmental Protection: Rail transit reduces air pollution and promotes eco-friendly logistics. • High Capacity: Trains can carry large volumes of goods in one shipment. • Safety: Advanced safety systems reduce the risk of accidents. • Time Flexibility: Trains follow strict schedules and are not affected by road traffic delays.

What Actions Promote Rail Network Development and Economic Growth in Rail Transit?

• Launching New Rail Lines: Building new rail connections to industrial and agricultural zones facilitates freight movement. • Improving Access: Enhancing rail network accessibility in remote and underdeveloped areas supports economic growth. • Attracting Investment: Expanding rail infrastructure encourages investors and business development. • Reducing Costs: Rail transit lowers the overall costs of freight and trade. • Decreasing Pollution: Preferring rail over road transport improves air quality and environmental health.

Conclusion

Rail freight transit is a fundamental pillar for strengthening the national economy. Iran possesses significant capacities in rail transit that can effectively contribute to the country’s economic development. Iran’s strategic geographical position places it along major global freight routes and international rail transit corridors.

Studies indicate that the accessible rail transit market for Iran ranges from a minimum of 55 million tons to a maximum of 153 million tons of cargo. This creates a promising outlook for Iran to achieve up to $10 billion in revenue from rail transit.

However, evaluations reveal several key obstacles, including low operational efficiency, incomplete railway projects, domestic regulatory issues, and lack of coordination among responsible organizations.

Key solutions to enhance rail transit capacity include legal reforms, improved management and organizational restructuring, and increased operational efficiency.