Cost of transporting Uzbek goods westward increases by 1.5 times

Over the past seven years, Uzbekistan has significantly boosted its trucking capacity by supporting local carriers. The number of trucks has surged sevenfold to 26,000, while their share in international transportation has risen from 35% to 60%. However, global geopolitical tensions have posed new challenges for the country’s transport sector. Transporting goods westward now takes twice as long, with costs escalating by 1.5 times. These issues are the focus of a presentation reviewed today, January 11, by President Shavkat Mirziyoyev, outlining measures to further develop Uzbekistan’s transport and logistics system.  

The presentation highlighted specific barriers affecting international trade routes. Border checkpoints in certain European countries have been closed, while others are experiencing severe congestion, resulting in long queues. To address these disruptions, the need for consistent investment in transport infrastructure and diversification of foreign trade routes was emphasized.  

“In particular, measures must be taken to simplify and liberalize transit cargo transportation with countries located along alternative routes to international and regional markets. Additionally, reciprocal agreements to reduce or eliminate border fees should be prioritized ,” the report stated.

Another key challenge is the dominance of foreign companies in Uzbekistan’s freight forwarding market. To bolster local freight forwarders, the government has exempted value-added tax (VAT) on their services for international freight. This policy aims to raise the share of domestic enterprises in the freight forwarding sector to 45-50%. The ultimate goal is to double the volume of international freight transportation and increase the export of transport services to at least $3 billion.  

The report also emphasized the importance of transit transportation through Uzbekistan. Enhanced facilities and streamlined processes have contributed to the country’s climb in the World Bank’s Logistics Performance Index. Officials anticipate that improved transit potential will attract greater investment flows and stimulate trade and economic ties.  

To further ease transportation, the government plans to implement an electronic queue system at border checkpoints, reducing crossing times to 20 minutes. Additionally, an online vehicle tracking system will be introduced to attract more cargo flows.  

In a related development, the government highlighted its success in streamlining the taxi services sector. Two years ago, individuals were temporarily permitted to work as self-employed taxi drivers, resulting in a sixfold increase in their numbers to 457,000. This policy will now be made permanent, fostering a robust market of 151 aggregator companies that connect drivers with customers. Moving forward, the activities of aggregators will be regulated to clarify their responsibilities to the state, drivers, and passengers.