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US rail sanctions confront Iran’s growing reliance on overland freight

The United States designated three Iranian railway companies on October 1. As trade faces disruption at sea, freight links to China offer Iran an alternative with limited capacity and uncertain delivery times.

An Iranian Railways locomotive hauling a freight train across a bridge in a river canyon.
An Iranian Railways locomotive hauls a freight train through the Gharanghu River canyon between Meyaneh and Maragha, Iran, in 2017. File photograph. Kabelleger / David Gubler, RAI 60-980 Babak - Khorasanak (resized and converted to WebP). CC BY-SA 4.0.Image sourceImage licence: CC BY-SA 4.0
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Iran’s overland freight routes face new pressure after the United States designated three Iranian railway companies on October 1. DW reported on October 21 that rail links to China and neighboring countries have become more important as maritime trade faces disruption, although delays and limited capacity constrain their use.

The U.S. Treasury named the Islamic Republic of Iran Railway Company, Raja Passenger Trains Company and Sherkat-E Rah Ahan-E Khamle-O-Naghle in its October 1 action. It said the companies were designated under Executive Order 13902 for operating in Iran’s rail sector. DW reported that the same action also targeted seven automakers and five foreign suppliers of automotive parts.

How much freight can Iran move by rail?

Iran’s network has about 15,000 kilometers of main and secondary lines and carried around 44 million tons of freight in the Iranian year ending in March 2026, up from about 40 million tons a year earlier, according to railway official Shahriar Naghizadeh, whom DW cited via Mehr. He put the target for the current Iranian year at 54 million tons. DW reported that 13 rail crossings connect Iran with neighboring markets and routes toward Central Asia and China.

DW cited a Bloomberg report that trains from China to Tehran increased from roughly one a week before the U.S. blockade to one every three or four days afterward. One train that left China in September carried automotive parts, consumer goods and other cargo through Kazakhstan, Uzbekistan and Turkmenistan. Its advertised journey was 14 to 16 days.

Why rail deliveries face delays

A Chinese freight company told DW that rail freight from western China to Tehran could take 50 to 60 days under current conditions, while road transport on a similar route took about 22 to 25 days. It cited border inspections, customs procedures and train availability. DW also identified changes in track gauge, payment problems and sanctions as possible sources of delay.

Alireza Salavati, managing director of Middle East Analytica, told DW that rail cannot replace sea freight, which normally carries far larger volumes at lower unit costs. He said rail is more useful for automotive components, machinery, electronics and other industrial inputs when a dependable supply matters more than the lowest shipping cost. Banks, insurers and freight operators will also have to decide how to handle dealings involving the designated companies; the effect on actual freight volumes is not yet clear.

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