Arctic Shipping

Effects of changing ice conditions on the economic viability of the Northern Sea Route

What do the results tell us?

Though the potential melting of Arctic ice is definitely a negative impact for global climate and the environment, it also holds an  opportunity to shorten maritime trade routes and reduce fuel demand and emissions. Further development of the Northern Sea Route (NSR) is generally associated with shipment of primary materials and resources. Our results show that with the observed state of rapid ice melting in the Arctic, the NSR could be used as an express service for goods with a high value of time between Northern Asian ports (Yokohama) and European/Russian ports (Hamburg, Rotterdam, Saint-Petersburg), though it could face competition from the Eurasian (Trans-Siberian) Railways (TSR).

read more >>

What can we do with the results?

This case is special since it does not concern a defensive measure. Therefore, we could call the results ‘enhanced' automatic adaptation, though use of the NSR would require a number of investments. First of all, the type of (container) ship that could fully exploit the possibility of arctic shipping is not available, at least not with modifications to current vessels. Second, there are about 20 ports available along the route, but only small minorities of these are fully operational and adapted to containers. Thirdly, there is a severe lack of supporting services (icebreaking, search & rescue, early warning system, insurance) that would enable Arctic shipping.

read more >>

How are the results obtained?

The feasibility of the Arctic Shipping was analysed using a transport modelling research tool, the World Container Model (WCM). This is (to our knowledge) the first time a model is used to allow a full comparison of the Northern Sea Route in comparison with other competing routes based on a comprehensive network allocation model. 

read more >>

What are the broader applications?

Unlike the defensive situations presented in other case studies, the use of Arctic routes for global shipping presents Europe with an opportunity. Besides this difference, the Arctic shipping case also presents Europe as a region within the global market. The use of the World Container Model or similar models illustrates the interdependence and resilience of European economy within the World economy. Since European economy is dependent upon stable global trade conditions - possibly jeopardized by climate change – this is of critical relevance.

read more >>

Further Information

Contact

Christophe Heyndrickx (Transport & Mobility Leuven) 
E-mail: christophe.Heyndrickx@tmleuven.beadriaan.perrels@fmi.fi

Adriaan Perrels (FMI)
E-mail: adriaan.perrels@fmi.fi

Strategy Robustness Visualisation Method (SRVM)

The Northern Sea Route (NSR) provides opportunities for maritime trade

  • The NSR provides an opportunity for maritime trade, however this can only be realised when various factors are sufficiently conducive mainly: 1) longer and reliable ice-free periods, 2) availability of enough support structure (ports, efficient administration, ice-breaking etc.) 3) continued development of the European-Asian trade.
  • We find that under reasonable conditions a transit of container vessels using a combined Suez – NSR trade route is possible on regular basis. In the most optimistic case (high growth of trade in the SSP5 scenario and high climate change in RCP 8.5 scenario) trade potential reaches around 2.5 million TEU's or 800-900 transits per year.
  • Under less than optimal circumstances (a more fragmented and closed global economy assumed in the SSP4 scenario) or low climate change (RCP 2.6) the potential trade is significantly less and may not surpass 500,000 TEU's.
  • In each scenario the NSR link would draw mainly containerised goods with a high value of time (Chemicals, Vehicles, Machinery)

Container transport in TUE for different goods under different climate scenarios

  • Introducing competition between the NSR and other infrastructures, we find that there is a non-negligible degree of competition with the Trans-Siberian railway line (TSR) especially for those goods with a high value of time.
  • In most scenarios, the Trans-Siberian railway line (on the basis of total transport costs) provides a more interesting alternative for maritime flows using the Suez Canal than the NSR and may potentially draw more than 3.5 million TEU's by 2040. However, the model used did not take into account all capacity restrictions for the TSR. Therefore this may be an exaggeration, but the issue of possible competition is clear.

Competition between the Northern Sea Route (NSR) and the Trans-Siberian Route (TSR) for container transport in TUE under different climate scenarios

read more >>