Conference Publication Details
Mandatory Fields
Faury, O., Cheaitou, A., Etienne, L., Fedi, L., Rigot-Muller, P., Stephenson, S.
IAME 2019
How attractive is the Northern Sea Route for container shipping? An economic model
Optional Fields
Every year, COSCO sends a vessel with containers through the Arctic. This year, Maersk has followed suit with the voyage of the Venta, a 3,956 TEUs vessel. Meanwhile, Arctic shipping hubs are being planned, such as at the ice-free port of Murmansk. Currently, cargo shipped through the Northern Sea Route (NSR) is composed of raw materials from oil and gas exploitation, a market subject to volatile prices and finite resources. However, sustainable economic development cannot not be based entirely on commodities with these characteristics and that depends on international market volatility. Thus, the shipment of manufactured goods along the NSR may be the next step in its evolution. Academics agree on the general decline in ice extent and thickness; yet, variability in ice conditions and poorly charted bathymetry in shallow waters may hamper the development of the NSR as a periodic shipping lane for containers. The aim of this article is to define the relevant market for a maritime company using the NSR, shipping manufactured goods from Asia to Europe, using a new approach to consider sea ice variability and to stress the relevancy of Murmansk as a container hub. Based on historical environmental data and the POLARIS system, we look at the potential sailing period of an ice class 1A vessel according to three scenarios: optimistic, intermediate, and pessimistic. We also consider that the vessel could sail directly to Rotterdam or transship containers in Murmansk before reaching Rotterdam. For each scenario, we define the total cost of the navigation, the number of containers the vessel is able to load on a yearly basis, and hence the yearly loading capacity the NSR is able to provide for this vessel type. Our results show the transportation cost of a container between Rotterdam and Shanghai and the related potential transit time. Compared to the cost and transit time of container shipping by rail and via the Suez Canal route, we characterize the NSR market and the type of cargo that would fit with the NSR constraints.
Grant Details