Shipping companies are closely watching the developments in the North Sea Route (NSR) but are not yet keen on starting commercial operations in the newly-launched sea lane.

While the NSR has been touted as a potential rival to the Suez Canal, operations there are still limited, with some firms just starting to test the feasibility of the route, which would dramatically slash transit time between Asia and Europe.

Shipping group A.P. Moller-Maersk said following its one-off trial last year that it won’t be utilizing the mostly frozen seaway in the near term, citing seasonal considerations and additional investments to operate in the route.

“As already said in relation to last year’s trial passage, we do not currently see the Northern Sea Route as a viable commercial alternative to existing east-west routes,” the Danish shipping giant told Asia Cargo News.

Seasonality of the route

“Today, the passage is only feasible for around three months a year, which may change with time. Furthermore, we also must consider that ice-classed vessels are required to make the passage, which would mean an additional investment,” it added.

This is not to say however that Maersk will not be on the lookout for possible opportunities to explore the NSR, which runs to the Bering Strait between Alaska and Siberia from the Barents Sea, near Russia’s border with Norway.

Several reports had said Maersk was in talks with Russia’s state-owned icebreaker Rosatomflot “for the transport of goods from the Far East to West Russia” via the Arctic.

“We are following the development in the region. We are seeing a growing demand for domestic traffic of goods within Russia, and we are exploring different possibilities to fulfil this demand,” Maersk further said in its statement to Asia Cargo News.

The NSR has seen increased traffic on the route as melting ice sheets, which have for decades made it difficult to sail through the rough ice conditions, have now opened up, usually from July to November, previously inaccessible Arctic routes facilitating at least two to three weeks shorter transit times between Asia and Europe.

This route is being considered a likely commercial shipping lane as Russia has already been using the NSR during warmer seasons to transport its energy exports.

Yang Ming Marine Transport said it will also be following the developments at the NSR, but the Taiwanese ocean shipping company has no immediate plan to utilize the sea lane.

“Yang Ming doesn’t have any plans to utilize the North Sea Route at the current stage and will closely observe the development of the said route,” it said in a statement to Asia Cargo News.

“Yang Ming always commits to providing quality service to our customers worldwide and will continue to enhance our service network. Although the utilization of the North Sea Route is not in our current strategic plans, we will keep an eye on its future development,” it added.

The world’s fifth-largest container carrier in terms of vessel capacity, Hapag-Lloyd, said separately that it may not operate in the route.

“We are not operating on the North Sea Route currently. I don’t think we have a plan to do it,” a spokesperson for Hapag-Lloyd (China) told Asia Cargo News.

The NSR has become a key political issue worldwide as Russian president Vladimir Putin announced last year that he wanted annual shipments on the Arctic route to reach as many as 80 million tons in 2024. Environmentalists, on the other hand, are warning that commercial operations there would lead to depletion of untouched marine life.

Shipments in the Northern Sea Route amounted to about 20 million tons in 2018. Estimates from the Russian Ministry of Natural Resources indicated that number would increase to 30 million tons in the course of 2019.

Environmental concerns

Some of the world’s shipping giants are, however, choosing to stay away from the route, citing potential environmental harm and the commercial viability of the route.

French shipping firm CMA CGM, for example, already announced it will not use the North Sea Route now or in the future “to protect the biodiversity of both the Arctic region and the entire planet.”

“The use of the Northern Sea Route will represent a significant danger to the unique natural ecosystems of this part of the world, mainly due to the numerous threats posed by accidents, oil pollution or collisions with marine wildlife,” Rodolphe Saadé, chairman and CEO of CMA CGM Group announced ahead of the August G7 meeting in Biarritz, France.

To avoid posing a “greater threat” to the environment, Saadé noted that none of the CMA CGM Group’s 500 vessels will use the Northern Sea Route along Siberia.

“CMA CGM makes the resolute choice to protect the environment and the planet’s biodiversity despite the major competitive advantage this route represents for shipping companies,” the company said in a statement.

Most recently, the Mediterranean Shipping Company (MSC) announced it will not use the Arctic route between Europe and Asia, also citing environmental concerns.

Russia already made its position on the feared environmental impact of using the route, saying earlier that it is in “full compliance with international law,” and will “do whatever is needed to provide security for marine traffic and gentle care of the very vulnerable ecosystem in the region.”

The International Maritime Organization (IMO) said recognizing that climate change is leading to more shipping in the polar regions, including the northern sea route, it is adopting measures like the Polar Code, which provides additional requirements for ships trading in the polar regions aimed to protect the polar environment.

“IMO is currently developing measures to reduce the risks of use and carriage of heavy fuel oil as fuel by ships in Arctic waters,” Natasha Brown, IMO spokesperson told Asia Cargo News.

“IMO is also looking at the application of the Polar Code to ships not currently covered by SOLAS,” she added, explaining that for ships trading in polar regions, the MARPOL and SOLAS treaties make mandatory the Polar Code, which provides additional measures for ships trading in those regions. For example, having equipment on board which can be operated in freezing conditions, specific voyage planning and so on.

Charlee C. Delavin

Asia Cargo News | Hong Kong