The environmental costs and economic implications of container shipping on the Northern Sea Route

The Northern Sea Route (NSR) has tremendous potential for ocean shipping between Europe and Asia due to the savings from shorter transit time and distance. However, the Arctic area is environmentally vulnerable and thus there is a trade-off between NSR’s impacts on environment vs. its economic benefits, especially when compared with the traditional route, such as through the Suez Canal Route (SCR). This study estimates the market shares of different transport modes and alternative shipping routes for the container transport market between Europe and Asia, and the resulting environmental costs. Our result suggests that NSR can be a viable option under the status quo. However, its environmental costs tend to be higher than SCR due to small ship size and low load factor in the present, thus the development of NSR would lead to worse environment outcomes. If these issues can be resolved, NSR can benefit from lower operational and environmental costs, which will lead to higher market share and social welfare. Otherwise, increased use of NSR may lead to higher total environment costs than the status quo.     

Examining quick delivery at an affordable cost by the NSR/SCR-combined shipping in the age of Mega-ships

ABSTRACT

The Mega-ships, the maximum containerships represented by 20,000TEU-class (LOA:400m, Breadth: 60m, Draft: 16m) which are able to transit both the Malacca Strait and the Suez Canal, have emerged in 2013, aiming at lower shipping cost by economy of scale. At the same time, they inevitably increased port calls in a rotation to collect more cargo demand, resulting in the longer transit time than ever before. Taking this trend into account, the authors proposed the quick delivery scenario between East Asia and Northwest Europe by the NSR (Northern Sea Route)/SCR (Suez Canal Route)-combined shipping, of which 4,000 TEU ice-class containership transits the NSR during the summer season and the SCR in the wintertime, based on a year-round scheduled operation. The quick delivery scenario gives the shorter transit time at an affordable shipping cost depending on the NSR navigable season length. However, the quick delivery scenario cannot avoid uncertainties in navigation especially via the NSR in the summer season, due to rough weather, sea ice, low visibility and icing in the icy water section of the NSR. The authors preliminarily concluded that a year-round scheduled operation of the NSR/SCR-combined shipping will be secured, if the practical navigation schedule is appropriately prepared.