From the Wall Street Journal, August 14:
Sending containerships through northern passage now makes financial sense because of high oil prices and climate change
Shipping cargo through an Arctic shortcut never made economic sense—until now.
Climate change and war in the Middle East are flipping the math that previously kept ships plying longer routes from Asia to Europe. A Chinese company on Saturday is starting the first regular cargo service to Europe through Arctic waters, seeking to reap the benefits of quicker travel time and less fuel use.
The shipper Sea Legend will dispatch the Dubai Tower from Ningbo, China, to Felixstowe in the U.K. on what it calls the Arctic Express, following a route along Russia’s north coast. The voyage by the vessel, which is capable of carrying 1,740 20-foot containers, is the biggest commercial step in the Arctic since a Maersk containership first completed the route in 2018.
Global warming is a big factor behind the new route, but it is not the only one. Nearly half the Arctic region’s summer ice—an area four times the size of Texas—has melted over five decades, clearing a fairly reliable path in the summer months. Meanwhile, high oil prices and attacks by Houthi rebels in the Red Sea have made the traditional routes costlier and more dangerous.
Beyond that, Beijing has ambitions to play a role in the Arctic’s future, lending a geopolitical dimension to the Chinese company’s shipping route.
Last year Sea Legend completed a trial run from Asia to Europe in a record 20 days. That is roughly half the time of a voyage via Africa’s Cape of Good Hope that many carriers now take because of the Red Sea uncertainty.
Fuel accounts for 70% or more of the costs while at sea, said Alan Murphy, a former Maersk analyst who runs research firm Sea-Intelligence.
Saving fuel by shortening the journey doesn’t automatically make a route profitable. Insurance premiums for the Arctic are 40% higher than the Cape of Good Hope route, said Jonathan Steenberg, an economist at credit insurer Coface. Sea Legend’s Arctic vessels are relatively small. And even after warming, an icebreaker is still sometimes needed to help the cargo ship.
But if the ship can go without an icebreaker, Coface said the Arctic route is now cheaper than a Cape of Good Hope voyage in some circumstances. It estimated that at current oil prices of around $90, the cost of shipping liquid bulk such as liquefied natural gas could drop roughly 33% compared with the Cape of Good Hope route, while dry bulk goods such as cereals would cost about 8% less....
....MUCH MORE
We have quite a few posts on China in the Arctic. If interested see:
November 2023 - "China Is Gaining Long-Coveted Role in Arctic, as Russia Yields"
For over a decade the Arctic and the Northern Sea Route were Putin's especial interests but now the Russian state doesn't have the financial resources to chase Putin's dream.
Which outros with
"China’s Emerging Strategies in the Arctic"
"China’s Polar Strategy: An Emerging Gray Zone?"
"Pentagon warns of risk of Chinese submarines in the Arctic"
"Don't Fear China's Arctic Takeover"
"How To Avoid A Naval Cold War In The High North"
Natural Gas: "Chinese oilmen make big discovery in Russian Arctic waters"
"China opens bids for first nuclear-powered icebreaker"
China seeks a more active role in the Arctic
China defines itself as a near-Arctic state and says it will actively participate with wisdom and strength to future protection and development. Roger that, wisdom and strength, over.Flashback, June 2018:
...On the other hand, if you read Xinhua's translation of January's "Full text: China's Arctic Policy" you'll note they call themselves a ‘Near-Arctic state’.Additionally China is couching their interest in terms of research:
This is to counter people like me using the 'non-polar' or 'non-Arctic' phrasing.
States from outside the Arctic region do not have territorial sovereignty in the Arctic, but they do have rights in respect of scientific research, navigation, overflight, fishing, laying of submarine cables and pipelines in the high seas and other relevant sea areas in the Arctic Ocean, and rights to resource exploration and exploitation in the Area, pursuant to treaties such as UNCLOS and general international law. In addition, Contracting Parties to the Spitsbergen Treaty enjoy the liberty of access and entry to certain areas of the Arctic, the right under conditions of equality and, in accordance with law, to the exercise and practice of scientific research, production and commercial activities such as hunting, fishing, and mining in these areas....
And more recently:
"From Space to the Polar Depths: China Aims for a Three-Dimensional Presence in the Arctic"
"China Expands Arctic Container Shipping With Record 14 Voyages in 2025" plus "Russia Deploys All Eight Nuclear Icebreakers for First Time to Keep Arctic Export Routes Open"
"Russia’s Arctic Shipping Route Turns Into “Dark Fleet” Corridor Used by 100 Sanctioned Vessels"
"Norway buys more subs for 'turbulent times' in the North Atlantic"
"China's Show of Force in ... the Arctic"
"Russia’s Rosatom and Chinese Firm to Establish Year-Round Arctic Shipping Route"
I wish they wouldn't do this. Those big nuclear icebreakers shuttling back and forth along Russia's North Coast, busting up the sea ice and lowering the albedo of the ice pack aren't doing the Arctic any favors....
Meanwhile, In The Arctic: "Svalbard-research becomes more important for China, professor says"
