IDEAS home Printed from https://ideas.repec.org/a/eee/transa/v151y2021icp259-283.html
   My bibliography  Save this article

Feasibility of the Northern Sea Route for seasonal transit navigation: The role of ship speed on ice and alternative fuel types for the oil product tanker market

Author

Listed:
  • Theocharis, Dimitrios
  • Rodrigues, Vasco Sanchez
  • Pettit, Stephen
  • Haider, Jane

Abstract

The feasibility of the Northern Sea Route is assessed for seasonal operations of oil product tankers using alternative fuel types. A speed optimisation model is used that minimises the required freight rate (RFR) of a Long Range 2 (LR2) tanker against alternative routes. A cost model is developed that incorporates real hourly speed data from tanker voyages between the 2011 and 2019 summer/autumn seasons, and primary and secondary data regarding cost and operational factors. The analysis is based on naphtha and jet fuel/kerosene trades between Europe and Asia. A prospective ban on the use of High Sulphur Fuel Oil (HSFO) in the Arctic, and alternative fuels, such as the new Very Low Sulphur Fuel Oil (VLSFO) and Liquified Natural Gas (LNG) are included to take into account of the International Maritime Organisation (IMO) 2020 global sulphur limit and its long-term strategy towards the reduction of greenhouse gas emissions.

Suggested Citation

  • Theocharis, Dimitrios & Rodrigues, Vasco Sanchez & Pettit, Stephen & Haider, Jane, 2021. "Feasibility of the Northern Sea Route for seasonal transit navigation: The role of ship speed on ice and alternative fuel types for the oil product tanker market," Transportation Research Part A: Policy and Practice, Elsevier, vol. 151(C), pages 259-283.
    • Handle: RePEc:eee:transa:v:151:y:2021:i:c:p:259-283
    DOI: 10.1016/j.tra.2021.03.013
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0965856421000690
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tra.2021.03.013?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Theocharis, Dimitrios & Rodrigues, Vasco Sanchez & Pettit, Stephen & Haider, Jane, 2019. "Feasibility of the Northern Sea Route: The role of distance, fuel prices, ice breaking fees and ship size for the product tanker market," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 129(C), pages 111-135.
    2. Hua Xu & Dong Yang & Jinxian Weng, 2018. "Economic feasibility of an NSR/SCR-combined container service on the Asia-Europe lane: a new approach dynamically considering sea ice extent," Maritime Policy & Management, Taylor & Francis Journals, vol. 45(4), pages 514-529, May.
    3. Zhao, Hui & Hu, Hao & Lin, Yisong, 2016. "Study on China-EU container shipping network in the context of Northern Sea Route," Journal of Transport Geography, Elsevier, vol. 53(C), pages 50-60.
    4. Beckmann, Joscha & Czudaj, Robert, 2013. "Is there a homogeneous causality pattern between oil prices and currencies of oil importers and exporters?," Energy Economics, Elsevier, vol. 40(C), pages 665-678.
    5. Victor Chang & Lihao Ni & Jingqi Zhang & Taiyu Li, 2020. "The current trends and overview for portfolio management," International Journal of Business and Systems Research, Inderscience Enterprises Ltd, vol. 14(4), pages 434-454.
    6. Lindstad, Haakon & Asbjørnslett, Bjørn E. & Strømman, Anders H., 2011. "Reductions in greenhouse gas emissions and cost by shipping at lower speeds," Energy Policy, Elsevier, vol. 39(6), pages 3456-3464, June.
    7. Laurent Fedi & Olivier Faury & Daria Gritsenko, 2018. "The impact of the Polar Code on risk mitigation in Arctic waters: a “toolbox” for underwriters?," Maritime Policy & Management, Taylor & Francis Journals, vol. 45(4), pages 478-494, May.
    8. Agur, Itai & Ari, Anil & Dell’Ariccia, Giovanni, 2022. "Designing central bank digital currencies," Journal of Monetary Economics, Elsevier, vol. 125(C), pages 62-79.
    9. Ryuichi Shibasaki & Takashi Usami & Masahiko Furuichi & Hiroyuki Teranishi & Hironori Kato, 2018. "How do the new shipping routes affect Asian liquefied natural gas markets and economy? Case of the Northern Sea Route and Panama Canal expansion," Maritime Policy & Management, Taylor & Francis Journals, vol. 45(4), pages 543-566, May.
    10. Lindstad, Elizabeth & Rehn, Carl Fredrik & Eskeland, Gunnar S., 2017. "Sulphur Abatement Globally in Maritime Shipping," Discussion Papers 2017/8, Norwegian School of Economics, Department of Business and Management Science.
    11. Zhang, Yiru & Meng, Qiang & Ng, Szu Hui, 2016. "Shipping efficiency comparison between Northern Sea Route and the conventional Asia-Europe shipping route via Suez Canal," Journal of Transport Geography, Elsevier, vol. 57(C), pages 241-249.
    12. Masahiko Furuichi & Natsuhiko Otsuka, 2015. "Proposing a common platform of shipping cost analysis of the Northern Sea Route and the Suez Canal Route," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 17(1), pages 9-31, March.
    13. Chuffart, Thomas & Hooper, Emma, 2019. "An investigation of oil prices impact on sovereign credit default swaps in Russia and Venezuela," Energy Economics, Elsevier, vol. 80(C), pages 904-916.
    14. Faury, Olivier & Cariou, Pierre, 2016. "The Northern Sea Route competitiveness for oil tankers," Transportation Research Part A: Policy and Practice, Elsevier, vol. 94(C), pages 461-469.
    15. Gjolberg, Ole & Johnsen, Thore, 1999. "Risk management in the oil industry: can information on long-run equilibrium prices be utilized?," Energy Economics, Elsevier, vol. 21(6), pages 517-527, December.
    16. Laurent Fedi & Olivier Faury & Daria Gritsenko, 2018. "The impact of the Polar Code on risk mitigation in Arctic waters: a ‘Toolbox’ for underwriters?," Post-Print hal-02065910, HAL.
    17. Hongwei Liu & Yajing Gu & Yong-Gang Lin & Yang-Jian Li & Wei Li & Hongbin Zhou, 2020. "Improved Blade Design for Tidal Current Turbines," Energies, MDPI, vol. 13(10), pages 1-16, May.
    18. Jonathan Ashworth & Charles A.E. Goodhart, 2020. "The Surprising Recovery of Currency Usage," International Journal of Central Banking, International Journal of Central Banking, vol. 16(3), pages 239-277, June.
    19. Jinyan Li & Alan Macnaughton, 2020. "Current Tax Reading," Canadian Tax Journal, Canadian Tax Foundation, vol. 68(3), pages 909-929.
    20. Chuang, Ming-Che & Wen, Chin-Hsiang & Lin, Shih-Kuei, 2020. "Valuation and empirical analysis of currency options," International Review of Economics & Finance, Elsevier, vol. 66(C), pages 71-91.
    21. Gustavo Adler & Camila Casas & Luis M. Cubeddu & Gita Gopinath & Nan Li & Sergii Meleshchuk & Carolina Osorio Buitron & Damien Puy & Yannick Timmer, 2020. "Dominant Currencies and External Adjustment," IMF Staff Discussion Notes 20/05, International Monetary Fund.
    22. Tomi Solakivi & Tuomas Kiiski & Lauri Ojala, 2018. "The impact of ice class on the economics of wet and dry bulk shipping in the Arctic waters," Maritime Policy & Management, Taylor & Francis Journals, vol. 45(4), pages 530-542, May.
    23. Faury, Olivier & Cheaitou, Ali & Givry, Philippe, 2020. "Best maritime transportation option for the Arctic crude oil: A profit decision model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).
    24. Dmitry Yumashev & Karel Hussen & Johan Gille & Gail Whiteman, 2017. "Towards a balanced view of Arctic shipping: estimating economic impacts of emissions from increased traffic on the Northern Sea Route," Climatic Change, Springer, vol. 143(1), pages 143-155, July.
    25. Theocharis, Dimitrios & Pettit, Stephen & Rodrigues, Vasco Sanchez & Haider, Jane, 2018. "Arctic shipping: A systematic literature review of comparative studies," Journal of Transport Geography, Elsevier, vol. 69(C), pages 112-128.
    26. Gustavo Adler & Camila Casas & Mr. Luis M. Cubeddu & Ms. Gita Gopinath & Ms. Nan Li & Sergii Meleshchuk & Ms. Carolina Osorio-Buitron & Mr. Damien Puy & Mr. Yannick Timmer, 2020. "Dominant Currencies and External Adjustment," IMF Staff Discussion Notes 2020/005, International Monetary Fund.
    27. Shusen Qi & Steven Ongena, 2020. "Fuel the Engine: Bank Credit and Firm Innovation," Journal of Financial Services Research, Springer;Western Finance Association, vol. 57(2), pages 115-147, April.
    28. Lasserre, Frédéric & Pelletier, Sébastien, 2011. "Polar super seaways? Maritime transport in the Arctic: an analysis of shipowners’ intentions," Journal of Transport Geography, Elsevier, vol. 19(6), pages 1465-1473.
    29. Adland, Roar & Cariou, Pierre & Wolff, Francois-Charles, 2020. "Optimal ship speed and the cubic law revisited: Empirical evidence from an oil tanker fleet," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 140(C).
    30. Yang, Lu & Cai, Xiao Jing & Hamori, Shigeyuki, 2017. "Does the crude oil price influence the exchange rates of oil-importing and oil-exporting countries differently? A wavelet coherence analysis," International Review of Economics & Finance, Elsevier, vol. 49(C), pages 536-547.
    31. Olivier Faury & Pierre Cariou, 2016. "The Northern Sea Route competitiveness for oil tankers," Post-Print hal-02072732, HAL.
    32. Albert Hiesl & Amela Ajanovic & Reinhard Haas, 2020. "On current and future economics of electricity storage," Greenhouse Gases: Science and Technology, Blackwell Publishing, vol. 10(6), pages 1176-1192, December.
    33. Liu, Miaojia & Kronbak, Jacob, 2010. "The potential economic viability of using the Northern Sea Route (NSR) as an alternative route between Asia and Europe," Journal of Transport Geography, Elsevier, vol. 18(3), pages 434-444.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Theocharis, Dimitrios & Rodrigues, Vasco Sanchez & Pettit, Stephen & Haider, Jane, 2019. "Feasibility of the Northern Sea Route: The role of distance, fuel prices, ice breaking fees and ship size for the product tanker market," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 129(C), pages 111-135.
    2. Xu, Hua & Yin, Zhifang, 2021. "The optimal icebreaking tariffs and the economic performance of tramp shipping on the Northern Sea Route," Transportation Research Part A: Policy and Practice, Elsevier, vol. 149(C), pages 76-97.
    3. Rigot-Müller, Patrick & Cheaitou, Ali & Etienne, Laurent & Faury, Olivier & Fedi, Laurent, 2022. "The role of polarseaworthiness in shipping planning for infrastructure projects in the Arctic: The case of Yamal LNG plant," Transportation Research Part A: Policy and Practice, Elsevier, vol. 155(C), pages 330-353.
    4. Sibul, Gleb & Jin, Jian Gang, 2021. "Evaluating the feasibility of combined use of the Northern Sea Route and the Suez Canal Route considering ice parameters," Transportation Research Part A: Policy and Practice, Elsevier, vol. 147(C), pages 350-369.
    5. Joseph, Lambert & Giles, Thomas & Nishatabbas, Rehmatulla & Tristan, Smith, 2021. "A techno-economic environmental cost model for Arctic shipping," Transportation Research Part A: Policy and Practice, Elsevier, vol. 151(C), pages 28-51.
    6. Wang, Yangjun & Liu, Kefeng & Zhang, Ren & Qian, Longxia & Shan, Yulong, 2021. "Feasibility of the Northeast Passage: The role of vessel speed, route planning, and icebreaking assistance determined by sea-ice conditions for the container shipping market during 2020–2030," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 149(C).
    7. Pierre Cariou & Ali Cheaitou & Olivier Faury & Sadeque Hamdan, 2021. "The feasibility of Arctic container shipping: the economic and environmental impacts of ice thickness," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 23(4), pages 615-631, December.
    8. Dai, Lei & Jing, Danyue & Hu, Hao & Wang, Zhaojing, 2021. "An environmental and techno-economic analysis of transporting LNG via Arctic route," Transportation Research Part A: Policy and Practice, Elsevier, vol. 146(C), pages 56-71.
    9. Koçak, Saim Turgut & Yercan, Funda, 2021. "Comparative cost-effectiveness analysis of Arctic and international shipping routes: A Fuzzy Analytic Hierarchy Process," Transport Policy, Elsevier, vol. 114(C), pages 147-164.
    10. Olgun Aydin & Cansu Altunbas & Elvan Hayat, 2021. "Using Text Mining Techniques to Understand the Economic Effects of COVID-19 Pandemic," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 4), pages 760-774.
    11. Faury, Olivier & Cheaitou, Ali & Givry, Philippe, 2020. "Best maritime transportation option for the Arctic crude oil: A profit decision model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).
    12. Benz, Lukas & Münch, Christopher & Hartmann, Evi, 2021. "Fuzzy-based decision analysis on Arctic transportation: A guidance for freight shipping companies," Chapters from the Proceedings of the Hamburg International Conference of Logistics (HICL), in: Jahn, Carlos & Kersten, Wolfgang & Ringle, Christian M. (ed.), Adapting to the Future: Maritime and City Logistics in the Context of Digitalization and Sustainability. Proceedings of the Hamburg International Conf, volume 32, pages 375-400, Hamburg University of Technology (TUHH), Institute of Business Logistics and General Management.
    13. Laurent Fedi & Olivier Faury & Laurent Etienne & Ali Cheaitou & Patrick Rigot-Muller, 2024. "Application of the IMO taxonomy on casualty investigation: Analysis of 20 years of marine accidents along the North-East Passage," Post-Print hal-04483233, HAL.
    14. Jingmiao Zhou & Kjetil Fagerholt & Yongjia Liu & Yuzhe Zhao, 2023. "Profitability prospects for container roll-on/roll-off shipping on the Northern Sea Route (NSR)," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 25(4), pages 778-816, December.
    15. Benz, Lukas & Münch, Christopher & Hartmann, Evi, 2021. "Development of a search and rescue framework for maritime freight shipping in the Arctic," Transportation Research Part A: Policy and Practice, Elsevier, vol. 152(C), pages 54-69.
    16. Theocharis, Dimitrios & Pettit, Stephen & Rodrigues, Vasco Sanchez & Haider, Jane, 2018. "Arctic shipping: A systematic literature review of comparative studies," Journal of Transport Geography, Elsevier, vol. 69(C), pages 112-128.
    17. Lasserre, Frédéric & Beveridge, Leah & Fournier, Mélanie & Têtu, Pierre-Louis & Huang, Linyan, 2016. "Polar seaways? Maritime transport in the Arctic: An analysis of shipowners' intentions II," Journal of Transport Geography, Elsevier, vol. 57(C), pages 105-114.
    18. Liu, ChengCheng & Lian, Feng & Yang, Zhongzhen, 2021. "Comparing the minimal costs of Arctic container shipping between China and Europe: A network schemes perspective," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 153(C).
    19. Zheng Wan & Jiawei Ge & Jihong Chen, 2018. "Energy-Saving Potential and an Economic Feasibility Analysis for an Arctic Route between Shanghai and Rotterdam: Case Study from China’s Largest Container Sea Freight Operator," Sustainability, MDPI, vol. 10(4), pages 1-13, March.
    20. D. O. Eliseev & Yu. V. Naumova, 2021. "Simulation of Transit Transportation along the Northern Sea Route under Climate Change," Studies on Russian Economic Development, Springer, vol. 32(2), pages 160-168, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:151:y:2021:i:c:p:259-283. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.