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Relevance of the Northern Sea Route (NSR) for bulk shipping

Author

Listed:
  • Pierre Cariou

    (Kedge BS - Kedge Business School)

  • Olivier Faury

    (Kedge BS - Kedge Business School)

Abstract

Some scholars consider that today's market conditions are in favor of the Northern Sea Route (NSR) rather than the Suez Canal Route (SCR). However, the number of bulk carriers using the NSR remains extremely limited, despite higher fuel prices since 2009 and subsequent significant fuel savings. In 2013, there were 53 transits via the Arctic, out of which 27 by oil tankers and 6 by bulk carriers. In this article we show that this result might be attributable to a factor, which is not considered in most studies: the spot freight rate to fuel ratio which governs ship owners' decisions regarding the sailing speed. Due to a low ratio since 2011, the speed of vessels on the SCR is at its lowest level, and potential NSR fuel savings are too limited to provide a viable alternative. We further argue that, contrary to most studies, internalizing NSR environmental benefits marginally improves the attractiveness of the NSR.

Suggested Citation

  • Pierre Cariou & Olivier Faury, 2015. "Relevance of the Northern Sea Route (NSR) for bulk shipping," Post-Print hal-02077034, HAL.
    • Handle: RePEc:hal:journl:hal-02077034
    DOI: 10.1016/j.tra.2015.05.020
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    Citations

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    Cited by:

    1. Rashid, Khalid & Safdarnejad, Seyed Mostafa & Ellingwood, Kevin & Powell, Kody M., 2019. "Techno-economic evaluation of different hybridization schemes for a solar thermal/gas power plant," Energy, Elsevier, vol. 181(C), pages 91-106.
    2. Patrick Chaumette, 2017. "Economic challenge and new maritime risks management: What blue growth? [Challenge économique et maîtrise des nouveaux risques maritimes : Quelle croissance bleue]," Post-Print hal-01793050, HAL.
    3. 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.
    4. Zhang, Chi & Zhang, Di & Zhang, Mingyang & Lang, Xiao & Mao, Wengang, 2020. "An integrated risk assessment model for safe Arctic navigation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 142(C), pages 101-114.
    5. Tuomas Kiiski & Tomi Solakivi & Juuso Töyli & Lauri Ojala, 2018. "Long-term dynamics of shipping and icebreaker capacity along the Northern Sea Route," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 20(3), pages 375-399, September.
    6. Zeng, Qingcheng & Lu, Tingyu & Lin, Kun-Chin & Yuen, Kum Fai & Li, Kevin X., 2020. "The competitiveness of Arctic shipping over Suez Canal and China-Europe railway," Transport Policy, Elsevier, vol. 86(C), pages 34-43.
    7. Wang, Hua & Zhang, Yiru & Meng, Qiang, 2018. "How will the opening of the Northern Sea Route influence the Suez Canal Route? An empirical analysis with discrete choice models," Transportation Research Part A: Policy and Practice, Elsevier, vol. 107(C), pages 75-89.
    8. 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.
    9. 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.
    10. 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.
    11. Christian Finnsgård & Joakim Kalantari & Zeeshan Raza & Violeta Roso & Johan Woxenius, 2018. "Swedish shippers’ strategies for coping with slow-steaming in deep sea container shipping," Journal of Shipping and Trade, Springer, vol. 3(1), pages 1-24, December.

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