A Foreign Company’s View of Northern Sea Route Technology and Infrastructure — Perceived Problems and Uncertainties

Abstract

In the shipping business, there are two kinds of services: tramp business and liner trade. Major cargoes carried by tramp vessels are oil, iron ore, coal, grain and various other bulk cargoes; global trading volume of the respective cargoes are listed below in Table 1. Crude oil is also carried on tramp basis, and the types of vessels are ULCCNLCC. The major trading routes for crude oil originate from the Gulf and go to the Far East and Europe. In the case of iron ore, the major trading routes go from Australia to the Far East, and from Brazil to Europe and the Far East. As to coal, large volumes are coming from Australia to the Far East, from South Africa to Europe, and from North America to the Far East. The routes for grain mainly go from North America to the Far East and Europe, from South America to Europe/the Far East, and from Australia to the Far East and other areas. The major trading routes for bulk cargoes go from the Southern Hemisphere to the Northern Hemisphere, which is not much related to the Northern Sea Route. In the tramp business, companies have to assign suitable vessels, according to the cargo contents to load, and its cargo readiness. There exist more than 3,200 tankers and 5,000 bulk carriers in the world. Those vessels are, in some cases, assigned under a long-term contract. In other cases, companies come into the tramp market, charter a suitable vessel out of the market, depending on the vessel's quality/charter-rate, schedule, etc. In the liner trade, almost all cargoes are carried in container style (20'/40') by Full Container vessels. The main feature of liner service is to maintain a fixed schedule, based on the shipping timetable. Recently, a weekly service in each port has become the minimum requirement for shipping companies: otherwise they will fail to gain the patronage of shippers/consignees of cargoes.