Evaluating the feasibility of combined use of the Northern Sea Route and the Suez Canal Route considering ice parameters

Abstract

Even though the Arctic ice is melting and Polar routes are being extensively studied, the amount of cargo shipped through the Northern Sea Route (NSR) remains low. Employing current data on the NSR operation provided by China Ocean Shipping Company, this paper investigates annual profitability of the NSR-SCR combined use, when a vessel sails through the NSR in summer and the SCR in winter. A Handysize general cargo ship is used as a model vessel since it allows reaching nearly maximum load rate and can sail through shallow areas of the NSR. This article proposes including ice thickness and ice conditions in the traditional cost comparison. The first parameter directly affects sailing speed, and hence other cost variables, while the second one is included in the official NSR navigation rules and connected with icebreaker escort fee. This paper also contributes to the existing literature by considering total shipping cost as a function of a vessel's ice class with corresponding building premiums and fuel consumption increments. The proposed approach is easily replicable, so shipping companies might use it to rethink their positions on shipping through the NSR. The overall conservative comparison reveals that the NSR-SCR combined shipping scheme can only be more competitive than sailing through the SCR if a shipping company provides a sufficient load rate on the NSR leg and uses a ship of a reliable ice class to navigate throughout the summer navigation. The NSR-SCR combined shipping scheme becomes attractive if the NSR leg is short, and the crude oil price is high.