Feasibility of Container Shipping on the Northern Sea Route (NSR)

Abstract

In recent years global container shipping saw few major disrupting events that are likely to challenge container shipping business model. First, COVID-19 epidemic caused a major disruption to the global container shipping industry that became challenged by timely delivery of critical life-saving supplies. As a result of Covid-19, container trade volumes and container port volumes have declined over the first months of 2020 with container ship idling rate reaching 15%. Second, the blockage of the Evergreen mega conmanship vessel at the Suez Canal disrupted the global supply chain. Collectively, these events create a basis for questioning the efficiency of a business model relying only on major shipping corridors and using predominately mega containerships. The purpose of this research is to study container shipping along the Northern Sea Route (NSR), which is positioned as one of the emerging global shipping corridors. The Russian Federation is investing in NSR development and planning to launch a subsidized regular container shipment from the Far East to Murmansk or Saint Petersburg along the NSR on a testing base already this year, 2022. This study aiming at investigating the feasibility of container shipping on the NSR using a business model approach, we map existing and future capabilities of container shipping and public acceptance of such shipping by major players. The authors examine changing institutional environment and conduct a survey of major industry players, academia, administrators, and NGOs. The results of the study contribute to the literature on the NSR feasibility and provide practically relevant information to container shipping industry stakeholders.