Multi criteria evaluation of beneficial effect of commercializing Northern Sea Route on Europe and Asia countries

Abstract

Mainly due to global warming, ice melting in the Arctic is accelerating and this trend is expected to continue, which will provide another efficient alternative sea route between Western Europe and East Asia for marine transportation of goods. Compared to the existing Suez Canal Route, the Northern Sea Route will be economically attractive and viable opportunity in international trade aspects for the two parties. European countries as well as East Asian countries are trying to benefit from it by actively participating in several activities towards development and commercialization of the Arctic route.As transport through the Arctic route continues to develop, we investigate beneficial (competitive) impact of the Northern Sea Route (NSR) on three Asian countries (China, Korea, and Japan) and four major European counterpart countries (the Netherlands, the United Kingdom, Germany, and France). For the study we use grey relational analysis with four quantitative influence factors (distance, transport cost, iceberg cost, and trade volume) to rank countries by their commercial benefits from opening the NSR.Beneficial effect on each country can be summarized as follows: (i) for European countries, the ranking order is the Netherlands>Germany>the United Kingdom>France; (ii) for Asian countries, the ranking order is Japan>Korea>China. The overall ranking results show that the Netherlands and Japan benefit most from opening the NSR.