Northern Sea Route More Expensive than Suez Canal for Container Shipping, German Expert Says

Paul Goble

            Staunton, October 24 – The Northern Sea Route may be a better route for bulk cargo between Europe and Asia than the traditional one via the Suez Canal, but it is unlikely to replace the latter as the less expensive and preferred route for the increasingly important container trade between the two, according to Burkhard Lemper.

            The Putin government has focused on bulk cargo shipping of oil, gas, coal and other raw materials rather than on container shipping of finished goods because Russia itself generates a great deal of the former and relatively little of the latter. But analysts, the German expert says, must recognize that the latter is increasingly more important than the latter in this trade.

            They must recognize, even if Moscow doesn’t, that the Northern Sea Route is “unsuitable” for container shipping and remains far more expensive than the current path through Suez, the specialist on trade at Bremen’s Institute for the Economy of Sea Shipping and Logistics (dw.com/ru/jekspert-severnyj-morskoj-put-dlja-kontejnerovozov-nevygoden/a-55360337).

            While the Northern Sea Route may be useful for bulk cargo, there are numerous economic and organizational reasons to be skeptical about its future role as route for finished goods, most of which now are shipped via containers.

            First of all, despite global warming, for almost half of the year, shipping along the Northern Sea Route will require that cargo vessels be accompanied by icebreakers. That increases costs significantly both because of charges for the icebreakers and because the vessels travel more slowly and the trip takes longer than the traditional route.

            Second, in contrast to bulk cargo vessels, those carrying containers are increasingly wider than the icebreakers that now exist. That means that the icebreakers must go back and forth to clear a path for them, something that will slow the passage of ships even further, increase costs, and make the route less attractive to shippers.

            Third, Lemper says, even cargo ships that can follow icebreakers will have to be strengthened to protect against ice. That will add to costs and reduce the amount of space available on them for carrying containers. Both will reduce profitability and lead many in the shipping business to conclude that going via Suez is still the better option.

            And fourth – and this is no small thing – there are almost no significant ports along the Northern Sea Route that ships in trouble can put into or deliver cargo. On the Suez route, in contrast, there are many such ports; and they help make the route profitable even if not everything loaded in Asia reaches Europe.

            There are few prospects that in the course of the next several decades at least Moscow will be able to change any of these limitations and so the Northern Sea Route may prove far less significant to international trade than its Moscow boosters now suggest, the German logistics expert concludes.