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Relevance of the Northern Sea Route (NSR) for bulk shipping

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  • Pierre, Cariou
  • Olivier, Faury

Abstract

Some scholars consider that today’s market conditions are in favor of the Northern Sea Route (NSR) rather than the Suez Canal Route (SCR). However, the number of bulk carriers using the NSR remains extremely limited, despite higher fuel prices since 2009 and subsequent significant fuel savings. In 2013, there were 53 transits via the Arctic, out of which 27 by oil tankers and 6 by bulk carriers. In this article we show that this result might be attributable to a factor, which is not considered in most studies: the spot freight rate to fuel ratio which governs ship owners’ decisions regarding the sailing speed. Due to a low ratio since 2011, the speed of vessels on the SCR is at its lowest level, and potential NSR fuel savings are too limited to provide a viable alternative. We further argue that, contrary to most studies, internalizing NSR environmental benefits marginally improves the attractiveness of the NSR.

Suggested Citation

  • Pierre, Cariou & Olivier, Faury, 2015. "Relevance of the Northern Sea Route (NSR) for bulk shipping," Transportation Research Part A: Policy and Practice, Elsevier, vol. 78(C), pages 337-346.
    • Handle: RePEc:eee:transa:v:78:y:2015:i:c:p:337-346
    DOI: 10.1016/j.tra.2015.05.020
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    References listed on IDEAS

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    1. Julienne Stroeve & Mark Serreze & Marika Holland & Jennifer Kay & James Malanik & Andrew Barrett, 2012. "The Arctic’s rapidly shrinking sea ice cover: a research synthesis," Climatic Change, Springer, vol. 110(3), pages 1005-1027, February.
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    Cited by:

    1. Rashid, Khalid & Safdarnejad, Seyed Mostafa & Ellingwood, Kevin & Powell, Kody M., 2019. "Techno-economic evaluation of different hybridization schemes for a solar thermal/gas power plant," Energy, Elsevier, vol. 181(C), pages 91-106.
    2. Christian Finnsgård & Joakim Kalantari & Zeeshan Raza & Violeta Roso & Johan Woxenius, 2018. "Swedish shippers’ strategies for coping with slow-steaming in deep sea container shipping," Journal of Shipping and Trade, Springer, vol. 3(1), pages 1-24, December.
    3. Zhang, Chi & Zhang, Di & Zhang, Mingyang & Lang, Xiao & Mao, Wengang, 2020. "An integrated risk assessment model for safe Arctic navigation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 142(C), pages 101-114.
    4. Lin, Dung-Ying & Chang, Yu-Ting, 2018. "Ship routing and freight assignment problem for liner shipping: Application to the Northern Sea Route planning problem," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 110(C), pages 47-70.
    5. Zeng, Qingcheng & Lu, Tingyu & Lin, Kun-Chin & Yuen, Kum Fai & Li, Kevin X., 2020. "The competitiveness of Arctic shipping over Suez Canal and China-Europe railway," Transport Policy, Elsevier, vol. 86(C), pages 34-43.

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