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The environmental costs and economic implications of container shipping on the Northern Sea Route

Author

Listed:
  • Shengda Zhu
  • Xiaowen Fu
  • Adolf K.Y. Ng
  • Meifeng Luo
  • Ying-En Ge

Abstract

The Northern Sea Route (NSR) has tremendous potential for ocean shipping between Europe and Asia due to the savings from shorter transit time and distance. However, the Arctic area is environmentally vulnerable and thus there is a trade-off between NSR’s impacts on environment vs. its economic benefits, especially when compared with the traditional route, such as through the Suez Canal Route (SCR). This study estimates the market shares of different transport modes and alternative shipping routes for the container transport market between Europe and Asia, and the resulting environmental costs. Our result suggests that NSR can be a viable option under the status quo. However, its environmental costs tend to be higher than SCR due to small ship size and low load factor in the present, thus the development of NSR would lead to worse environment outcomes. If these issues can be resolved, NSR can benefit from lower operational and environmental costs, which will lead to higher market share and social welfare. Otherwise, increased use of NSR may lead to higher total environment costs than the status quo.

Suggested Citation

  • Shengda Zhu & Xiaowen Fu & Adolf K.Y. Ng & Meifeng Luo & Ying-En Ge, 2018. "The environmental costs and economic implications of container shipping on the Northern Sea Route," Maritime Policy & Management, Taylor & Francis Journals, vol. 45(4), pages 456-477, May.
    • Handle: RePEc:taf:marpmg:v:45:y:2018:i:4:p:456-477
    DOI: 10.1080/03088839.2018.1443228
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    Cited by:

    1. Theo Notteboom & Hercules Haralambides & Kevin Cullinane, 2024. "The Red Sea Crisis: ramifications for vessel operations, shipping networks, and maritime supply chains," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 26(1), pages 1-20, March.
    2. Liu, ChengCheng & Lian, Feng & Yang, Zhongzhen, 2021. "Comparing the minimal costs of Arctic container shipping between China and Europe: A network schemes perspective," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 153(C).
    3. Joseph, Lambert & Giles, Thomas & Nishatabbas, Rehmatulla & Tristan, Smith, 2021. "A techno-economic environmental cost model for Arctic shipping," Transportation Research Part A: Policy and Practice, Elsevier, vol. 151(C), pages 28-51.
    4. Tao, Xiangyang & Zhao, Jing & Hong, Jingke & Xiao, Fei, 2024. "Pathway towards carbon peaking cities in the Chinese transport sector," Transport Policy, Elsevier, vol. 153(C), pages 39-53.
    5. Theocharis, Dimitrios & Rodrigues, Vasco Sanchez & Pettit, Stephen & Haider, Jane, 2019. "Feasibility of the Northern Sea Route: The role of distance, fuel prices, ice breaking fees and ship size for the product tanker market," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 129(C), pages 111-135.
    6. Laurent Fedi & Olivier Faury & Laurent Etienne & Ali Cheaitou & Patrick Rigot-Muller, 2024. "Application of the IMO taxonomy on casualty investigation: Analysis of 20 years of marine accidents along the North-East Passage," Post-Print hal-04483233, HAL.
    7. Koçak, Saim Turgut & Yercan, Funda, 2021. "Comparative cost-effectiveness analysis of Arctic and international shipping routes: A Fuzzy Analytic Hierarchy Process," Transport Policy, Elsevier, vol. 114(C), pages 147-164.
    8. Ran Zhang & Jasmine Siu Lee Lam & Zhuo Sun, 2024. "Evaluating the impact of Northern Sea Route fuel costs on bilateral trade between China and the EU," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 26(3), pages 436-461, September.
    9. D. O. Eliseev & Yu. V. Naumova, 2021. "Simulation of Transit Transportation along the Northern Sea Route under Climate Change," Studies on Russian Economic Development, Springer, vol. 32(2), pages 160-168, March.
    10. Alina Kovalenko & Terje Andreas Mathisen & Jeroen Pruyn, 2024. "Generalized transport costs in intermodal shipping: the context of the Northeast Passage," Journal of Shipping and Trade, Springer, vol. 9(1), pages 1-29, December.
    11. Pierre Cariou & Ali Cheaitou & Olivier Faury & Sadeque Hamdan, 2021. "The feasibility of Arctic container shipping: the economic and environmental impacts of ice thickness," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 23(4), pages 615-631, December.
    12. Dai, Lei & Jing, Danyue & Hu, Hao & Wang, Zhaojing, 2021. "An environmental and techno-economic analysis of transporting LNG via Arctic route," Transportation Research Part A: Policy and Practice, Elsevier, vol. 146(C), pages 56-71.
    13. Panahi, Roozbeh & Ng, Adolf K.Y. & Afenyo, Mawuli & Lau, Yui-yip, 2021. "Reflecting on forty years contextual evolution of arctic port research: The past and now," Transportation Research Part A: Policy and Practice, Elsevier, vol. 144(C), pages 189-203.
    14. Sibul, Gleb & Jin, Jian Gang, 2021. "Evaluating the feasibility of combined use of the Northern Sea Route and the Suez Canal Route considering ice parameters," Transportation Research Part A: Policy and Practice, Elsevier, vol. 147(C), pages 350-369.

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