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The Northern Sea Route

Updated: Feb 27, 2023

The Ever Given crisis is the perfect opportunity for Russia to promote the Northern Sea Route

The Russian Federation has always regarded the Arctic Sea's significance as a source of benefit. Indeed, already in early 2011, during a Conference on Arctic Ocean Shipping held in Arkhangelsk, Russia, Russian President Vladimir Putin stated that: “The Arctic is the shortcut between the largest markets of Europe and the Asia-Pacific region. It is an excellent opportunity to optimize costs."

The recent Suez Canal blockade that sparked alarm among business and government leaders, highlighting the vulnerability of one of the world's most important trade routes, represented a new opportunity to reinforce the idea of a Northern passage transit. The Northern Sea Route is a shipping lane that extends for about 4.800 km, which connects the Atlantic with the Pacific Ocean, passing along the Russian coasts of Siberia and the Far East. In recent years the Arctic corridor has become consistently relevant, as the number of ships using it to reach Europe, and vice versa to reach Asia, has increased. Additionally, the Maritime Executive demonstrated that the route is 40% shorter than the Suez Canal one, taking only an average of 20 days instead of 30. The reduction in route time means a reduction in fuel and, therefore, CO2 emissions, proving to be highly beneficial both economically and environmentally. Moreover, climate change and global warming partly contribute to its development as the northern seas are becoming increasingly less frozen, rendering commercial ship transit easier and smoother.


On March 23, 2021, Ever Given, one of the largest container ships present in the international market, lodged diagonally in the Suez Canal, blocking the busiest waterway connecting Asia to the Mediterranean via the Red Sea. The 400-meter-long vessel, registered in Panama and operated by the Taiwanese shipping company Evergreen, was transporting approximately 20,000 containers from China to the Dutch port of Rotterdam at the time of the accident.

Hundreds of ships were stranded for days, waiting for the canal to clear, causing thousands of dollars in losses.The Suez Canal, in fact, is responsible for distributing 12% of the world's products. Whilst the captain of Ever Given confirmed that the accident was caused by a sandstorm, the exact dynamics remain unknown. What is clear, however, is the economic loss that this event caused. According to Bloomberg Agency, 400 million dollars worth of goods passes through the Suez Canal every hour based on annual figures, amounting thus to a total of 9.6 billion dollars per day loss.

To circumvent the obstacle and deliver goods, if not on time, at least within a few days, some private companies, already affected by the pandemic, decided to change their route, dusting off old trading lanes. The African Route, which circumnavigates the African continent but is also longer and, above all, more dangerous due to the presence of pirates, particularly off the coasts of the Horn of Africa, proved to be the most common alternative.

Taking advantage of the Egyptian canal’s unfortunate blockage and the need for alternative international sea transport lanes, the Russian Federation used the opportunity to promote further the Northern Sea Route as a viable alternative to the Suez Canal.

The benefits of the Arctic sea transport corridor were confirmed by Vladimir Panov, a special representative of the Rosatom state nuclear corporation for Arctic development, who is in charge of the Arctic waterway's structural completion. During an interview with Interfax on March 25, 2021, Vladimir Panov stated:

"The Suez precedent has shown how fragile any route between Europe and Asia is. Therefore, the development of alternative routes is essential to guarantee sustainable international navigation. This increases the role of the Northern Sea Route, which has been ever more competitive from year to year. [...] The Northern Sea Route's development hedges logistical risks and makes global trade more sustainable. Undoubtedly, such Asian countries as China, Japan, and South Korea will take the precedent of the Suez Canal's blockage into consideration in their long-term strategic plans."

Interestingly, the Russian ambition of implementing and promoting the Northern Sea Route at the detriment of other foreign trade waterways does not seem to pique the European Union's interest. Indeed, European Union Special Envoy for the Arctic Michael Mann in March 2021 declared that the European Union is neither for nor against the Northern Sea Route; nor does the Union have any interest in this commercial passage, as the decision whether or not to fly it is a matter for private companies and the decision is purely commercial. Crucial is, however, that the process is carried out in compliance with international law and that safety standards, especially in the environmental field, are respected. (Interfax Interview, March 19, 2021).

Despite the European Union's apparent indifference, some of its country members, on the contrary, express a certain degree of concern, especially those countries that rely on Mediterranean trade, such as Italy. Luigi Merlo, former President of the Genoa Port Authority, now head of Federlogistica, in response to Moscow's promotion of the Northern sea transport corridor, challenges the choice's dangerousness. Indeed, there is the risk that the Northern Sea Route would tend to isolate the Mediterranean, jeopardizing its commercial developments. This development could also fuel China's aspirations for monopolistic regulation of traffic and, as a result, global maritime trade.

As suggested by the Rosatom company, the Northern Sea Route will reach an appropriate level of competitiveness with other waterways most probably by 2035. Therefore, only time will tell whether the current concern is well-founded and whether private companies will find it more profitable to follow this new route or whether, instead, they will continue to use the Suez Canal international corridor, making Russia's attempts to achieve another ambition futile.

 

Author: Greta Bordin





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