The cargo ship Nordic Orion recently unloaded 74,000 tons of coal at the grubby Port of Pori on Finland’s western coast. The delivery, as mundane as it was, marked the culmination of an otherwise historic voyage through the Northwest Passage—the first time a commercial bulk carrier has navigated the ice-choked route. It also represented the second Arctic shipping achievement in less than three months. Back in August, the Yong Sheng, owned by China’s Cosco, became the first container ship to sail to Europe from Asia via the Russian-controlled Northern Sea Route. According to Russian figures, more than 100 transits of the Northern Sea Route—mostly bulk carriers—have taken place since the first commercial voyage occurred in 2009.
All of that polar traffic—made possible by receding Arctic ice—has sparked intense discussion about the potential of Arctic shipping. “It’s reflective of climate change impacting the Arctic more quickly than people had feared,” says Michael Byers, a professor of political science at the University of British Columbia. “More importantly, it’s also happening at a time when the government of Canada is grossly unprepared.” Russia, he points out, boasts 16 deepwater Arctic ports and a fleet of nuclear-powered icebreakers for hire. Canada, by contrast, operates no ports above the Arctic Circle (the closest one is in Churchill, Man.), while many of its 18 icebreakers are aging. The 1960s-era Louis S. St-Laurent, one of only two heavy icebreakers in the Canadian fleet, was scheduled to be replaced in 2017, but is now set to undergo $55 million worth of upgrades to keep it running until 2020 or 2021.
Meanwhile, on the other side of the Atlantic, the Russian Maritime Register of Shipping recently held a conference in St. Petersburg where attendees discussed everything from ship design for Arctic waters to how fast polar ice can be expected to recede. Koji Sekimizu, the secretary general of the International Maritime Organization, told the industry publication IAA PortNews that he was impressed by the lack of sea ice on a recent trip through the Northern Sea Route, and that it “clearly indicates that in summertime it is possible to allow a large number of vessels [to go] through.”
But is an Arctic invasion truly imminent? So far, most of the interest in Arctic shipping is coming from governments eager to extend their influence in a resource-rich region—not shippers themselves. And that’s because the Arctic, despite its increasingly ice-free status, still represents a difficult and expensive place to do business.
Ottawa’s eagerness to be seen as capitalizing on the Arctic’s new-found status as a global trade route was clear during the Nordic Orion’s transit last month. The ship’s Danish owner, Nordic Bulk Carriers, worked closely with Transport Canada and the Canadian Coast Guard to plan the voyage, with the Louis S. St-Laurent providing escort services for 39 hours. The Canadian government is also planning to use its turn as chair of the eight-state Arctic Council to encourage new safety standards for commercial ships sailing through the region, particularly oil tankers. “Canada will continue the council’s work on oil-spill prevention in the Arctic,” Environment Minister Leona Aglukkaq, who is also Canada’s minister to the council, said last week during a speech at Yukon College in Whitehorse. “An oil spill from one of the many ships that will soon be crossing Arctic waterways as the shipping season becomes longer could have serious consequences for the environment and the livelihoods of Northern people.”
But while the amount of commercial traffic through the Northwest Passage literally has nowhere to go but up, experts say it’s unlikely to be buzzing with activity any time soon. Kathrin Keil, the Europe director for the Arctic Institute, a circumpolar issues think tank, says Arctic routes aren’t economically viable for the vast majority of shippers because of their short seasons, unpredictable conditions and the extra costs associated with operating safely in such an unforgiving environment. Even the relatively busy Northern Sea Route is only navigable for part of the year. And that doesn’t mean it’s completely free of ice—just that there’s less of it. Another question is whether shippers are willing to invest in the necessary equipment. The Nordic Orion is one of few with an Ice Class 1-A rating, meaning it’s more powerful and has a stronger hull.
Keil also questions some of the numbers being thrown around by governments. While Russia has granted 495 permits to navigate its Northern Sea Route this year, she notes that fewer than 18 per cent of them were for actual transits. Many were simply for trips through the southwestern Kara Sea—either within the region, or southward to Europe. “This is not what a global trade route looks like,” she says.
That’s not to say the potential advantages to Arctic shipping aren’t real. The Nordic Orion’s trip through the Northwest Passage shaved about 1,000 nautical miles, or 1,850 km, off its normal trip to Finland via the Panama Canal. It was also able to carry more coal than usual because it didn’t need to pass through the canal’s shallower waters. In all, the ship’s owner estimates the trip saved about $200,000, although it’s unclear whether that includes all the costs associated with being the first to ply an experimental route. “I would like to know what they paid for insurance,” Keil says.
Perhaps the most telling sign that talk of Arctic shipping is premature is that the industry itself isn’t sold on it. “We will see some ships sailing through the Arctic, but the reality is, for commercial shipping, this is not something that will happen within the next 10 to 20 years,” Nils Andersen, head of Danish shipping giant AP Moller-Maersk, recently told the Financial Times. “The problem is just that you have to have icebreakers, you have to be very sure that you hit the right window during the year so you don’t run into icebergs and things like that.” Even the managing director of Nordic Bulk Carriers, Christian Bonfils, is downplaying the importance of the Northwest Passage barely a month after the Nordic Orion’s historic voyage. “Even if trips that way become routine, they will represent only a tiny fraction of the traffic on the world’s major trade routes,” he told the trade magazine Canadian Sailings. “And you need to carefully study and consider every trip, from the cargo to the weather conditions.”
There is, nevertheless, still an economic case to be made for continuing to develop infrastructure along both the Northwest Passage and Northern Sea Route even if they remain relatively unused. “The majority of shipping [on the Northern Sea Route] is going in and out of Russian ports,” Byers says. “It’s iron ore, LNG (liquefied natural gas) and forestry products. The melting of sea ice, particularly for Russia, has enabled phenomenal efficiencies in terms of moving natural resources to market. And one could anticipate that happening in Canada’s North, too.” A side benefit of such investments, and one that no doubt explains Ottawa’s current interest, is that it will go a long way toward helping Canada to assert its sovereignty in the Far North. “This was a major milestone,” Byers says of the Nordic Orion. “But another potential milestone is a ship going through without bothering to seek Canada’s permission.”