New maritime opportunities in the arctic

Melting ice has opened new opportunities for the maritime industry in the North Sea Route.  Norwegian companies are collaborating with their expertise in the Centre for High North Logistics and the newly formed Arctic Maritime Cluster.

 

According to a recent report by the National Oceanic and Atmospheric Administration in Washington, USA, scientists expect the Arctic to be nearly free of summer sea ice during the first half of the 21st century, sooner than what many had thought.

 

As the pace of ice melting increases, Norway expects more ships will cross through the Northeast Passage. The increased traffic is already notable. The number of passages through the Northern Sea Route rose by more than ten fold in the past two years. In 2010, only four ships sailed this route. By 2012, there were 46.

 

“Over three decades, the average volume of summer ice has decreased by 80%,” said Sturla Henriksen, Norwegian Shipowners’ Association director general. “Our children will be the first to experience an ocean opening up. Last year, Snow Dragon, a Chinese research vessel, passed without ice-breaking assistance. So this illustrates there is quite a dramatic pace.”

 

Cost Drivers

The main drivers for sailing this route are the freight markets, fuel prices, insurance costs and time saved, according to Felix Tschudi, chairman of Tschudi Shipping. By using the Northern Sea Route, shippers can save an average of between 16 to 20.5 days from Kirkenes to Asia compared to the Suez Canal.

 

This year, Chinese cargo ship Cosco Yong Sheng made the country’s first commercial transit of the Northeast Passage above Russia by sailing from China to Amsterdam. It spent only 35 days compared to 48-day alternative using the Suez Canal.

 

Tschudi Shipping Company has focused on the logistics in the High North because the energy and mineral resource development in the Arctic is accelerating. “Transport solutions are the key to its realization,” said Tschudi at NOR-Shipping’s Ocean Technology Summit in June.

 

He pointed to ice reduction from climate change, technological developments in resource extraction and ice operations, and an active interest from Russia and a general cooperative spirit as the drivers behind this development. But most importantly, it is the high commodity prices, he said.

 

He stressed the need for joining forces as a precondition for developing the Arctic successfully. This included cross border logistical chains, infrastructure and industrial developments, efficient commercial use of resources and capacities, environmental issues, search and rescue, investments, and knowledge and research.

 

“High North Logistics is a chain which requires cross border regional solutions to joint regional challenges,” said Tschudi.

 

High North Logistics

Tschudi started the non-profit foundation Centre for High North Logistics in 2008 in collaboration with the Norwegian Ministry of Foreign Affairs and Det Norske Veritas. CHNL was launched as part of the Norwegian national research initiative The Global Maritime Knowledge Hub, which was initiated by the Norwegian Shipowners’ Association and the Oslo Maritime Network.

 

CHNL cooperates as a knowledge network with several institutions such as the Barents Institute, Barents Secretariat and has established contact with business partners Aker Arctic, DNV, Statoil and ENI, among others. It developed the web-based database ARCTIS (Arctic Resources & Transportation Information System) and established the Arctic Logistics Information Office ARCLIO (www.arctic-lio.com) in Kirkenes, Norway and Murmansk, Russia.

 

CHNL seeks to bring together all the relevant members in the value chain: cargo owners, ship owners, traders, icebreakers, brokers, insurance, law, classification, regulatory authorities and research institutions. An example is the case workshop in Kirkenes from April 2010, which discussed the opening of the Northern Sea Route for regular oil, gas and dry bulk transportation between Europe and Asia. The end result was a demonstration project later that year in which a bulk carrier with non-Russian flag used the Northern Sea Route as a transit trade lane to carry iron ore from Norway to China.

 

CHNL also financed the Shipping in Arctic Waters Project together with Innovation Norway. Conducted by Oslo-based research institute Ocean Futures, the project studied the three Arctic sea routes (Northeast Passage, Northwest Passage, and Trans-Polar Passages) to provide a comprehensive comparison of the challenges. The results of their research was accumulated in a book entitled “Shipping in Arctic Waters,” published by Springer this June.

 

Arctic Maritime Cluster

In the future, the hope is that the Northern Sea Route will open up for even more opportunities for Norwegian companies. A group of them have recently come together under the Arctic Maritime Cluster to develop and implement equipment, design and processes that can make maritime operations in the Arctic most effective, safe and environmentally robust. Their aim is to become the leading maritime knowledge and industrial community in Norway concerning Arctic challenges.

 

Innovation Norway granted the group status this June as a cluster under the ARENA programme, led by Jørgen Bratting at Science Park North in Harstad. The Arctic Maritime Cluster comprises shipping companies, shipyards, service and supply providers, educational institutions and cooperating partners all based in northern Norway.

 

“Knowledge about the High North and the Arctic is found first and foremost in the High North area,” said Stig Nerdal, Transportutvilking president and Arctic Maritime Cluster chairman. “Today the knowledge is partly fragmented and it is also a fact that we have several players in the Arctic Maritime Cluster that are competitors. The fact that the cluster has gotten Arena status basically means that the maritime community in North Norway is now getting recognition, and financial and political support from the key authorities.”

 

Tschudi is among the cluster’s members, which includes Torghatten Nord, Seaworks, Hurtigruten, Chrisship Gruppen, Troms Offshore, Nor Supply Offshore, LKAB, Westcon, Hamek, Grovfjord Mek. Verksted, Skarvik, Ballstad Slip, Nordnorsk Skipskonsult, Polarkonsult, SMV Hydraulic, PTN, Data Process, Rapp Marine, Transportutvikling, Mercur Solutions, Noweco, Harstad Elektro, Teknor, Namek, Port of Narvik, Norut, University in Nordland, Narvik College, University in Tromsø, Marintek, Norwegian Coastal Administration, Norwegian Coast Guard, Bodø Science Park, and Maritime Forum North.

 

 

Photographs

 

1.

Caption: National Oceanic and Atmospheric Administration scientists explore the Arctic during a 2005 mission. The NOAA predicts the Arctic will be nearly free of summer sea ice during the first half o the 21st Century.

Credit: NOAA/Jeremy Potter

 

2.

Caption: For the first time a non-Russian bulk carrier, MV Nordic Barents, used the NSR as a transit route departing from a non-Russian port (Kirkenes, Norway) and arriving at a non-Russian port (Lianyungang, China). 

Credit: Rosatomflot

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