Feasibility Study on Commercial Shipping in the Northern Sea Route

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Examensarbete för masterexamen
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2019
Författare
Pham, Thi Bich Van
Miltiadis, Aravopoulos
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The constant mitigation of ice extent in Arctic region enables the Northern Sea Route (NSR) becoming an attractive shipping lane with numerous trading opportunities between Europe and Asia. The benefits of the shortening NSR can be related to its substantial savings in voyage time and fuel consumption compared to the conventional Suez Canal Route (SCR). However, the shorter distance itself cannot guarantee the cost-efficiency due to harsh condition, in which remoteness and ice conditions raise the questions about safety challenges and extra operational cost. In particular, the ship-ice resistance likely increases the fuel consumption and reliance on ice-breakers may constrains the transit time. Dissimilar from normal open water routes, an average assumption of constant speed should not be applied in the NSR. Therefore, this research aims at computing fuel consumption in Arctic waters by using real-time data of ship’s position, the corresponding speed, ice concentration and ice thickness. The cost analyses from two case study vessels in three different ice scenarios provide a cost comparison between the NSR and the SCR. Furthermore, interviews and surveys with various actors in the shipping industry were conducted to further assess the feasibility of the full transit in the NSR, the potential cargo in this niche market, as well as their major concerns towards possible challenges. The main conclusion of the thesis is that, thanks to the cutting voyage time up to 34% for the full transit Shanghai - Gothenburg, the NSR can save up to 40% of the cost in ice-free condition in comparison with the SCR. When the ice occurs, the percentage of cost reduction declines to around 20% and 5%, depending on the severity of ice. However, as the cost performance is sensitive to market factor such as RUB-USD exchange rate, the NSR is no longer cost-beneficial because of the expensive ice-breaker fee in ice scenarios. Besides the cost factors, the majority of surveyed shipping companies expressed their hesitance due to technical obstacle for ice-class vessels and the safety challenges for search and rescue activities.
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Northern Sea Route (NSR), Arctic shipping, cost analysis, feasibility study, ice resistance, fuel consumption
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