the 9th International Arctic Shipping Seminar in Busan, Korea, Dec.10, 2020
Possibility and determinants of container shipping of the NSR
Natsuhiko Otsuka Hokkaido University Arctic Research Center, Sapporo, Japan Topics
Japan’s actual performance of the NSR shipping
Stream of engagement to the NSR by Japan’s shipping sector
Case example of trial container shipping via the NSR
Determinants of trans NSR commercial shipping
Effect of COVID-19 to commercial shipping of the NSR Japan’s actual performance of the NSR shipping
Year Ship details Origin port Destination port Cargo 2012 Ob River, 84,682DWT Hammerfest Tobata LNG Propontis, 117,055DWT Mongstad(Norway) Mizushima(Japan) Naphtha 2013 SCF Yenisei, 47,000DWT Murmansk Iwakuni, etc.(Japan) N/A Arctic Aurora, 73,920DWT Hammerfest Futtsu(Japan) LNG 2015 Hafnarfjordur(Iceland) Osaka(Japan) Winter Bay 2016 Hafnarfjordur(Iceland) Osaka(Japan) Whale meet 2,050DWT Hafnarfjordur(Iceland) Osaka(Japan) 2017 Tian Le, 37,994DWT Norway Tomakomai, Kushiro, (Japan) Forage Clean Planet, 89,848DWT Niigata(Japan) Sabetta Ballast Tian Hui, 37,130DWT Hamburg Kushiro, Tomakomai, Hakata Forage 2018 Haaga, 23,650DWT Sakaide(Japan) Oxelosund(Sweden) Coke Viiki, 25,532DWT Sakaide(Japan) Hammerfest(Norway) Coke Azure Coast, 2,050DWT Hafnarfjordur(Iceland) Osaka Whale meet 2019 Atlantic borg 11,885DWT Finland Kinuura(Japan) N/A Tian En, 37,125DWT Helsinki Tomakomai(Japan) Container, 40TEU 2019 Vladimir Rusanov, 96,844DWT Sabetta Ohgishima(Japan) LNG Eduard Toll, 96,840DWT Sabetta Ohgishima(Japan) LNG 2020 Tian You Nederland Kushiro, etc Forage Origin; and Destination; ports in Japan(2012~2020)
Tomakomai ; Forage, Container
Kushiro; Forage
Niigata; Ballast
Tobata; LNG Ohgishima; LNG
Futtsu; LNG Kinuura; Bulk Hakata; Forage Osaka; Whale meat Iwakuni; Mizushima; Sakaide; Coke Liquid bulk Liquid bulk Stream of engagement to the NSR by Japan’s shipping sector
Major shipping companies in Japan have little number of ice class cargo vessels. The Japanese shipping companies are lacking interest on container shipping of the NSR at this moment. Meanwhile, their target would be destination shipping of bulk cargoes. The port authority locating in Hokkaido region, which has geological advantage to use the NSR, are showing interest on utilizing the NSR. Government ministries have been holding a periodical session to share information on trend of NSR, and holding a similar session with business enterprises, municipalities and researchers. Bulk cargoes are gradually shipped between Europe and Japan as a destination shipping, and awareness of NSR is gaining among cargo owners. A new five-year national project of Arctic research (Arctic Challenge for Sustainability II ;ArCS II), has been launched in June 2020. Its strategic goals include developing safety and sustainability of ice navigation, analyzing interrelation between international maritime transport network and the NSR, and economic and social impact of the NSR. Case example of trial container shipping via the NSR
Tian-En clear a port on Sep.13th , entered the Northern Sea Route on Sept. 24th and passed through the Bering Strait on Oct. 1st. It took her to cross the Northern Sea Route 8 days, and 27 days for whole voyage from Helsinki to the port of Tomakomai. She sailed the ice-free NSR without icebreaker assistance by 7.25days at an average speed of 12.2kn. Quick delivery service was highly welcomed by cargo owner. (Otsuka et.al, 2020) Determinants of trans NSR container shipping
Basically, container carrier is mostly occupied for liner service network, even in the case of ice class vessel, so we can hardly find ice class container carrier for temporal NSR shipping. As a result, trump liner shipping of container must find multipurpose bulk carrier, which has similar schedule and destination for her original cargo at this moment. Here, good availability of ice class cargo ship and long enough navigational p eriod might be desired from cargo owners. On the other hand, fairly number of cargo volume, and stable periodical demand might be desired from shippers. In the case of container shipping via the NSR by trump liner shipping, shippin g cost is not competitive against the regular service via the Suez Canal. In ord er to get profit from the NSR container shipping, sufficient volume of cargo, w hich enables to cover additional cost for calling at a port for containers, is ind ispensable. Determinants of trans NSR commercial shipping
Year-round shipping :Sea ice retreat enables to expand summer navigable period. But it would be hard to fin d high ice class cargo vessel that can sail the NSR in winter, and it is not easy to achieve competitive shipping cost in n ear future. This would be a matter of long-term view. Fuel price & Currency: Higher the fuel price becomes, the NSR shipping cost feasibility becomes more competi tive. And currency of Russian Ruble is an important element for icebreaker assistant fee, because it is prescribed in RU B.
Icebreaker: Availability of nuclear icebreaker is often questioned but it is not serious issues under recent sea ice r etreat in mid-summer to fall. However, if shipping activity expands to ice existing season, and number of ships start to enter the NSR, this would be a serious issue and uncertainty of navigation would increase.
Ice and weather forecast are achieving both Russian information service, non-Russian commercial service. Satellite monitoring of sea ice is also achieving, but still there remain many issues to be developed.
Advantage : So far from Japan’s actual achievement on trans NSR shipping, quick delivery and free from piracy w as highlighted rather than cost effectiveness after downslide of freight market since 2014.
Ambitious motivation of shipping sector can be a driver to develop further utilization of the NSR. For examp le, Russia is planning to develop trans NSR container shipping business between Murmansk and the Far-Eastern port (Neklyudov, 2020). The port of Tomakomai in Hokkaido region Japan has been achieving its activity to utilize the NSR for both bulk and container transport between Europe. Effect of COVID-19 to commercial shipping of the NSR
Covid-19 has amplified pre-existing troubles Sea Freight Fowarding Market Growth 2020 in global container freight forwarding market. Global North America Europe Asia Pacific (Transport Intelligence Limited, 0 % ”COVID-19 Impact Analysis, 2020) -5 %
By monitoring the number ship of which arrivals -10 % Best Severe and departures in Japan, China, North America -15 % and Europe, number of ships arrived at Japan decreased from the end of January until March 2020, then recovered to the same level of previous year. Among them, container carrier and bulk carrier showed the same tendency above, but car carrier has decreased after April. As of June, impact to Japan’s maritime transport seems to be definitive. On the other hand, number of ships from China to Japan, Korea, India, Europe and the U.S.A. mostly decreased except for bulk carrier to EU. (Shibasaki , 2020) Against the background of this pandemic, NSR shipping will also be affected to hit a plateau. And if structural shift might happen in the international specialization of manufacturing and maritime transport triggered by this pandemic, it would be necessary to reconstruct the plan for utilization of the NSR. Thank you very much for your kind attention!
References Arctic Challenge for Sustainability II ;ArCS II. https://www.nipr.ac.jp/arcs2/e/about/ Otsuka, N, Sasaki, H. Kakizaki, T., Nakamura, E and Moriki, A. (2020). “Summary of the Northern Sea Route trial shipping of containers”, The 35th International Symposium on the Okhotsk Sea & Polar Oceans. pp.43-45. Shibasaki, R. (2020). “Analysis on COVID-19 pandemic impact on maritime transport by satellite AIS (Preliminary report)”. http://webpark1967.sakura.ne.jp/shiba/?page_id=1179, in Japanese. Transport Intelligence Limited (2020). “White Paper, COVID-19 Impact Analysis: Global Contract Logistics Market Size”