World Maritime University The Maritime Commons: Digital Repository of the World Maritime University World Maritime University Dissertations Dissertations 2009 Transarctic routes : impact and opportunities for ports Adil Rashid World Maritime University Follow this and additional works at: https://commons.wmu.se/all_dissertations Digital Par t of the Economics Commons Commons Network Recommended Citation Logo Rashid, Adil, "Transarctic routes : impact and opportunities for ports" (2009). World Maritime University Dissertations. 153. https://commons.wmu.se/all_dissertations/153 This Dissertation is brought to you courtesy of Maritime Commons. Open Access items may be downloaded for non-commercial, fair use academic purposes. No items may be hosted on another server or web site without express written permission from the World Maritime University. For more information, please contact [email protected]. World Maritime University Malmo, Sweden TRANSARCTIC ROUTES Impact and Opportunities for Ports By ADIL RASHID Pakistan A dissertation submitted to the World Maritime University in partial fulfillment of the requirements for the award of the degree of MASTER OF SCIENCE In MARITIME AFFAIRS (PORT MANAGEMENT) 2009 Copyright Adil Rashid, 2009 DECLARATION I certify that all the material in this dissertation that is not my own work has been identified, and that no material is included for, which a degree has previously been conferred on me. The contents of this dissertation reflect my own personal views, and are not necessarily those of the University. (Adil Rashid) 24 August 2009 Supervised by: Prof. Daniel S. H. Moon, BE (KMU). ME (KMU), PhD (Cardiff University, UK) World Maritime University (WMU) Assessor: Prof Shuo Ma, Vice-President (Academic) and Academic Dean BSc (Shanghai Maritime University), MSc (Paris I), PhD (Paris II), Chevalier du Mérite Maritime (France) World Maritime University (WMU) Co Assessor: Dr. Michael C. Ircha FCSCE, FEIC, P.Eng., MCIP, RPP Honorary Research Professor of Civil Engineering ii Acknowledgments (With the Name of Allah, the Most Beneficent, Most Merciful) I would like to express my gratitude to all mighty Allah who was my support at all times in every walk of my life. I am also very thankful to my wife Rabia and my daughters Haya and Leeza who bear all the hardships with happy faces while living without me for the duration of my stay here in Malmo. I am also highly obliged to Mr Yohei Sasakawa (笹川 陽平) for his generous support by granting me the fellowship and supporting me during the stay here in Malmo. I am also thankful to the professors and staff of World Maritime University for their interest and care they have taken in imparting me the knowledge in such a fabulous environment. Many special thanks to Prof Daniel Moon, who accepted the challenge to be my Supervisor for this dissertation. I would like to thank from the core of my heart Prof Shuo Ma and Prof Pierre Cariou who entrusted me with this opportunity to work on this critical topic. A very special thank to Mr. Clive Cole for his valuable comments and suggestions that enable me to shape up my dissertation in a presentable format. I would also like to express my heartiest appreciation to my friend Ms Meenaksi Bhirugnath for her benevolent moral support throughout my stay in the university whenever it has been required. And lastly I would like to acknowledge my Class fellows who have had to bear the never ending questions I have asked during sessions in the class and then supported me in achieving success in completing my tenure here with honor. Adil Rashid 24 August 2009 iii Abstract Title of Dissertation: Transarctic Routes – Impact and Opportunities Degree: MSc The ongoing climate change will have significant effects all over the world. Because of these changes some areas will be losing the benefits which they are enjoying today and some will gain their economies. Maritime industry being global in nature will share the profits and the losses a region will be facing in future. The international community is endeavoring to delay these changes but we have to be realistic. Climate change is already underway and cannot be stopped. To secure our future, we must prepare ourselves and do our best to adapt to these changing conditions. Many studies have already been conducted to analyze the effects of these changes on different walks of life, but very little is studied to evaluate the effects of these variation on ports of the world. This dissertation examines the opportunities and impacts on ports studying the Arctic Region as that area will have maximum effects due to the global warming. In order to achieve the goal, firstly the economic imbalances due to the climatic affects in different regions are studied as they are the major sources for increase in global trade. History shows that whenever the trade patterns changes, the ports rises or falls with the changes. Today is a new turning point in shipping. With the melting of the Arctic ice cover new shipping routes are being opened. These will substantially shorten the shipping route for Europe and North-America to important trade destinations in the Pacific. This could mean in some instances a shortening of the shipping distance of up to 40 per cent. The study assesses the viability of Transarctic shipping in terms of distance, time and economics since the viability of Transarctic shipping is primarily an economic question as the power of free markets with increased demand for global transport and iv logistics corporations are the decision makers when it comes to identifying new routing opportunities. The second attraction to maritime trade in the region is the opening of a new market of oil, gas and other minerals. Scientists have discovered world largest oil and gas reserves under the white ice of the Arctic Region. With the melting of ice, the access to these resources is also getting easier. This will increase the demand for ship transport for the oil and gas operations To assess the benefits of distance in adopting the Transarctic route, an empirical study using the Center of Gravity modeling is used by the author where the Canadian market is modeled for the containerized traffic. The study reveals that according to the data taken by the different sources in 2006, the Canadian ports in north or north east are in better position to be a hub port for the container market in Canada. But at present due to non availability of shorter route between North East Asia and northern Canada, shippers are calling port of Vancouver at the west coast of Canada due availability of a shorter route across the Pacific ocean. The study concludes that with the changes in climatic conditions where many ports will be losing business, Arctic ports will have the opportunities to gain economies. But this all is not possible without improving the infrastructure availability which can minimize the total cost in the whole logistics and supply chain. Keywords: Transarctic Route, Port Location, Gravity Modeling, NSR, NWP v Contents Table of Figures .................................................................................... viii List of Tables ........................................................................................... ix List of Abbreviations ............................................................................... x Chapter 1. Introduction ......................................................................... 1 1.1 Objectives and Scope of the Study ......................................... 1 1.2 Research Methodology ............................................................ 2 Chapter 2. Background ......................................................................... 4 2.1 Rise and Fall of Ports .............................................................. 4 Chapter 3. The Arctic Region ............................................................... 8 3.1 Introduction ............................................................................. 9 3.2 Physiology of Arctic Region .................................................... 9 3.3 Transarctic Routes ................................................................ 10 3.3.1 The Northwest Passage ....................................................... 11 3.3.2 North East Passage ............................................................. 12 3.4 Major Stakeholders ............................................................... 12 3.5 Major Ports and Harbors ..................................................... 14 3.6 Climate Change ..................................................................... 15 3.7 Effects of Climate in the Arctic Region ............................... 17 Chapter 4. Literature Review ............................................................. 19 4.1 Impact and Opportunities arising from Global Warming 19 4.1.1 Effects of Temperature Rise ................................................ 24 4.1.2 Effects of Sea-Level Rise ..................................................... 25 4.2 Viability of Transarctic Transportation .............................. 29 4.2.1 Navigational Viability ......................................................... 29 4.2.2 Other Features of the Arctic Marine Physical Environment:33 4.3 Infrastructure Availability ................................................... 35 4.3.1 Global Infrastructure .......................................................... 35 4.3.2 Infrastructure in the Arctic Region ..................................... 37 vi 4.4 Economic viability ................................................................