In 1869, the Suez Canal revolutionized trade between Europe
and Asia. Previously, ocean vessels had to travel the length of Africa and back
up the continent. Today, another alternative appears to be in the making – the
Northeast Passage – thanks to climate changes.
Cosco has recently launched a freighter from Dalian through
the Bering Strait en route to Amsterdam. Transit time is anticipated to be
about 12-15 days less than if the freighter traveled by way of the Suez Canal.
The drawback of this route is that it is only navigable 2-4
months of the year because of the ice. However, there is quite a bit of
interest in this route as 46 ships utilized it in 2012 compared with four in
2010. Russian authorities have reportedly granted 372 permits to ships this
year. In fact, it is estimated that up to 15% of Chinese foreign trade could
use the arctic route by 2020. Additional benefits of this route include the
opening of Russian oil fields to foreign trade as well as fishing in
international waters that were not previously accessible.
With over 19,000 ships passing through the Suez Canal each
year, industry experts say it will be some time before the Northeast Passage
rivals the Suez Canal in terms of traffic. However the recent events in the
Middle East as well as concerns of piracy off the coast of Africa, has
increased concerns of supply chain security along this route. On the other
hand, travel through Russian waters could also present risks due to possible
instabilities in the Russian economy and its political environment.
Regardless, the possibility of an additional trade route
between Asia and Europe is welcomed news in the shipping community and one that
will offer an alternative choice for shippers for this important tradelane.
