The Future of Shipping & Trade in Arctic Waters

By Willy Østreng 

Until recently, international trade and shipping was closed off to the Arctic because of its harsh climatic conditions. However, in 1922, Arctic explorer Villjamur Stefansson projected this reality to change. “We have not come to the northward limits of communal progress. There is no northern boundary beyond which productive enterprise cannot go until North meets North on the opposite shores of the Arctic Ocean as East has met West on the Pacific,” he stated. This dazzling prediction stood up to the common conception of the time that the Arctic was a place for daredevils and explorers and not for civilized Economic Man.

Yet global warming and accelerating sea ice melting have revived Stefansson’s vision. Previously restricted resources and waters are now becoming accessible, leaving industries and governments to look upon the geopolitics of the region with a fresh pair of eyes.

Meanwhile further south, some 80 percent of the world’s industrial production takes place north of the 30th parallel north, which makes the Arctic Ocean a shortcut between the world’s most advanced and productive regions. Thus, the Arctic Ocean offers shorter transport distances, less fuel consumption, less carbon emissions, faster deliveries of goods, and more profits than what traditional trading routes can provide between ports in the North Pacific and North Atlantic.

Three shipping passages are available to service trade in the Arctic Ocean: the Northeast Passage (NEP) running north of Eurasian continent and connecting the Atlantic to the Pacific Ocean, the Northwest Passage (NWP) passing through the Canadian archipelago between the Bering and Davies Straits, and the Transpolar Passage (TPP) going through the high seas of the Central Arctic Ocean.

These Passages (see figure 1) can be used as destination-Arctic routes between harbors inside and outside of the Arctic, as transit routes between ports in the North Pacific and the North Atlantic, and as intra-Arctic routes, connecting harbors within the region. Surface ships already go through all these passages, yet the greater challenge is whether they can be used in an economically viable manner and in an environmentally sustainable way.

Figure 1: The transportation Passages of the Arctic Ocean

The Northeast Passage runs through a series of ice-infested marginal seas linked by some 58 straits going through three archipelagoes above a shallow sea bed (less than 20 meters in some places). The shallowness of the shelf and straits affects the size, volume and drafts of ships. The eastern sector of the passage also contains unbreakable multi-year ice from the Central Arctic Ocean – ice that remain frozen through warmer seasons – which adds to the challenge of navigation.

However, ice conditions have been changing recently. The Chukchi Sea is ice-free during periods that have lasted up to three months each year since 1979. While the sailing season for the entire NEP has been extended from three months to close to six months (see figure 2), the Kara Sea Route has been used for shipping on an annual basis ever since 1978 transporting nickel and oil from Dudinka to Murmansk, Russia.

To extend the navigation season, Soviet authorities invested heavily in procuring the biggest and most powerful icebreaker fleet in the world, allowing the Russian government to open 41 Arctic ports to service foreign vessels along the passage. Thus, transit sailing increased from two sailing in 2009, to 34 in 2011 and to 41 in 2014.

The Northwest Passage runs through one of the largest archipelagoes of the world, comprising 36,000 small areas of dry land above sea level—islets and rocks included—that are connected through shallow and narrow ice-plagued channels. Sea ice conditions within the archipelago vary dramatically from year to year, presenting unpredictable conditions for any surface operations.

Destination shipping, with small ships and barges, comprises the principle form of shipping activity in these waters, whereas commercial transit shipping rates are more moderate. From 1903 to 2004, only an average of 1,7 transits a year have been undertaken through the NWP, and it is likely that these numbers will remain low in the future, mainly because ports to service transits are close to non-existent.

The Transpolar Passage runs through a part of the Arctic Ocean where the frequency of multi-year ice is the highest. Contrary to popular belief, the ice cover of the Arctic Ocean is not a static, unbroken surface. It is constantly in motion, breaking into pieces and building up pressure ridges above and below the surface when floating sheets of ice grind together.

In the 1960s, open areas constituted five to eight percent of the total area of the Arctic Ocean during winter, and approximately 15 percent during summer. Of course, they make up a far higher percentage today thanks to climate change. Over the last thirty years, sea ice thickness in the Central Arctic Ocean has decreased by 42 percent, or 1,3 meters. Moreover, model experiments predict an ice-free Arctic Ocean in summer around 2040.

As a consequence, the frequency of maneuverable first year ice will increase. So far, one hundred nuclear and diesel-powered icebreakers have reached the North Pole, but no commercial ships have been able to make the trek thus far. Russian sources suggest that the rapid development of ice-classed vessels and icebreaking technology can make shipping in these waters feasible in winter from April to May and November to December. If so, the shipping season can be extended up to 9 or 10 months.

Figure 2: Potential Sea Routes

Considering navigation conditions, the Norwegian Shipowners’ Association ranked the NEP as their preferred passage in the short term, the TPP in the medium term, and the NWP in the long term.

Furthermore, both Arctic states and non-Arctic states like China, South Korea, Singapore, and India, favor greater economic resource extraction, trading, and shipping in the Arctic. According to experts, destination shipping connected to resource extraction is the type of trade likely to expand the most in the years to come, both for the NEP and NWP.

A new partnership including the Duke Corporate Education organization of Duke University, the Norwegian Veritas GL, and the Norwegian Shipowners’ Association, has organized an Arctic Leadership Programme for Executives (ALPEX) to prepare executives for the challenges of the changing Arctic. The program will take place in 2015 and 2016 in Tromsø, Norway and Helsinki, Finland. The overall purpose of ALPEX is to prepare decision makers with “a good understanding of the Arctic System in total and how the different sub-systems, technical, environmental, political, social and legal interact.”

Given the tremendous changes impacting the region, the Arctic is entering a new age of human interaction and one with a principally industrial future, both in terms of economic and political priorities.

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Willy Østreng is the president of the Norwegian Scientific Academy for Polar Research.