Can we expect a Polar pivot for China’s shipping?
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Source: The Financial Express (AI-generated) |
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What is the China-Europe Arctic Express? |
This is a container shipping lane. It links China to Europe. The ships’ journey begins in Ningbo-Zhoushan Port in China. The ships travel north from China. They pass through the Bering Strait. Then they follow Russia’s Arctic coastline to enter the European waters. |
The China-Europe Arctic Express relies on a strategic route: the Northern Sea Route. |
The Northern Sea Route (NSR) |
The NSR is a shipping route about 5.6 thousand kilometers long. It passes through the Bering Strait and Arctic seas before reaching northern Europe. Most of the route runs through the Arctic waters. But also, along Russia’s northern coast./ |
This route is strategic. It is much shorter than the usual passage between Asia and Europe through the Suez Canal. It can reduce shipping distances by up to 8 thousand kilometers. It also avoids many geopolitical hot spots and chokepoints. But this route has been avoided for a long time by global commercial shipping because of its harsh conditions. Indeed, sea ice limits its use for most of the year. |
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But this is changing with global warming. In 40 years, Arctic sea ice lost about 40% of its surface. In the coming years, the Arctic could be nearly ice-free during some summers. Indeed, the Arctic is warming about four times faster than the global average. As the NSR becomes more navigable, it creates opportunities for many states. |
China’s first regular service through the NSR |
China is grabbing these opportunities. It began with a pilot project in September last year. One of its ships left the Ningbo-Zhoushan port and reached the UK through the NSR in 20 days. |
But the important change happened this month. The Chinese shipping company Sea Legend turned the experiment into a regular service. Between August and October, one ship per week is scheduled to make the journey. The first one, the Dubai Tower, departed from Ningbo in China a few days ago. |
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Key advantages for China |
Faster transit. The shipping journey through Suez usually takes 30 to 40 days. Plus, when the security situation in the Red Sea forces ships to reroute through the Cape of Good Hope, the journey can take up to 50 days. Rail freight between China and Europe takes around 25 days. By comparison, shipping through the NSR reduces travel time to around 20 days. |
Bypass chokepoints. China-Europe maritime trade depends a lot on a series of chokepoints. Ships usually pass through the straits of Malacca and Bab El-Mandeb. They sail in the Red Sea to reach the Suez Canal. This route creates vulnerabilities. The current crisis in the Middle East shows that. |
Competitive advantage over Western carriers. Russia’s Rosatom oversees navigation along the NSR. It issues navigations permits in Russia’s waters. It also operates Russia’s unique icebreaker fleet. Because this route requires companies to work with Russia and sail in its waters, most Western companies are reluctant to use the NSR. |
Demand for ice-class ships. Demand has surged. China’s shipyards can benefit from this increased demand. |
Challenges |
While there are many advantages for China, the NSR also brings challenges: |
Navigability. The NSR is not becoming an ordinary shipping lane. It remains highly seasonal. The navigable season is still short. It runs approximately from July to October. Harsh conditions. Sailing in the NSR requires experienced sailors. Weather conditions can be extreme and dangerous. Sailors can face issues with GPS. Indeed, GPS can be less reliable due to high latitudes. Ice conditions can also change quickly. Ships may require ice-class construction or icebreaker assistance. Reliability. Global container shipping depends on predictable schedules. But weather and ice can make arrival dates difficult to guarantee. Insurance costs. Sailing through the NSR to bypass chokepoints does not automatically reduce insurance costs. All the challenges above lead to extra costs. A Shanghai-based freight forwarder says NSR rates are higher than standard China-Europe freight charges. Rates for the Suez Canal are about 4.5 thousand USD per forty-foot equivalent unit (FEU). NSR rates nearly double. They range from 8 to 8.5 thousand USD per FEU.
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The China-Europe Arctic Express fits China’s strategy to improve the resilience of its trade network. But it cannot replace Suez. Indeed, the NSR cannot currently provide the kind of year-round service available through Suez. Plus, China does not seek to rely on a single route anyway. It seeks to diversify and the NSR provides that. |
The game changer is the attempt to develop the NSR into a regular shipping lane. The Arctic is becoming highly strategic for many states. But China and Russia are deepening their presence in the area. They have been working on a “Polar Silk Road” since 2017. This makes the Arctic Express not just a shipping project. It is also a key component of the growing China-Russia strategic partnership. |
Decoding geopolitics isn’t a job. It’s survival. |
Joy |
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