EASTERN ARCTIC AND ITS SEA PORTS IN CONDITIONS OF INTENSIVE DEVELOPMENT OF THE NORTHERN SEA ROUTE

Elena A. Zaostrovskikh 

Economic Research Institute, Far Eastern Branch of the Russian Academy of Sciences, Khabarovsk

Abstract: Increased interest in the Arctic routes due to climate change, increasing disproportions in trade flows, rising tariffs on main routes, and increased competition between ports inevitably leads to a change in the configuration of the shipping network, the formation and rethinking of the role and place of Arctic ports in the development of the global supply chain. In this regard, the possibilities of growth of the ports of the Eastern Arctic in the new economic conditions are considered. The dynamics of the operation of the Northern Sea Route and its Arctic ports in the period 2000-2020 has been studied. The main trends and the deterrent factors for the development of port infrastructure have been identified. The role of ports in the formation and development of the Arctic support zones has been studied. The conditions, which can contribute to the solution of the problem of forming a growth pole based on the ports of the Eastern Arctic, are determined. The volumes of loading of the ports of the Eastern Arctic for the future are estimated. It is concluded that the ports and transport infrastructure in the Eastern Arctic is an important condition for the functioning of the Northern Sea Route, but cannot be considered a sufficient condition for the development of the region.

Key words: Eastern Arctic, Northern Sea Route, support zones, socio-economic development, seaports.

Introduction

There are two Arctic routes connecting the Atlantic and Pacific Oceans in polar waters: the Northwest Passage, passing through the Canadian Arctic, and the Northern Sea Route (NSR), running along the northern coasts of Russia. Various actors – from the Arctic states and observer countries to shipping companies – express interest in these routes. 

Currently, a significant amount of climate research is being conducted regarding the accessibility of the Arctic routes. The attention of scientists to the region is connected with the intensive melting of Arctic ice. Over the past 35 years, its volume has decreased by 30% and will decrease by another 50% in the next 30 years [1; 2]. This will lead to a change in the configuration of the shipping network and the formation of alternative transport routes. According to scientists’ estimates, provided that the melting of the arctic ice continues, by 2050:

• The Northwest Passage will open opportunities for ecotourism and fishing, but navigation will be limited since the arctic ice will remain near the coasts of Canada and Greenland;

• The Northern Sea Route will allow for the development of two routes: national and transit. 

Thus, the NSR will have significant advantages over the Northwest Passage and, at the same time, may compete with the Southern Sea Route (via the Suez Canal).

An important advantage of the NSR compared to the Southern Sea Route is the possibility of saving time and financial costs. Preliminary calculations by scientists have shown that a voyage of one ship from Kirkenes to Yokohama via the Arctic costs half a million dollars cheaper compared to going through the Suez Canal due to savings in ship wiring [3]. 

At the same time, there are various opinions among scientists about whether the NSR can be a perspective and commercially attractive route. Some scientists argue that a 40% reduction in distance using the NSR does not imply a corresponding decrease in operating costs, since there is a major constraint – icebreaker services [4]. Others note that reducing the distance does not lead to a significant reduction in fuel costs, since in conditions of low temperatures and the need for constant maneuvering in ice, fuel consumption increases, thereby negating the advantages of the NSR in terms of distance [5]. Thirdly, some scientists note that the use of the NSR in the current conditions is economically feasible only for the transportation of liquid and bulk cargo, but not containers [6]. Undoubtedly, such arguments are not in favor of the NSR.

However, if we analyze some of the events of the last ten years, we can see that the countries with access to the Southern Sea Route are preparing for fierce competition with the development of the NSR: 

• In 2012, Somali pirates, who had been robbing ships in the Gulf of Aden for many years, were eliminated;

• In 2015, the second channel of the Suez Canal was put into operation, which significantly increased the speed of ships passing (from 20 to 13 hours).

Moreover, some factors that have occurred in the maritime industry have influenced the change in the role and importance of the NSR:

• Disproportions in trade flows and tariffs on main routes have increased;

• Competition between ports has intensified, requiring the rethinking of key ports on trade routes to develop of a global supply chain network. Some countries, such as Malaysia and Singapore, are seriously considering using the NSR to partially redistribute their containerized cargo [7].

• Costs and revenues between shipping companies and ports have been redistributed due to the increase in the size of ships and the formation of mega-alliances.

The reverse side of climate change may be the risks associated with the sea level rise, increased storms due to the expansion of the open water area, and coastal erosion in the Arctic [8; 9]. It is assumed that as a result of such changes, the port infrastructure will become especially vulnerable [10; 11].

All of the above facts point to the urgent need to develop alternative transportation routes and rethink the role and place of the Arctic ports in the development of the global supply chain.

In Russia, with the development of the NSR, more attention is paid to the Arctic territories and maritime transport. According to the main program documents of the country, infrastructure conditions will be created for the development of potential points of economic growth, including the comprehensive development of new territories and mineral deposits in the Arctic zone of the Russian Federation (AZRF). In this regard, it is planned to create eight support zones in conjunction with the Arctic ports on preferential terms. For the development of transit traffic, two Arctic hubs will be created at the entrance and exit of the NSR. 

Thus, the modern economic realities of the economic development of Russian Arctic make us take a fresh look at how the NSR and its Arctic ports are developing in the new economic conditions of the region.

Questions related to the development of the Northern Sea Route have been widely studied, especially since 2013, when the process of developing a program for the Russian Arctic zone was launched. There are many domestic studies and research on this topic [12; 13; 14; 15; 16; 17; etc.]. However, there are very few studies on the analysis of the current state and prospects for the development of the ports of the Eastern Arctic, in the new conditions of development [18; 19]. 

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