Intrepid sailors, like Henry Hudson before them, are trying to make commercial Arctic shipping a thing.
Driving the news: Drought in the Panama Canal and Houthi rebel attacks on cargo ships trying to pass through the Suez Canal have sent cargo deliveries plummeting and shipping costs skyrocketing. All of this turmoil has led to renewed interest in Arctic shipping routes.
- Three open routes crisscrossing through the Arctic are seen as viable: the Northern Sea Route, the North-West Passage, and the Transpolar Sea Route.
Why it matters: Arctic passages could act as alternative routes in times of supply chain calamity (read: right now), or even become primary routes thanks to their shortcuts. Polar journeys could be up to 40% shorter in distance compared to trips through the Suez Canal.
- For example, a voyage from Shanghai to Rotterdam via the Northern Sea Route takes 18 days, compared to the 32 days it currently takes to go through the Suez. Shorter voyages equal lower shipping costs, which could equal cheaper goods.
Why it’s happening: Shippers have been interested in finding a viable commercial trade route through the Arctic since literally the 15th century. However, Arctic shipping has only now become a real possibility as melting ice has made these frigid waters easier to navigate.
- The Arctic is heating up four times faster than the rest of the world, with ice melting so fast that the Arctic Ocean could soon have its first ice-free summer. This clears up paths for ships and could extend the Arctic shipping season.
Big picture: Shippers are turning these global-warming lemons into trade lemonade. The volume of cargo passing through the Russia-administered Northern Sea Route surged from 2.8 million tonnes in 2013 to 36.2 million in 2023 — an unfathomable ~1,293% jump.
Yes, but: There are many doubts about the routes’ long-term feasibility, stemming from economic, environmental, logistical, and geopolitical concerns. That last one is top of mind as Russia’s Northern Sea Route is currently the most popular Arctic cargo shipping route.