In March 2019 I was living and working on Sakhalin. Inspired, I wrote a short piece about the North Sea Route of Russia. The focus was geopolitical rather than business as Russia had just introduced new rules of passage for all foreign ships, including warships and merchant vessels navigating through Russia’s Northern Sea Route (NSR).
These new rules call for all ships and vessels from other countries (and Russian vessels as well) to notify a Russian monitoring service 45 days before they plan to navigate through the NSR. They must report the name of the ship, the route and the timing of navigation, name and military rank (if a warship) of the captain as well as the main parameters of the craft, such as displacement, draft, and engine characteristics.
In addition, the regulations will oblige all foreign ships and vessels to take on board Russian pilots when navigating the NSR.
The US and NATO countries balked and were a bit upset, but these rules held. The reasons, among several, were it was Russian sovereign territory, and to be ready to handle any potential emergency or complication due to extreme and often fast-developing ice situations. Russian icebreakers are also available to assist in such cases and must be planned for.
At the time of writing (2019), the trade turnover through the NSR was nearing 30 million tons. In 2020 it rose to a stable 32 million tons and is now diversifying into a broader shipped products profile for 2021 which may approach the 35 – 40 million tons mark, with possibly 80 million tons earmarked by 2025.
The NSR is the shortest maritime passage connecting Europe and the European part of Russia with the country’s Far East regions and Asia. Until now the NSR has been used for transporting oil and gas shipments, including liquefied natural gas (LNG), petrochemicals, concentrated ores, coal, and metals. However, this has changed this year with the first general container traffic navigating the NSR.
The priority today is to establish, finance, and build new Arctic-dedicated shipping lines to provide sea transport services within these Arctic waters. Funds have already been earmarked by the Russian Far East Development Fund to address the seed financing of these ventures. Additionally, vessels such as the icebreaker “Leader”, are now being built at the Zvezda shipyard and other Russian yards. They will provide year-round shipping routes in the Arctic and will be a revolution in global transport logistics. Such icebreakers can and are followed by a convoy of ships. They can move at speeds of up to 12 knots through ice up to 2 meters in thickness.
This will reduce, if not eliminate current speed lags during ice transit which can be as costly as demurrage. The Northern Sea Route is shorter and faster in open water, but it has been expensive and difficult to navigate through the ice portions. These icebreakers are finally able to allow for fully competitive navigation pricing and conditions. Last but not least, as these regions have been extremely difficult to access in the past, the future of leisure cruises on top of scientific and exploratory are very much in the cards as well.
Analyst Paul Goncharoff, Moscow
Ru-Main, 08.06.2021
