IHS Maritime: Arctic ShippingGary Li, Senior Analyst, IHS MaritimeRichard Hurley, Senior Analyst, IHS Maritime
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Arctic Routes
• How safe is it?• What advantages will it
bring?• What sectors are set to
benefit from it?• How soon can I use it?• Can it be an alternative
to Suez?
Trade Factor
2003
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1,000,000,000,000
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Asian Exports
Asian Imports
Sea
born
e Tr
ade
Nom
inal
Val
ue (
Tril
lion
s $)
Asian Seaborne Trade Forecast
© 2013 IHS Source: IHS World Trade Service
• Asian import/export• Forecasted steady growth
• Container shipping to Europe• Third largest in terms of regional
trade
• COSCO ‘Yong Sheng’ – 2013• Dalian – Rotterdam via NSR• Nine days faster than Suez
Ice Capable Container Ships• Relatively few in number• Maersk currently in the ‘lead’• Total TEU numbers quite low
• Currently only 15% of container fleet are ice capable
• Only 1% of new orders are for ice capable ships
LNG Demand• LNG demand
forecasted to grow strongly
• Asia stands to be largest importing region
• Top five Asian economics have huge appetite for LNG
• China and Japan fuelling imports
Ice Capable LNG Tankers• Relatively small percentage
of current fleet- 29 out of 375• Also small percentage of
orderbook- 10 out of 88• Japan and Norway has
largest % of tankers
• Russia leading the way with new orders
• Delivery of Veliky Novogorod in Jan 2014
• Aim to dominate Arctic LNG transport
Icebreakers• Critical for navigating NSR,
even during summer months
• Russia holds near monopoly• US and Canada lagging in
icebreaker capabilities
• Atomflot- six icebreakers available for escort duties
• Others mainly used in Arctic ports
• New icebreaker LK60 class in build- in service by 2017
Alternative to Suez?• Total Suez transits in 2013
were not impacted • More than 16,000 ships
transited the canal in 2013
• Vital to Egyptian economy• Military will not allow it to be
threatened• Current volumes in NSR
nowhere near Suez• Will remain vital for
international shipping for the indefinite future
2nd Army• 2nd Mechanized Division• 16th Mechanized Division• 18th Mechanized Division• 2 x Divisions in reserve
3rd Army• 7th Mechanized Division• 19th Mechanized Division• 2 x Divisions in Reserve
Regulatory Bottlenecks
• Varying classifications for ice capable ships
• NSR uses Russian class• Non-standardisation • Polar Code- 2015
• International Maritime Organisation
Safety Concerns• Few assets, overstretched if traffic increases• Icebreakers have to maintain escort as well as SAR duties• Few aircraft assets in region• 10 new SAR centres due to open in 2015
Arctic Shipping Routes
• With shrinking ice coverage in Arctic, the seaways is opening up
• The “Northern Sea Route” (NSR) and “Northwest Passage” (NWP) are navigable during the summer months
• A further “Central” corridor is envisioned to have opened up by 2040
2013 Ice Coverage• Ice coverage in the Artic is annually at
its greatest extent in February and least in September
• Navigation season for the NSR is late June to September
• In recent years Artic Warming has made most difference to extent of ice in summer
• In 2012 the NSR was considered ice free from August 2012
• In 2013 the summer minima was 29% higher than predicted
• Ice breakers were still required for vessels passing North of the East Siberian island throughout the season
Ice Extent in February 2013
Ice Extent in September 2013
Images courtesy of the National Snow and Ice Data Center, University of Colorado, Boulder.
NSR Transits
The number of ships transiting the NSR increased in 2013 by 54%
• 267: Total traffic in the area June to October • 25: Non-Russian vessels from 11 Flags• 10: Vessels made the through passage• 9: Vessels carried export cargoes
from Russian ports• 6: Total number of icebreakers
employed?
Year No. of Transits
2011 41
2012 46
2013 71Source: NSR Administration/AISLive
Phot
o: ri
amot
or.ru
2013 SAR Incidents
• The holing of the tanker Russian Flag Tanker Nordvik in the Matisen Strait on September 4.
• The loss of the helicopter from the CCGS Amundsen on 9th September
Date: 4 September
Ice Class: Ice Class I
Cargo: 4,944 tons diesel
Damage: 1m hole in ballast tank
Date: 9 September
Ship: Icebreaker Taimyr
Date: 11 September
Ship: Tanker Boris Vilkitsky
Date: 14 September
Ship: Icebreaker Vaigach
Nordvik Incident- September 2013
CCGS Amundsen Incident• 9 September: helicopter of CCGS
Amundsen collide with ice and crashes
• Injured crew perish despite being in survival suits
• Amundsen was ordered to return
• Helicopter eventually recovered• Helicopter was only effective
asset for this section of NW passage
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Nordic Orion: NSR & NWP voyages
Pho
to: E
nviro
nmen
t Can
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•During the summer months of 2013, Nordic Orion transited both Northern Sea Route and North West Passage
•NWP route shaved over 1,000 miles off the Panama Canal Route
•..and was able to carry 25% more cargo
Sou
rce:
MIN
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Icebreakers
•Russia has the largest fleet of ‘escort’ icebreakers•Most icebreakers used for port clearance duties
Sea-going Icebreaker Fleet by Nationality
Ph
oto
: R
osa
tom
flo
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Sour
ce: I
HS
Mar
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Thank You!
Questions?