• 2013 November 20

    Northern decline

    Despite media euphoria concerning the Northern Sea Route, NSR transit traffic declines in 2013. However, this Arctic route still has the future.

    Is transit slipping away?

    The volume of transit shipping by the Northern Sea Route is expected to fall by about 2.5%, year-on-year, to 1.17 mln t in 2013. This was announced by Aleksandr Olshevsky, head of NSR Administration, at the 2nd International Conference “Northern Sea Route” in Saint-Petersburg. 

    According to him, this should be attributed, in particular to the competition with the North West Passage (Canada) which has commenced transit navigation. In September 2013, 255-meter long bulk carrier NORDIC ORION, an ice-class 1A ship, with 73,500 tonnes of coal for the Finnish company Ruukki Metals Oy made the first ever transit voyage along the North West Passage from Vancouver in Canada to the port of Pori in Finland. The route was planned in close coordination with the Canadian Coast Guard. Read more >>>> 

    According to Kirsten Selvig, Director General of the Norwegian Ministry of Fisheries and Costal Affairs, the possibilities to use the North West Passage are interesting for the Chinese business today.

    Moreover, shipments from port Vitino (Murmansk region) have decreased, which should be probably attributed to the launch of Novatek’s terminal for transshipment of gas condensate at port Ust-Luga (earlier it was transshipped via Vitino).

    Besides, more severe ice situation also affected the shipping volumes in 2013, which suggests controversy about ice melting in the Arctic.

    However, the Head of NSR Administration says that despite lower volumes the transit “quality” is going up with the shift to “big transit” from Europe to Asia and back. 

    In fact, new players enter the Arctic route. In 2013, the 64,000-dwt tanker Stena Polaris sailed from the Russian port of Ust-Luga to the port of Yosu (S. Korea). For part of the voyage of 8,400 nautical miles, the tanker sailed in a convoy headed by a Russian nuclear powered icebreaker through the harsh North-East Passage.

    According to the voyage organizers, sailing to South Korea via the North-East Passage compared with sailing via the Suez Canal, India and the Strait of Malacca cuts 10-13 days off the voyage. A medium-sized tanker such as the Stena Polaris saves around 400 tonnes of fuel. This represents savings of SEK 2 million ($301,400).

    Before this, Cosco’s multi-purpose freight vessel, Yong Sheng passed through the Northern Sea Route on her first commercial voyage from port Dalian (China) to Rotterdam (Netherlands). 

    SCF’s product carrier Victor Bakaev (118,000-dwt, ice class 1С), also in navigation of 2013, made her maiden east-west voyage by the Northern Sea Route. The Victor Bakaev left the port of Yeosu (S. Korea) on October 2, 2013 with 88,000 tonnes of aviation kerosine towards the Cape Dezhnev. Charterer – largest international oil trader VITOL. 

    There's no limit to perfection

    It should be noted that NSR navigation of 2013 failed to avoid incidents. On September 5, 2013, Ice 1 class tanker Nordvik (owned by Khatanga Commercial Seaport) sailing from the Ob Bay towards Khatanga with 4,944 tonnes of Arctic diesel fuel violated the permission of the NSR Administration and entered the area with medium ice conditions where it got a hole in one of the ballast tanks (1,000х100mm). 

    In September, French catamaran Babouchka got aground on the Northern Sea Route and an icebreaker was sent to help the vessel. 

    The above incidents revealed weaknesses in the shipping mechanisms of the Northern Sea Route.

    In particular, Aleksandr Olshevsky says it is not correct to take decisions in respect of navigation along specific routes basing on general ice forecasts covering half of the sea.

    He also notes that there is no mechanism of responsibility for violation of the rules. “Probably, it would be reasonable not to issue permits for vessels violating the rules”, he says. 

    Besides, termination of the agreement between Rosatom and Rosmorrechflot has resulted in dissolution of Marine Operations Headquarters, a body which executed important functions of NSR shipping management. No new procedures for cooperation with the nuclear icebreaker fleet operator appeared to substitute the cancelled procedures. In this context, the procedures should be elaborated for cooperation of Northern Sea Route Administration with icebreaker fleet operator, thinks the Head of NSR Administration. 

    According to him, in 2013, the Administration has received 701 applications. 21% of vessels allowed to use NSR are flying foreign flags (127). 81 applications have been dismissed including 6 applications by foreign vessels (7%). 

    Besides, in 2013 the administration issued 26 certificates for ice piloting in the water area of the Northern Sea Route (as of September 29, 2013). Currently, NSR ice piloting is being performed by FSUE Atomflot and Ice pilots LLC founded by Murmansk Shipmaster's Association.

    Vytaly Chernov