Shipping, Ahoy!🚢(Arctic Pt. 2)
Suez Canal, Look Out!
This is Pt. 2 of “It’s Getting Hotter in the Arctic” series. For the first part of the series, click here. Ice guaranteed! 🧊
Congrats! You just got your own command, as the Captain of the “Jeez It’s Cold” Polar-Class 1 Ship, the world’s largest and most fearsome Icebreaker, armed with all of the latest equipment and weaponry. You are sooo excited to traverse the icy waters of the Arctic, defending your country’s global interests and taking part in the great battle for the soul of the Arctic. Hurray! 🔱⚓
In your inbox awaits your mission details. It is… (take a deep breath) babysitting?! You are asked to clear the path for some commercial ships along the Northern Sea Route, so they can bring some goodies to people who paid top dollar💵 for expedited shipping. They can’t wait, so you have to hurry up, put on your captain’s hat and set sail!
The happenings in the Arctic that we discussed in the previous post are a part of a greater trend of shifting sands taking place all over the world, shifting sands that I’ve dubbed as the Reconfiguration.
While naming something is helpful, it’s not enough. It is not enough that we point our finger at the Arctic and say “huh!”. It’s like, in the words of one of my friends, saying there’s a thing called “Gravity”. To understand the Reconfiguration in the Arctic, we need to look deeper and explore the contours and the ripple effects of what’s happening in there.
The changing landscape in the Arctic is causing multiple ripple effects. Today, we will focus on one of the more important ones: Shipping 🚢🚢🚢
In a way, shipping routes are perhaps one of the key reasons the prospects of Climate Change in the Arctic are so tempting for world powers. Climate Change ravages many parts of our world, but it is only when climate change alters dynamics of power, money and control that different stakeholders (countries, corporations, activists, etc.) wake up from their slumber.
To be clear, I think that the changes in the Arctic are devastating and should be avoided at all cost. In no way I think the Reconfiguration is welcome or desirable. On the contrary. The loss of Ice in the Arctic is a climate catastrophe waiting to happen, but it doesn’t free us from understanding what will happen next.
So without further ado, let’s look at shipping, shipping lanes, and the quest for the heart of every day shoppers. Yeah, [insert your name here], I’m looking at you.
Shipping, Ahoy!
Thawing Ice, Clearing Routes
The thawing of the ice🧊 in the Arctic puts us on track for iceless Arctic summers as soon as the next decade (although no one is exactly sure when). While it doesn’t mean that the ice will be completely gone, it does mean that over summer months there will be little to no ice, ultimately enabling shipping vessels to travel through what was, for many a millennia, an impassable route.
Thawing ice🧊 means that in the coming decades, perhaps a first since the beginning of modern shipping, new shipping routes will be opened for portions of the year, altering some of the basic economics of global shipping. Global shipping hubs that were considered the preferred routes linking oceans and continents, such as the Suez Canal and the Panama Canal, are at risk of losing their status, and the revenues they bequeath to their owners.
Thus, the changing climate in the Arctic is sending shockwaves across the world, creating economic opportunities for some and losses for others. Ice🧊 free summers in the Arctic can have a meaningful impact on the price of maritime trade and the price of shipped goods, but can also, as we’ve covered at length in the previous post, create turmoil and even military clashes over territorial disputes and efforts to control the global economy.
Need for (nautical) speed
Oh great. Another babysitting mission. The “Jeez It’s Cold” is ready to set sail, but you’re not feeling it. Why do they need you anyway with all the ice gone? They can do it themselves, you grunt. Maybe it’s time to think of another job? You always wanted to be the Love Boat Captain, maybe it’s time to go for it?
Maritime shipping is a complex topic that resists simplification, and we cannot do justice to the nuances of international maritime trade (although UNCTAD offers great resources). For our purposes, it suffices to say that from a shipping perspective, shorter is (almost always) faster, better and cheaper. The thawing ice🧊 creates shorter routes than those existing today, upending dominance of current shipping hubs. Let’s take a look🔎 at the main ones that are opening🚪
Northern Sea Route
The Northern Sea Route (NSR) is a route that stretches from Murmansk to the Bering Strait, connecting Europe and Asia along 5,600 kilometers of rough, icy🧊 waters. If you’re not sure exactly where the NSR is, think of Russia. Found it? Great.
The NSR sits within Russia’s Exclusive Economic Zone, with the country claiming it holds control over the route, a claim rejected by the US and unclear according to international law (see great analysis by War on the Rocks).
It is estimated that the NSR saves roughly 40-50% of voyage time compared to the existing route through the Suez Canal, with a journey from Rotterdam to Yokohama reduced by 14 days in total. Some researchers predict that operationalizing the NSR will result in diminished trade volume running through the Suez Canal.
Russia’s (potential) ability to exact a financial toll from the NSR along with the projected rerouting of traffic from the Suez Canal helps understand the growing tension in the Arctic we have explored in the previous post, and gives an inkling of what may come next.
Northwest Passage
If the NSR posed a threat to the dominance of the Suez Canal, the Northwest Passage (NWP), connecting the Atlantic and Pacific oceans, is in direct competition to the Panama Canal, one of the world’s most important maritime arteries (with roughly 5% of global shipping traffic)
The NWP is claimed by Canada to be its own (not without reason) as the passage stretches from Baffin Bay in the East to the Canadian Arctic Archipelago in the North and the Bering Strait in the West. As you may expect, this claim is widely rejected by other nations, fearing Canada will take advantage of ownership of the passage (Canada? Seriously? It’s really the least bad option here… but hey…)
The NWP is a case in point of just how tricky Reconfiguration dynamics are. On the one hand, the opening of the NWP (which has been officially open to ships without icebreakers since 2007) poses a threat to the Panama Canal and may lead to decreased revenues in Panama and shifting geopolitics in the region. But, at the same time, due to effects of climate change on the canal (most notably, from growing drought conditions), there are increased disruptions to trade, and the opening Arctic routes may reduce the reliance on the canal, allow for alternative routes and save billions of dollars💵 annually to national economies, from the US to China to Europe.
Transpolar Sea Route
Wait, wait, wait. There’s another one? Two Arctic pathways aren’t enough?
Unlike the previous two routes, the Transpolar Sea Route (TSR) passes through the high seas and is not within the EEZ of any nation. It is also very, very frozen. 🥶🥶🥶
The TSR crosses through the North Pole and spans 3,900 kilometers, making it the shortest Arctic route, saving brave polar captains two days of travel compared to the NSR.
Hold your Icebreakers
“Are they really serious with this Arctic shipping thing?” you think to yourself. There’s literally nothing here for miles on end. Just Ice🧊, and even that’s going away. What if something happens mid-way? Sure, we’ve got everything we need on the “Jeez It’s Cold”, but most of these commercial ships aren’t going to do well on their own. “Hmm…”, a lightbulb💡moment occurs, and you realize that maybe there’s some money to be made with some infrastructure build in the area. Even megacities started as a pack of tents, you think to yourself. Maybe, just maybe, being a developer will suit you better than babysitting stuffed animals packed in shipping containers.
Before we set sail for the Arctic or contemplate which of the new routes we can take on our voyage, we have to take a deep breath. Yes, there is overwhelming evidence that the changes in the Arctic climate will eventually lead to the opening of the three Arctic routes (once again, at a grave cost). However, it’s not as simple as waiting for the ice🧊 to thaw and turning the engine on. Making use of the Arctic routes will be challenging, for a number of reasons:
🏭Infrastructure: Yes, it’s that boring thing you never really think of but panic about when it’s not working (check out John Oliver’s brilliant segment on just how boring but important infra is). To make use of the Arctic routes, we need infrastructure, such as Deep Water Ports, Search and Rescue capabilities, and even access roads to ports. In some parts of the Arctic coastline there’s literally nothing. The NWP is particularly thin on infrastructure required to make it commercially viable, and Canada will need to invest heavily in order to commercialize it.
🚂Reliability: To be useful for international shipping and to be used as a true alternative to the Suez and Panama canals, the Arctic shipping routes need to be reliable and consistently open, and to commercial ships. Currently, that is far from being true. There is still much uncertainty as to the extent and speed of the thawing, and it is not quite clear as to how consistent the thawing will be within each route. For example, out of the three, the NWP is considered the least viable for commercial shipping, while the NSR is considered to be the most reliable for purpose. This is a complex topic to navigate (see what I did there… 🥁), but it is easy to see how reliability is crucial for global shipping.
🌍Geopolitics: A bit hypothetical at the moment, but geopolitical tensions are notoriously bad for commerce, and if one of the powers in the Arctic decide to create turmoil (see War on the Rocks article), that’s not going to be helpful.
Ok great, who cares?
Literally everyone should care.
Arctic shipping is not a very well known issue, but like many other aspects of the reconfiguration, it holds promise and peril for many of us. Let’s take a look at a few of those who should care:
🗺️Governments: As we’ve seen in the previous segment, the changes in the Arctic are well known to governments. The opening of shipping lanes in the Arctic essentially mean changes in nations’ ability to exert their power and influence.
🛳️Shipping Companies: As users of these new lanes, shipping companies have a vested financial interest in utilizing faster routes to destination, to lower costs and increase output. At the same time, many of them do understand the complexities and dangers of the changing Arctic climate. If you own a shipping company, you should probably start preparing for the coming Arctic summers.
🛒Retail Companies & Manufacturers: Put simply, if you rely on ships to move your cargo, the changing climate will most likely impact your operations, perhaps dramatically. You may not realize it, but you have a vested interest in the Arctic. Yes, you have an interest in shipping being faster and cheaper, but at the same time you may also have an interest in global stability and climatic stability.
🧑🤝🧑You and me: For everyday consumers (and people in general), the impacts of the Arctic will be nuanced, but in my view, significant in the long run. Sure, we may see shipping costs reduce, resulting in cheaper goods, but we should also be asking: Are we willing to pay the cost of military tension that could result in larger conflicts? Alternatively, are a few dollars knocked off your cool new sweater (and it is a fine sweater, I admit) worth the potential collapse of our natural systems?
Ok, that last point is a bit unfair. But not by much. The more we treat the Reconfiguration as a force of nature, the less we ascribe agency to ourselves and the less we are motivated to do something about it. Not every aspect of the Reconfiguration should be, or could be, prevented. But some aspects could be averted. The Arctic is a place where the Reconfiguration is treated as almost a force of nature, but it’s up to us how the region will take shape in the future: We can choose to collaborate in the Arctic and try to prevent further extraction of resources; we can choose to protect flora and fauna native to the Arctic, and we can always try to reduce our dependency on fossil fuels to try and mitigate the thawing of the ice🧊.
In a way, though, this is what’s most striking about the Reconfiguration: it’s where we need agency the most, we find ourselves caught in the (ice-free) undertow.
Next time we will explore another angle of the Arctic: Resources!
See you next time👋