The one thing that is guaranteed is that the Northern Sea Route will one day become a main stream route even though it looks like nothing now. Greed or should I say profits will make shipping companies change their minds because there are plenty of shipping companies prepared to take this opportunity. Not only that the carbon emissions are 50% less with a 50% less travel time so when CBAM covers these products there could be a carbon tax saving versus other competitors in the Far East.
Russia was dealt a significant blow this week when China refused to supply the much needed propulsion and steering systems for the Arctic fleet citing the threat of sanctions. Russia’s Central Marine Research and Design Institute known as CNIIMF reported that Russia required by 2030 10 x 120 000 ton oil tankers, 5 LNG tankers of 174 000 cubic meters, 3 universal bulk carriers capable of carrying 40 000 tons and 5 extra tankers for LPG and gas condensate.
I think this is more of a political move by the Chinese and more of a negotiation tool to have more control or a shared control of the NSR. This is nothing new and China has played hard ball with Russia especially with the NSR. Russia and China are working on arms together so supplying components is the lesser of the two evils. Russia having less operational ARC 7 vessels opens the door for China to supply these vessels required and in another way have some type of control.
The NSR is now open and there are some opportunities are being which have not gone unnoticed by shipping companies. Sea Legend Shipping a Chinese based company started late last season and only managed one voyage before ice made the route too hazardous. This season they are planning 8 voyages between Ningbo and Felixstowe in the UK, Rotterdam (Netherlands),Wilhelmshaven (Germany) plus Gdynia (Poland). They have 7 container vessels scheduled between August and early November. This service will have one vessel sailing per week until it is too risky as these are not specialized ice rated vessels. Sea Legend uses conventional ice and standard shipping vessels so the risk is very real. This is the high risk gamble or opportunist thinking here.
The first two vessels are already fully booked with Chinese manufacturers keen to get their products on the shelves for Christmas. This journey only takes 18 days compared to 32-45 days using other routes. The extra 2 weeks saved is what manufacturers can take advantage of as they have more time to send more product. Normally companies would miss the cut off deadlines by mid September so this NSR service has literally given them an extra month.
The vessels being used are not giant container vessels and vary between 1740 TEU and 4800 TEU in size. Sea Legend stated that some of the cargo will be Lithium batteries which will travel very safely in the cold conditions.
What is interesting to note is Sea Legend started operations in the Red Sea when Houthis were attacking vessels so whoever owns this company is definitely taking advantage of every opportunity. This company is sailing where other companies are not and you have to think whoever they are they are politically connected.
Posted Using INLEO
