Arctic shipping routes will take at least 10 to 20 years to provide commercial opportunities, according to the chief executive of the world’s biggest container line

October 6, 2013 1:18 pm

Arctic shipping routes still a long-term proposition, says Maersk

By Richard Milne in Copenhagen

Arctic shipping routes will take at least 10 to 20 years to provide commercial opportunities, according to the chief executive of the world’s biggest container line. Nils Andersen, head of Denmark’s AP Møller-Maersk, poured cold water over suggestions that the Northern Sea Route over the top of Russia could provide a viable alternative to the Suez Canal for Asia-Europe trade.

“This is not a short-term opportunity. We will see some single ships sailing through the Arctic . . . But the reality is, for commercial shipping such as container shipping, this is not something that will happen within the next 10 to 20 years,” Mr Andersen told the Financial Times.

His words carry weight as Maersk is a barometer of world trade, carrying 15 per cent of seaborne freight, with the Danish group transporting hundreds of thousands of containers through the Suez Canal each year.

The first ships in recent times to sail the Northern Sea Route, also known as the northeast passage, did so three years ago. The route can cut the journey time between some Asian and European ports by about a third. It gained further prominence this summer when the first Chinese commercial vessel used the route.

But Mr Andersen noted that the route is only open for a few months a year with most ships needing assistance from icebreakers, making the route expensive.

“The problem is just that you have to have icebreakers, you have to be very sure that you hit the right window during the year so you don’t run into icebergs, and things like that,” he said.

The first bulk carrier – the Nordic Orion, laden with coal – sailed through the northwest passage over the top of Canada in September. But maritime experts point to problems such as a border dispute between Canada and the US.

Still, other shipping executives point to problems, from getting insurance to the difficulties of rescuing ships in the Arctic where they are a long way from existing coastguard facilities. The International Maritime Organisation is working on a polar code and hopes to implement it by 2015.

Russia is forecasting that most of the traffic to use the Northern Sea Route by 2021 will be ships taking oil and gas from its northern coast to Europe or Asia. Only 15m tonnes of cargo will use the route compared with the 25m tonnes of oil and gas and 930m tonnes of cargo transported in 2011 via the Suez Canal.

“The way global warming is going, of course there is the opportunity in a very far, very distant future that the northern sea route will open up and it will be a major shipping route. But it will definitely not be within the next 15 to 20 years in our opinion so it’s far too early to start constructing vessels for it,” Mr Andersen said.

Maersk is in the middle of taking delivery of 20 Triple-E ships, the world’s largest, capable of carrying 18,000 20-foot containers from Asia to Europe.