Arctic Routes See Downturn in Transit Traffic
Both the Northwest and Northeast passages have seen an increase in commercial shipping traffic over the past half-decade, thanks to diminishing ice levels, but recent low bunker prices have made the arctic short-cuts less attractive. The Northern Sea Route (NSR), across the top of Russia, has seen a substantial drop in transit traffic, from 1.3 million tons in 2013 to only 300,000 tons in 2014 and fewer than 100,000 tons by the end of last October, although domestic trade between Russian ports in the arctic has been steadily increasing.
The Northwest passage across the top of Canada and Alaska has seen even less use, although a number of small expedition-type cruise ships have been making seasonal full or partial transits and two Finnish icebreakers employed in Shell's now cancelled Chukchi Sea drilling project, Nordica and Fennica, returned home via the waterway.
However, Russia's Deputy Minister of Transport, Viktor Olersky, noted in the recent arctic Circle conference in Europe that cargo being moved to and from Russian ports along the NSR has been increasing year-by-year, with more than 4.5 million tons moved in 2015. Most of this increase has come from the substantial oil and gas development projects in the region, including the Yamal LNG project on the Kara Sea and the Prirazlomnaya platform in the Pechora Sea.
Olersky agreed that the NSR will not become a major alternative to the Suez Canal but said it will play a crucial role for Russia's arctic development projects, with cargo traffic predicted to increase to nearly 83 million tons by 2030, only about 5 million tons of which will be in international transit.
Last year, including domestic moves, the volume of freight moved along the Northern Sea Route increased by 1.2 million tons to 5.1 million tons overall.