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Threat of sanctions is holding back the northern sea route

Russia and China have said they will co-operate to develop the route on a recent visit to Beijing by President Vladimir Putin

Chinese reluctance to invest in the port facilities on the route is preventing it from becoming a genuine alternative to the Suez Canal, experts argue

FEAR of sanctions is holding back Chinese investment into the northern sea route, without which the long-awaited Arctic sea route may never be a viable option for commercial shipping.

Rosatom, the Russian government department which manages the arctic passage, has big plans to invest in a so-called ‘ice silk road’ along Russia’s northern coastline and create a shorter route between East Asia and Europe than through the Suez Canal or via the Cape of Good Hope.

“The development of the northern sea route, the shortest sea route between the western part of Eurasia and the Asia-Pacific region, will be an important addition to existing routes, helping to strengthen the global supply chain and contribute to the development of the ‘blue economy’,” a Rosatom spokesperson told Lloyd’s List.

Russia has been courting investment in the route from China for some time. In May this year, during a visit of Vladimir Putin to Beijing a joint statement from both countries said they would work together to develop the route and create a committee to oversee it. In 2021, logistics giant DP World said it would continue to work with partners in Russia to develop the northern sea route.

But this investment has not translated into widespread usage of the arctic route, despite significant disruption to both the Suez and Panama Canals in recent months.



Between May 1, 2020 and May 1, 2021, there were 249 transits of commercial vessels of more than 5,000 dwt through the Bering Strait, the key gateway at the Eastern end of the route. Between May 1, 2023 and May 1, 2024, there were 203 transits of the same criteria through the strait, despite the Red Sea crisis developing during the latter half of that period.

So why isn’t the NSR being used more?

Jeroen Pruijn, associate professor at Technical University Delft in the Netherlands and author of studies on the arctic route, said that the route’s lack of port infrastructure would  prevent it from being a true alternative for shipping for the time being.

He said that the small, isolated ports in northern Russia did not have the bunkering or search-and-rescue facilities to support a mainstream commercial shipping route.

Reliability is also a concern too. Pruijn explained that the Arctic’s unpredictability makes it unsuitable for shipping that relies on strict scheduling, for example, container lines.

An executive from a Chinese shipmanagement company told Lloyd’s List that at the request of shipowners, they would continue to use the Arctic route for some ships this year. Last year, a Panamanian bulk carrier managed by the company used the route to travel from China to Murmansk to shorten the journey and save time.

But he said many ships, especially containerships, choose the southern route instead, not because of physical constraints, but because they serve fixed networks and need to call at ports along those routes.

Most ships using this alternative lane serve the market only between China and Russia nowadays, he added.



Between October 2023 and May 2024, there were 14 voyages between Russian and Chinese ports using the northern route. In the same period 2021-2022, there were four.

Following this pattern, NewNew Shipping announced a container service from ports in China to Archangel via the route, connected by rail to Moscow. NewNew said the service would be shorter than the Suez route by 20 days and expects 20,000 teu of cargo to be shipped in 2024.

But to further expand the use of the Arctic route, more destinations beyond Russia, first and foremost in Europe, need to be connected. Without the support of these countries (possibly due to sanctions), relying solely on Sino-Russian trade makes this goal difficult to achieve.

Without broader trade to support the Arctic route, limited cargo volumes will restrict the size and number of ships in service, thereby limiting the need for large-scale investment in ports and infrastructure, as well as the funds required for such investment.

Fear of Western sanctions is one of the barriers to the significant investment that will need to come from China to make the northern sea route a viable alternative shipping lane.

“Chinese companies’ concern over sanctions is not unique in the case of arctic route. It is the same case with Iran and North Korea,” said Yun Sun, senior fellow and director of the China programme at think tank the Stimson Centre.

“Unless there is a strong mandate from the Chinese government or from a commercial perspective that offsets the risk, the Chinese companies will not be inclined to move forward.”

Lucas Myers, senior associate for southeast Asia, Indo-Pacific programme at think tank the Wilson Centre, told Lloyd’s List that there had been reluctance from China to deal too closely with Russia since the war in Ukraine amid the threat of US secondary sanctions.

He said Chinese banks, in particular, did not want to risk losing access to Western markets.

Like fabled sea routes before it, the northern sea route has held almost mythical status for some time now as the shortcut always a few years away. Without significant investment, it looks set to stay that way.


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