Northern Sea Route may draw traffic from Suez Canal

The almost week-long blockade of the Suez Canal last month by a giant container ship once again raised the issue of alternative routes for world shipping, says The Middle East Monitor. An estimated 12% of world maritime trade passes through the canal making the route important but not indispensable. Ships plying between Asia and Europe can also sail around South Africa’s Cape of Good Hope, but it is more costly in terms of fuel and time. Railway routes as means of intercontinental transport are also too expensive compared with the price of sending goods by sea, while cheaper pipeline transportation is limited to liquids and gases.

Israel and the UAE are pushing a proposal to build a new waterway connecting Israel’s Red Sea port of Eilat and the Mediterranean Sea. Experts estimate that digging a 250-kilometre canal through the hilly terrain will cost at least $100 billion. Meanwhile, the Suez Canal is 100 kilometres shorter. Egypt, which opposes the idea, can be expected to come up with a more competitive solution, such as building a new waterway alongside the existing canal, or even widening it, at a third of the cost of the Israel-UAE project.

Russia can also offer an alternative to the Suez Canal, and global warming seems to have contributed to this issue. The Northern Sea Route in Arctic waters is now accessible without using expensive icebreaker ships. Earlier this year, a Russian ship transporting LNG from Yamal gas field to China made its return journey through the route in the middle of winter and without icebreaker assistance. China became one of the first countries to try the Northern Sea Route for commercial purposes. Since 2013, it has been sending an increasing number of ships to Europe via the Arctic Sea. Besides, the waterway is important for Japan and South Korea, and both countries are increasingly using the route. A container ship heading from Tokyo to Hamburg will spend around 48 days to sail via the Suez Canal but only 35 days via the Arctic. The world’s largest container shipping company, Denmark’s Maersk, also started using this route three years ago.

In 2018, President Vladimir Putin set a goal to increase the average annual cargo volume transported via the Northern Sea Route from 30 million tonnes to 80 million tonnes by 2024. According to experts, the route may reach its full capacity by about 2030. Although the Suez Canal will remain important for maritime transport, especially between the Mediterranean basin and South and South-East Asia, the number of ships using the Arctic waterway is expected to rise.