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Sunday 5 July 2009

Global warming = faster, cheaper shipping? Maybe...

(You are receiving this note because you subscribed to Brad Skelton's blog-The Shipping Bloke)
According to certain climate models the whole Arctic Ocean is said to become progressively ice free by the middle of this century. Some models indicate this will happen even sooner than that. So what will this mean for shipping routes, transit times and freight rates and the Panama and Suez Canals as major passages now?
The Danish Institute of International Studies has recently completed some research on this question and here are some of the findings.
Of 130 shipping companies surveyed most say that these northern sea routes(red line) are too risky for their vessels and insurance premiums are currently very high. Even if the icecaps shrink further the fact is drift ice and icebergs will still be a threat to shipping for many years yet and some types of cargo are not able to go through areas of extreme cold.
Although the distances between some ports is shorter, the ships speeds would have to be reduced. So it is debatable whether this will translate into operational efficiency gains.
Torm Lines calculated in early 2008 that travelling between Europe and Asia by northern sea routes would mean savings to them of about 12 days sailing time and operating costs per voyage of about US$155,000.00. And....they have started investing in more iceclass vessels.
Many shipyards order books for ice strengthened vessels are growing so perhaps some other operators believe this will become commercially feasible for them soon too. Four North American and two European shipping lines are already using Arctic routes so it is clearly possible.
So... is global warming a reality and will this route open up completely to heavy transit shipping or is the icecap shrinkage only temporary? It seems the shipping industry is just as conflicted on this issue as the scientific community. Time will tell.
All for now,
Brad Skelton
The Shipping Bloke


  1. Very interesting topic Brad, as always there is a "positive" side for everything...

  2. Thanks for the note! yes. Always a silver lining. You just have to look for it sometimes.