By
Sarfaraz Alam
Blogs
•
11
min read
Since 2020, disruptions in the Suez Canal we all have been witnessing have underscored the susceptibility of global trade, leading to a reassessment of traditional routes. In that particular year, these disturbances in the Suez Canal resulted in a daily trade halt valued at $9 billion, underscoring the imperative for more robust alternatives.
In response to uncertainties, the Northern Sea Route (NSR) through the Arctic is poised to be a transformative force, not only revolutionizing global trade but also heralding a new era in maritime commerce. This pathway is anticipated to be 10-12 days faster than the conventional routes via Singapore and the Suez Canal to the UK/Europe.
The connections between North America and Europe with Japan are projected to take just over 22 days on average by 2030 or once the route gets fully operational
Forecasts propose that the NSR, slicing through the Arctic, has the potential to establish a sustainable transport infrastructure, reshaping Eurasian transit dynamics. For those apprehensive about the current environmental impact of vessel movements in existing routes, this inventive initiative pledges to mitigate such concerns through shorter routes and low-carbon energy solutions. Experts anticipate a reduction in the distance between Yokohama and Rotterdam from 20,900 km to 13,700 km. Further into the future, from 2045 to 2060, we are likely to witness the diminishing Arctic Sea ice due to moderate warming, potentially allowing ordinary cargo ships to directly navigate over the North Pole.
Recent collaborative initiatives between the NSR's infrastructure operator and a leading global logistics player envisage a substantial transformation in cargo transport. Their joint development and testing of an integrated Arctic-based cargo transport infrastructure foresee the exploration of an alternative route. This forward-thinking move aims to bolster the sustainability of the Eurasian exchange of goods, potentially diversifying trade flows between Asia and Europe.
Anticipated Regional Impact:
The predicted benefits for landlocked CIS countries such as Uzbekistan, Tajikistan, Turkmenistan, Kazakhstan, and Kyrgyzstan, as well as Pakistan, India, Afghanistan, and the Middle East are substantial. Once operational, the Arctic route could provide these nations with a direct, time-efficient corridor to access global markets without depending on existing disrupted routes. Reliant on complex and lengthy trade routes currently, the NSR is expected to significantly reduce transportation times and costs, boosting its economic competitiveness globally. For China, a major player in global trade, the NSR offers an alternative to maritime routes through the South China Sea and the congested Malacca Strait, providing a more secure and diversified option, and reducing dependence on a single route.
Middle Eastern countries, especially Saudi Arabia, UAE & and Oman are also poised to benefit from the Arctic route.
Predictions also indicate potential collaboration between the Middle East and Arctic nations, leveraging the NSR. This collaboration could lead to new economic partnerships, infrastructure investments, and the exchange of technological expertise, fostering a mutually beneficial relationship.
In my opinion, the anticipated advantages of the NSR go beyond environmental considerations. The expected benefits for landlocked countries and those in the Middle East signify a transformative shift in regional dynamics, promoting economic growth, and unprecedented collaboration.
Although Arctic routes are subject to specific regulations and environmental considerations, HashMove is well poised to integrate its robust features that will harmonize among various stakeholders in the supply chain, such as shippers, carriers, and customs authorities, for enhanced communication and coordination. As a result, this would lead to smoother operations and reduced transit times.
Furthermore, given the sensitivity of the Arctic environment, HashMove's upcoming features to facilitate sustainable and "Green" initiatives would contribute to sustainability efforts by promoting eco-friendly practices in shipping operations.
As the world anticipates the dawn of the Arctic trade revolution, nations stand at the threshold of a new era in global commerce and regional prosperity, and at HashMove, we are already ready to contribute our part.
