The Myth of Arctic Shipping: Why the Northern Sea Route Is Still of Limited Geo-Economic Importance
In light of news about a Chinese ship crossing the Arctic, the authors of this article attempt to temper expectations about the future of Arctic shipping. Examining the permits granted to use the Northern Sea Route (NSR), the authors show that these permits are not all related to shipping and many did not even cover the entire NSR. The article notes that unpredictability is a huge disadvantage for the NSR and many economists are not taking this into consideration. Based on the authors’ analysis, Arctic shipping makes little sense for Chinese-European trade. The paper also called into question the incentives for Russia to develop the NSR, noting that it is costly to operate at the moment and the current fee structure for using the NSR is not favorable for Russia. The authors conclude that the NSR will likely remain a specialized Russian trade route, but will not develop into the international trade route that many predict.
Read the full text at the Arctic Institute.
Andreas Raspotnik is a senior fellow and leadership group member of the Arctic Institute.
Kathrin Stephen is a senior fellow and the main editor for the Arctic Institute, as well as a project scientist at the Institute for Advanced Sustainability Studies.
Photo by Tuomas Romu shared under a C.C. BY 4.0 license.