News / Europe

    Icebergs, Insurance Hamper Top of the World Shipping Route

    The town of Ny-Aalesund in Norway's high Arctic as seen from the top of the nearby Zeppelin mountain, May 28, 2013. The town of Ny-Aalesund in Norway's high Arctic as seen from the top of the nearby Zeppelin mountain, May 28, 2013.
    x
    The town of Ny-Aalesund in Norway's high Arctic as seen from the top of the nearby Zeppelin mountain, May 28, 2013.
    The town of Ny-Aalesund in Norway's high Arctic as seen from the top of the nearby Zeppelin mountain, May 28, 2013.
    Reuters
    The new shipping route opened up through the Arctic by climate change will not be crowded any time soon.

    Cargoes of coal, diesel and gas have made the trip but high insurance costs, slow going and strict environmental rules mean there will not be a rush to follow them.

    Looser ice means icebergs. One vessel has already been holed, and large ice breaking vessels, not always on hand, are a must.

    “Significant safety and navigational concerns remain an obstacle to commercial shipping in the Northern Sea route, despite recent media reports of 'successful' transits,” said Richard Hurley, a senior analyst at shipping intelligence publisher IHS Maritime.

    “AIS [ship]- tracking of vessels in the area shows all vessels are subject to deviation from direct routes as a result of ice, and many areas still cannot be navigated safely without the presence of large icebreakers able to provide assistance such as lead through to clearer waters.”

    Last month, a dry bulk vessel carrying coal from Canada passed through the Northwest Passage to deliver a cargo to Finland, in a trip its operators said would save $80,000 worth of fuel and cut shipping time by a week.

    The world's top oil trader Vitol brought tankers in October with Asian diesel to Europe via the Northern Sea route over Russia, potentially saving hundreds of thousands of dollars in costs.

    The fast-growing liquefied natural gas market, in which Arctic players like Russia and Norway play a big role, has also seen maiden Arctic voyages.

    Hurley said the passage of the Yong Sheng cargo vessel in August from China to Europe via the Northern Sea was only possible with the aid of the world's largest nuclear powered icebreaker, 50 Let Pobedy, to get it through the Lapatev Sea. Ship tracking showed only four large icebreakers were available at any one time to cover the whole Northern sea route.

    Separately, a small Russian oil products tanker was holed in September in the Kara Sea, also off Russia.

    “Even though damage was minimal and did not cause a pollution incident, the holing revealed fragility of emergency help,” Hurley said. “Taken together, all the inherent dangers and concerns over potential Arctic pollution count heavily against time and cost savings alone when assessing the commercial viability of the seaway.”

    Insurance and containers

    The market is also still nascent for insurers.

    “The key obstacle here will remain the insurance, as it's still simply too risky a proposition for standard commercial insurers,” said Michael Frodl of U.S.-based consultancy C-Level Maritime Risks, who advises insurers.

    “The ships aren't ready, the support facilities and port infrastructure are not yet in place, and the risks haven't been figured out enough to price insurance correctly.”

    Others say the commercial potential is unlikely to be viable for container ships, which transport consumer goods, partly as trade flows develop beyond China in coming decades towards other regions including Africa and South America.

    “The further away global trade moves from a totally China-centric export pattern, the more a short 'polar' route looses its appeal,” said Jan Tiedemann, shipping analyst with consultancy Alphaliner.

    “The Southern route - even if longer - will always have the advantage of serving numerous markets at the same time. Think of the Middle East. Think of transshipment via the [Malacca] Straits to Australia and New Zealand. Think of transshipment in Arabia for East Africa. Think of Med and Black Sea loops.”

    Until recent years harsh weather conditions, which can drop to 40 to 50 degrees centigrade below zero, had limited Arctic shipping mostly to small freighters and ice-breakers that supplied northern communities in Canada, Norway or Russia.

    According to French ship classification society Bureau Veritas, there were 40 Arctic route trading voyages in 2012 for all vessel classes including oil tankers, with around one million tons of cargo moved. That compared with 700 million tons transported through the Suez canal.

    Knut Espen Solberg of Norwegian shipping and offshore classification group Det Norske Veritas, said dry bulk vessels carrying coal were best suited for Arctic shipping as the potential for environmental potential was less.

    “Oil and container spills have a much bigger potential environmental impact than coal, so their shipping is likely to be restricted heavily,” said Solberg, a former Arctic mariner.

    You May Like

    California Republicans Mull Choices in Presidential Race

    Ted Cruz tells state's Republican Convention delegates campaign will be 'battle on the ground, district by district by district,' ahead of June 7 primary

    Video Kurdish Football Team Helps War-Torn City Cope

    With conflict still raging across much of Turkey’s predominantly Kurdish southeast, many Kurds are trying to escape turmoil by focusing on success of football team Amedspor

    South African Company Designs Unique Solar Cooker

    Two-man team of solar power technologists introduces Sol4, hot plate that heats up so fast it’s like cooking with gas or electricity

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Turkish Kurd Islamist Rally Stokes Tensionsi
    X
    April 29, 2016 12:28 AM
    In a sign of the rising power of Islamists in Turkey, more than 100,000 people recently gathered in Diyarbakir, the main city in Turkey’s predominantly Kurdish southeast, to mark the birthday of the Prophet Muhammad. The gathering highlighted tensions with the pro-secular Kurdish nationalist movement. Dorian Jones reports from Diyarbakir.
    Video

    Video Turkish Kurd Islamist Rally Stokes Tensions

    In a sign of the rising power of Islamists in Turkey, more than 100,000 people recently gathered in Diyarbakir, the main city in Turkey’s predominantly Kurdish southeast, to mark the birthday of the Prophet Muhammad. The gathering highlighted tensions with the pro-secular Kurdish nationalist movement. Dorian Jones reports from Diyarbakir.
    Video

    Video Pakistani School Helps Slum Kids

    Master Mohammad Ayub runs a makeshift school in a public park in Islamabad. Thousands of poor children have benefited from his services over the years, but, as VOA's Ayesha Tanzeem reports, roughly 25 million school-age youths don't get an education in Pakistan.
    Video

    Video Florida’s Weeki Wachee ‘Mermaids’ Make a Splash

    Since 1947, ‘mermaids’ have fascinated tourists at central Florida’s Weeki Wachee Springs State Park with their fluid movements and synchronized ballet. Performing underwater has its challenges, including cold temperatures and a steady current, as VOA’s Lin Yang and Joseph Mok report.
    Video

    Video Somali, African Union Forces Face Resurgent Al-Shabab

    The Islamic State terror group claimed its first attack in Somalia earlier this week, though the claim has not been verified by forces on the ground. Meanwhile, al-Shabab militants have stepped up their attacks as Somalia prepares for elections later this year. Henry Ridgwell reports there are growing frustrations among Somalia’s Western backers over the country’s slow progress in forming its own armed forces to establish security after 25 years of chaos.
    Video

    Video Bangladesh Targeted Killings Spark Wave of Fear

    People in Bangladesh’s capital are expressing deep concern over the brutal attacks that have killed secular blogger, and most recently a gay rights activist and an employee of the U.S. embassy. Xulhaz Mannan, an embassy protocol officer and the editor of the country’s only gay and transgender magazine Roopban; and his friend Mehboob Rabbi Tanoy, a gay rights activist, were hacked to death by five attackers in Mannan’s Dhaka home earlier this month.
    Video

    Video Documentary Tells Tale of Chernobyl Returnees

    Ukraine this week is marking the 30th anniversary of the world's worst nuclear accident, at the Chernobyl nuclear power plant. Soviet officials at first said little about the accident, but later evacuated a 2,600-square-kilometer "exclusion zone." Some people, though, came back. American directors Holly Morris and Anne Bogart created a documentary about this faithful and brave community. VOA's Tetiana Kharchenko reports from New York on "The Babushkas of Chernobyl." Carol Pearson narrates.
    Video

    Video Nigerians Feel Bite of Buhari Economic Policy

    Despite the global drop in the price of oil, Nigerian President Muhammadu Buhari has refused to allow the country's currency to devalue, leading to a shortage of foreign exchange. Chris Stein reports from Lagos businessmen and consumers are feeling the impact as the country deals with a severe fuel shortage.
    Video

    Video  Return to the Wild

    There’s a growing trend in the United States to let old or underused golf courses revert back to nature. But as Erika Celeste reports from one parcel in Grafton, Ohio, converting 39 hectares of land back to green space is a lot more complicated than just not mowing the fairway.
    Video

    Video West Urges Unity in Libya as Migrant Numbers Soar

    The Italian government says a NATO-led mission aimed at stemming the flow of migrants from Libya to Europe could be up and running by July. There are concerns that the number of migrants could soar as the route through Greece and the Balkans remains blocked. Western powers say the political chaos in Libya is being exploited by people smugglers — and they are pressuring rival groups to come together under the new unity government. VOA's Henry Ridgwell reports.
    Video

    Video Russia’s TV Rain Swims Against Tide in Sea of Kremlin Propaganda

    Russia’s media freedoms have been gradually eroded under President Vladimir Putin as his government has increased state ownership, influence, and restrictions on critical reporting. Television, where most Russians get their news, has been the main target and is now almost completely state controlled. But in the Russian capital, TV Rain stands out as an island in a sea of Kremlin propaganda.

    Special Report

    Adrift The Invisible African Diaspora