Performance Analysis: Using the Northern Sea Route as an Alternative to Traditional Routes

The grounding accident of M/V EVER GIVEN in the Suez Canal causes a catastrophic loss on shipping companies. Alternatively, previous studies have presented encouraging ﬁ ndings of the remarkable bene ﬁ ts of time and cost saving in the Northern sea route (NSR) due to extend the ice-free time and shorten the distance. Ships using the NSR could shorten as much as 40% of the sailing distance from China (Shanghai) to Europe (Rotterdam) compared with the traditional route via the Suez Canal. This paper investigates the economic potential of using the NSR as a cost-effective route in comparison with Suez Canal Route (SCR) between China and Europe. To achieve this target, the study evaluates the net pro ﬁ t for the SCR ﬂ eet and NSR ﬂ eet by involving the factors, e.g., bunker price, ice condition and ship loading rate, etc. The case-study results show that the NSR ﬂ eet is not pro ﬁ table compared to the SCR, due to the limited cargo transport capability and ice restriction. Only if the loading rate for SCR ﬂ eet is lower than some threshold value or the bunker price is high enough, the NSR turns to be pro ﬁ table.