25 August 2012, 11:00

The Arctic region as a key global transportation hub of the future

The Arctic region as a key global transportation hub of the future

Russia’s geographical position naturally defines its special role as a connecting bridge between the countries of Europe and the Asia-Pacific region. Short and economically viable transportation arteries that Russia can offer have drawn attention of shippers and carriers throughout the world. In turn, the Russian leaders have viewed the development of transport infrastructure as a potential source of significant revenues, comparable to mineral export revenues.

At present, international freight transit through Russia is less than 1% of commodity turnover between the European and the Asian countries. The country uses a mere 5 to 7% of its transit capabilities. The Arctic region has a special significance for realization of Russia’s potential in the transportation area. It has good opportunities for becoming one of the world’s key transportation hub. First and foremost that’s because the Northern Sea Route (NSR) passes through the Arctic seas and the section of the Arctic Ocean within Russia’s exclusive economic zone. It’s Russia’s main seaway within the polar region which serves the Arctic ports and Siberia’s major rivers. This Northern Sea Route is the shortest passage between Europe and Asia.

In the recent years the subject of NSR has been widely discussed in the world’s transport industry. The high level of attention paid to the NSR both in Russia and abroad is caused by the following factors. First, the NSR is an alternative to the existing freight shipping routes which offers a shorter passage between Europe and the Far East. According to estimates, the volume of freight traffic through the NSR may exceed 50 million tons per year in the foreseeable future. Using the NSR means a significant economy in terms of distance and time compared to the traditional international routes (which pass through the Suez and Panama Canals). Thus, for the “etalon” Holland – Japan route in Eurasia which passes through the Indian Ocean the distance is 11,200 miles. For the NSR it is 3,900 miles or 34% less which means significantly lower freight costs. In addition, canal navigation has its limitations in terms of vessel size and draft. The fact that the Arctic route is pirate-free is also of certain importance.

Additional level of interest in the development of the NSR as an international transit freight route is prompted by the climate change expectations. It is expected that global warming will result in a significant decrease in the Arctic ice area which will make northern navigation easier. In particular, an absolute minimum in the Arctic ice area in all the history of observations was recorded in September 2007.

Second, the prospects of freight traffic intensification within the Arctic region rely on the plans for developing rich hydrocarbon resources discovered there. At present, the NSR freight transit largely consists of gas condensate and oil products shipments, with large-capacity tankers accounting for the majority of the transit cargo traffic. Other minerals can also be transported from the Arctic region by sea; for instance mineral fertilizers can be shipped from the Kola Peninsula to Asian countries.

Aside from that, the construction of production facilities which are necessary for Arctic mineral development will require setting up a reliable transportation support infrastructure. Reliable transportation support is, essentially, a key to accessing the rich natural resources of the Russian north and ensuring their continuous supply to the domestic and foreign markets.

Currently, Russia has been gradually restoring the NSR following the post-Soviet decline. It has taken steps to turn it into a global transport corridor. Moreover, any steps in this direction are viewed as a priority in Russia’s economic policy for the coming years. Russian President Vladimir Putin stated: “We see the future of the Northern Sea Route in particular as an international shipping artery able to compete with traditional shipping lines in terms of the cost of services, security and quality”. The NSR is, essentially, a special Arctic super project. It can become a key to building the future Arctic transportation hub which will unite regional transportation subsystems of the European, Siberian and Far Eastern north.Development of the NSR implies the intensification of icebreaker and transportation fleet construction and the development of navigation support services. Issues of navigation safety play an important part here, especially those pertaining to minimization of potential environmental risks.

Upgrade of the existing and construction of new ports and terminals on Russia’s Arctic and Far East coast necessary for the shipping route is a special task. Developing the Murmansk transportation hub and building a year-round deep-water hub seaport on top of it will mark an important milestone in the establishment of the NSR. It will be Russia’s largest bulk and loose cargo, containerized cargo, oil and oil products transshipment center. In addition, it will be integrated into the North-South international transport corridor which offers a convenient international transit shipment route from Indian Ocean and Persian Gulf countries to Northern and Western Europe countries through Iran, the Caspian Sea and Russia.

The problem of upgrades to the NSR is closely connected with the setting up of an effective air service system for the northern regions based on a large scale upgrade of airports and the development of small aviation. In addition, to ensure proper utilization of sea transport it is necessary to build a fully-fledged road network. Of particular importance here are the plans of building the Belkomur transportation railway. It will directly connect the Urals and Komi with the ice-free ports of Archangelsk, Murmansk and the countries of Northern Europe and, in perspective, with the Siberian regions, Kazakhstan and Central Asian countries.

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