The second major Asian container operator has appeared on the Northern Sea Route in a month. For the first time, a ship from South Korea traveled through Arctic waters to Europe.
A week earlier, the weekly China—Europe Arctic Express service was launched by Chinese Sealegend Shipping: the Dubai Tower container ship left the port of Ningbo Zhoushan with calls at Philixstowe, Rotterdam, Hamburg and Gdynia. The passage along this route takes 20 days, compared to about 40 through the Suez Canal.
The difference between one flight and two operators is more significant than it seems. The only carrier on the route sets the rate alone, and the speed premium eats up all the benefits of reduced transit. The second participant switches the route to the quotation comparison mode — the cargo owner gets a lever in negotiations, and the route itself begins to be perceived as a working option for the planned budget, rather than as an experiment.
The restriction remains the same and will not go away. The ice conditions allow navigation from about July to October. It is possible to plan deliveries on the Arctic shoulder only within this window, and for the winter period the cargo returns to the southern route or goes to the railway through Kazakhstan and Zabaikalsk.
A separate effect concerns the Russian infrastructure. The Northern Sea Route is loaded with commercial container traffic unrelated to commodity exports, which changes the requirements for port handling, icebreaking support, and communications on the route.
What should an importer do on the Asia — Northern Europe route in the coming weeks? Request quotes from both operators for the September and October exits. Calculate the effect using the formula "freight plus the cost of money on the way plus insurance premium": twenty saved days for a million-dollar shipment with a financing rate of 20% per annum release about 11 thousand dollars on interest alone. Check with the insurer the terms of coverage for Arctic navigation. For a number of policies, it requires separate approval and a surcharge, which can eat into the freight gain.
Similar materials on the website
- Northern Sea Route: 20 days to Europe instead of 40 via Suez — previous stage of the story: schedule and cargo composition of the first service
- China—Europe railway transit through Russia increased by 40 percent. Where does cargo go when the Arctic window closes
