The Regulation of Continental Shelf Development: Rethinking International Standards
Benefits and Risk of the NSR to the North Pacific
2012. 6. 22
Dr. Sung-Woo Lee
Contents
Ⅰ. Evaluating Savings in Distance & Time by Using NSR
Ⅱ. Examining Possible Scenarios of Container Shipping Using NSR
Ⅲ. Can NSR be Competitive by Comparison with Suez Route?
Ⅳ. Can we manage the risk of NSR?
Ⅴ. Concluding Remarks
Evaluating Savings in Distance & Time by Using NSR
Ⅰ. Evaluating Savings in Distance & Time by Using NSR
History of Arctic Sea Ice
2010
(third lowest)
2007
(lowest)
http://nsidc.org/icelights/2011/07/14/heading-towards-the-summer-minimum-ice-extent/
3
Arctic Sea Ice Concentration
Ⅰ. Evaluating Savings in Distance & Time by Using NSR
September 1999
September 2004
September 2007
September 2010
http://earthobservatory.nasa.gov/Features/WorldOfChange/sea_ice.php
4
Citation by Expert
Ⅰ. Evaluating Savings in Distance & Time by Using NSR
Arctic sea ice extent is accelerated decline by climate change
Intergovernmental Panel on Climate Change
Deborah Zabarenko, Environment Correspondent said: "It appears we're on pace about 30 years earlier than expected to
reach a state where we don't have sea ice or at least not very much in late summer in the Arctic Ocean."
National Aeronautics and Space Administration
NASA climate scientist Jay Zwally said: “At this rate, the Arctic Ocean could be nearly ice-free at the end of summer by 2012,
much faster than previous predictions.”
The Centre for Northern studies at Laval University
Professor Peter Wadhams was quoted as saying...
"The implication is that this is not a cycle, not just a fluctuation. The loss this year will precondition the ice for the same thing to happen again next year, only
worse. There will be even more opening up, even more absorption and even more melting. In the end, it will just melt away quite suddenly. It might not be as
early as 2013 but it will be soon, much earlier than 2040."
National Snow and Ice Data Center
The extent of the Arctic sea ice was at its second lowest in the satellite record, on 9 Sep. 2011.
NSR had a record long sailing season in 2011, spanning from 29 June to November 18
5
Plausible Countries to Use NSR
In Europe
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Russia
Poland
Sweden
Norway
Denmark
Finland
Estonia
Latvia
Lithuania
Iceland
Germany
Netherland
Belgium
UK
Ireland
France
Portugal
Spain
Italy
Ⅰ. Evaluating Savings in Distance & Time by Using NSR
InAsia
•
•
•
•
•
•
•
•
•
•
•
China
Korea
Japan
Taiwan
Hongkong
Phillipines
Vietnam
Cambodia
Thailand
Indonesia
Singapore
6
Ⅰ. Evaluating Savings in Distance & Time by Using NSR
Saved Shipping Distance by NSR
China
Unit : NM
Dalian
Tianjin
Qingdao Shanghai
Ningbo
Xiamen
Korea
Japan
Shenzhen Guangzhou Busan
Tokyo
Russia
St Petersburg
3,325
3,317
3,223
2,986
2,961
2,024
1,505
1,505
3,706
4,464
Poland
Gdynia
3,325
3,317
3,223
2,986
2,961
2,024
1,505
1,505
3,706
4,464
Sweden
Gothenburg
3,325
3,317
3,223
2,986
2,961
2,024
1,505
1,505
3,706
4,464
Norway
Oslo
3,356
3,348
3,254
3,016
2,992
2,055
1,536
1,536
3,737
4,495
Denmark
Aarhus
3,325
3,317
3,223
2,986
2,961
2,024
1,505
1,505
3,706
4,464
Finland
Helsinki
3,325
3,317
3,223
2,986
2,961
2,024
1,505
1,505
3,706
4,464
Estonia
Tallinn
3,325
3,317
3,223
2,986
2,961
2,024
1,505
1,505
3,716
4,464
Latvia
Riga
3,325
3,317
3,223
2,986
2,961
2,024
1,505
1,505
3,716
4,464
Lithuania
Klaipeda
3,325
3,317
3,223
2,986
2,961
2,024
1,505
1,505
3,716
4,464
Iceland
Reykjavik
3,397
3,389
3,295
3,057
3,033
2,096
1,577
1,577
3,787
4,536
Germany
Bremen/Bremerhaven
2,992
2,984
2,890
2,652
2,628
1,690
1,172
1,172
3,373
4,131
Netherlands
Rotterdam
2,701
2,693
2,599
2,361
2,337
1,400
881
881
3,082
3,840
Belgium
Antwerp
2,629
2,621
2,527
2,289
2,265
1,328
809
809
3,010
3,768
UK
Felixstowe
2,621
2,614
2,519
2,282
2,257
1,320
801
801
3,002
3,760
Ireland
Dublin
2,487
2,479
2,385
2,147
2,123
1,185
667
667
2,868
3,626
France
Le Havre
2,343
2,336
2,241
2,004
1,980
1,042
524
524
2,725
3,483
Portugal
Lisbon
682
675
580
343
319
-619
-1,138
-1,138
1,063
1,822
Spain
Valencia
-520
-527
-622
-859
-884
-1,821
-2,340
-2,340
-139
620
Italy
Gioia Tauro
-1,864
-1,871
-1,966
-2,203
-2,227
-3,165
-3,683
-3,683
-1,482
-724
• Note : Shipping distance & days: referred Netpas Distance Program
7
Ⅰ. Evaluating Savings in Distance & Time by Using NSR
Saved Shipping Distance by NSR
Taiwan
Unit : NM
Kaohsiung
Hong
Kong
Philippines
Vietnam
Cambodia
Thailand
Manila
Ho Chi
Minh
Sihanoukville
Laem
Chabang
Indonesia
Singapore
Tanjung Priok
Russia
St Petersburg
1,959
1,535
1,199
-362
-403
-446
-1,208
-218
Poland
Gdynia
1,959
1,535
1,199
-362
-403
-446
-1,208
-218
Sweden
Gothenburg
1,959
1,535
1,199
-362
-403
-446
-1,208
-218
Norway
Oslo
1,990
1,566
1,230
-331
-372
-415
-1,177
-187
Denmark
Aarhus
1,959
1,535
1,199
-362
-403
-446
-1,208
-218
Finland
Helsinki
1,959
1,535
1,199
-362
-403
-446
-1,208
-218
Estonia
Tallinn
1,959
1,535
1,199
-362
-403
-446
-1,208
-218
Latvia
Riga
1,959
1,535
1,199
-362
-403
-446
-1,208
-218
Lithuania
Klaipeda
1,959
1,535
1,199
-362
-403
-446
-1,208
-218
Iceland
Reykjavik
2,031
1,607
1,271
-290
-331
-374
-1,136
-146
Germany
Bremen/Bremerhaven
1,625
1,202
865
-696
-736
-779
-1,541
-552
Netherlands
Rotterdam
1,335
911
575
-986
-1,027
-1,070
-1,832
-842
Belgium
Antwerp
1,263
839
503
-1,058
-1,099
-1,142
-1,904
-914
UK
Felixstowe
1,255
832
495
-1,066
-1,107
-1,150
-1,912
-922
Ireland
Dublin
1,121
697
360
-1,200
-1,241
-1,284
-2,046
-1,056
France
Le Havre
977
554
217
-1,344
-1,385
-1,427
-2,190
-1,200
Portugal
Lisbon
-684
-1,107
-1,444
-3,005
-3,046
-3,088
-3,851
-3,400
Spain
Valencia
-1,886
-2,309
-2,646
-4,207
-4,248
-4,291
-5,053
-3,524
Italy
Gioia Tauro
-3,230
-3,653
-3,990
-5,551
-5,592
-5,634
-6,396
-5,407
• Note : Shipping distance & days: referred Netpas Distance Program
8
Ⅰ. Evaluating Savings in Distance & Time by Using NSR
Saved Shipping Time by NSR
China
Unit : day
Dalian
Tianjin
Qingdao
Shanghai
Ningbo
Xiamen
Korea
Japan
Shenzhen Guangzhou Busan
Tokyo
Russia
St Petersburg
-0.4
-0.4
-0.6
-1.2
-1.2
-3.4
-4.6
-4.6
0.5
2.2
Poland
Gdynia
-0.4
-0.4
-0.6
-1.2
-1.2
-3.4
-4.6
-4.6
0.5
2.2
Sweden
Gothenburg
-0.4
-0.4
-0.6
-1.2
-1.2
-3.4
-4.6
-4.6
0.5
2.2
Norway
Oslo
-0.3
-0.4
-0.6
-1.1
-1.2
-3.3
-4.5
-4.5
0.5
2.3
Denmark
Aarhus
-0.4
-0.4
-0.6
-1.2
-1.2
-3.4
-4.6
-4.6
0.5
2.2
Finland
Helsinki
-0.4
-0.4
-0.6
-1.2
-1.2
-3.4
-4.6
-4.6
0.5
2.2
Estonia
Tallinn
-0.4
-0.4
-0.6
-1.2
-1.2
-3.4
-4.6
-4.6
0.5
2.2
Latvia
Riga
-0.4
-0.4
-0.6
-1.2
-1.2
-3.4
-4.6
-4.6
0.5
2.2
Lithuania
Klaipeda
-0.4
-0.4
-0.6
-1.2
-1.2
-3.4
-4.6
-4.6
0.5
2.2
Iceland
Reykjavik
-0.2
-0.3
-0.5
-1.0
-1.1
-3.3
-4.5
-4.5
0.7
2.4
Germany
Bremen/Bremerhaven
-1.2
-1.2
-1.4
-2.0
-2.0
-4.2
-5.4
-5.4
-0.3
1.5
Netherlands
Rotterdam
-1.8
-1.9
-2.1
-2.6
-2.7
-4.9
-6.1
-6.1
-1.0
0.8
Belgium
Antwerp
-2.0
-2.0
-2.3
-2.8
-2.9
-5.0
-6.2
-6.2
-1.1
0.6
UK
Felixstowe
-2.0
-2.1
-2.3
-2.8
-2.9
-5.0
-6.2
-6.2
-1.2
0.6
Ireland
Dublin
-2.3
-2.4
-2.6
-3.1
-3.2
-5.4
-6.6
-6.6
-1.5
0.3
France
Le Havre
-2.7
-2.7
-2.9
-3.5
-3.5
-5.7
-6.9
-6.9
-1.8
-0.0
Portugal
Lisbon
-6.5
-6.5
-6.8
-7.3
-7.4
-9.5
-10.7
-10.7
-5.6
-3.9
Spain
Valencia
-9.3
-9.3
-9.5
Italy
Gioia Tauro
-12.4
-12.4
-12.7
• Note : Shipping distance & days: referred Netpas Distance Program
• Non-ice water speed : 18NM/H
NSR
-10.1
-10.1
-12.3
-13.5
-13.5
-8.4
• Ice water
speed
: 3NM/H
3 months
length-16.6
: 700NM -16.6
open -13.3• Sea Ice
-13.2
-15.4
-11.5
-6.7
-9.8
9
Ⅰ. Evaluating Savings in Distance & Time by Using NSR
Saved Shipping Time by NSR
Taiwan
Unit : day
Kaohsiung
Hong
Kong
Philippines
Vietnam
Cambodia
Thailand
Manila
Ho Chi
Minh
Sihanoukville
Laem
Chabang
Indonesia
Singapore
Tanjung Priok
Russia
St Petersburg
-3.6
-4.5
-5.3
-8.9
-9.0
-9.1
-10.9
-8.6
Poland
Gdynia
-3.6
-4.5
-5.3
-8.9
-9.0
-9.1
-10.9
-8.6
Sweden
Gothenburg
-3.6
-4.5
-5.3
-8.9
-9.0
-9.1
-10.9
-8.6
Norway
Oslo
-3.5
-4.5
-5.3
-8.9
-9.0
-9.1
-10.8
-8.5
Denmark
Aarhus
-3.6
-4.5
-5.3
-8.9
-9.0
-9.1
-10.9
-8.6
Finland
Helsinki
-3.6
-4.5
-5.3
-8.9
-9.0
-9.1
-10.9
-8.6
Estonia
Tallinn
-3.6
-4.5
-5.3
-8.9
-9.0
-9.1
-10.9
-8.6
Latvia
Riga
-3.6
-4.5
-5.3
-8.9
-9.0
-9.1
-10.9
-8.6
Lithuania
Klaipeda
-3.6
-4.5
-5.3
-8.9
-9.0
-9.1
-10.9
-8.6
Iceland
Reykjavik
-3.4
-4.4
-5.2
-8.8
-8.9
-9.0
-10.7
-8.4
Germany
Bremen/Bremerhaven
-4.3
-5.3
-6.1
-9.7
-9.8
-9.9
-11.7
-9.4
Netherlands
Rotterdam
-5.0
-6.0
-6.8
-10.4
-10.5
-10.6
-12.3
-10.1
Belgium
Antwerp
-5.2
-6.2
-6.9
-10.6
-10.6
-10.7
-12.5
-10.2
UK
Felixstowe
-5.2
-6.2
-7.0
-10.6
-10.7
-10.8
-12.5
-10.2
Ireland
Dublin
-5.5
-6.5
-7.3
-10.9
-11.0
-11.1
-12.8
-10.5
France
Le Havre
-5.8
-6.8
-7.6
-11.2
-11.3
-11.4
-13.2
-10.9
Portugal
Lisbon
-9.7
-10.7
-11.4NSR
water speed
-15.1• Non-ice
-15.2
-15.3 : 18NM/H
-17.0
Spain
Valencia
-12.5
-13.4
3 months-17.8
-14.2
Italy
Gioia Tauro
-15.6
-16.6
-17.3
• Note : Shipping distance & days: referred Netpas Distance Program
open
• Ice water speed : 3NM/H
-17.9
-18.0
-19.8
• Sea Ice length : 700NM
-21.0
-21.0
-21.1
-22.9
-16.0
-16.3
-20.6
10
Ⅰ. Evaluating Savings in Distance & Time by Using NSR
Saved Shipping Time by NSR
China
Unit : day
Dalian
Tianjin
Qingdao
Shanghai
Ningbo
Xiamen
Korea
Japan
Shenzhen Guangzhou Busan
Tokyo
Russia
St Petersburg
7.7
7.7
7.5
6.9
6.9
4.7
3.5
3.5
8.6
10.3
Poland
Gdynia
7.7
7.7
7.5
6.9
6.9
4.7
3.5
3.5
8.6
10.3
Sweden
Gothenburg
7.7
7.7
7.5
6.9
6.9
4.7
3.5
3.5
8.6
10.3
Norway
Oslo
7.8
7.8
7.5
7.0
6.9
4.8
3.6
3.6
8.7
10.4
Denmark
Aarhus
7.7
7.7
7.5
6.9
6.9
4.7
3.5
3.5
8.6
10.3
Finland
Helsinki
7.7
7.7
7.5
6.9
6.9
4.7
3.5
3.5
8.6
10.3
Estonia
Tallinn
7.7
7.7
7.5
6.9
6.9
4.7
3.5
3.5
8.6
10.3
Latvia
Riga
7.7
7.7
7.5
6.9
6.9
4.7
3.5
3.5
8.6
10.3
Lithuania
Klaipeda
7.7
7.7
7.5
6.9
6.9
4.7
3.5
3.5
8.6
10.3
Iceland
Reykjavik
7.9
7.8
7.6
7.1
7.0
4.9
3.7
3.7
8.8
10.5
Germany
Bremen/Bremerhaven
6.9
6.9
6.7
6.1
6.1
3.9
2.7
2.7
7.8
9.6
Netherlands
Rotterdam
6.3
6.2
6.0
5.5
5.4
3.2
2.0
2.0
7.1
8.9
Belgium
Antwerp
6.1
6.1
5.8
5.3
5.2
3.1
1.9
1.9
7.0
8.7
UK
Felixstowe
6.1
6.0
5.8
5.3
5.2
3.1
1.9
1.9
6.9
8.7
Ireland
Dublin
5.8
5.7
5.5
5.0
4.9
2.7
1.5
1.5
6.6
8.4
France
Le Havre
5.4
5.4
5.2
4.6
4.6
2.4
1.2
1.2
6.3
8.1
Portugal
Lisbon
1.6
1.6
1.3
0.8
0.7
-1.4
-2.6
-2.6
2.5
4.2
Spain
Valencia
-1.2
-1.2
-1.4
-2.0
-2.0
-4.2
-5.4
-5.4
-0.3
1.4
Italy
Gioia Tauro
-4.3
-4.3
-4.6
• Note : Shipping distance & days: referred Netpas Distance Program
NSR
• Non-ice
speed : 18NM/H
-5.1
-7.3 water-8.5
-8.5
-3.4
12months -5.2
• Sea ice length : 0NM
open
-1.7
11
Ⅰ. Evaluating Savings in Distance & Time by Using NSR
Saved Shipping Time by NSR
Taiwan
Unit : day
Kaohsiung
Hong
Kong
Philippines
Vietnam
Cambodia
Thailand
Manila
Ho Chi
Minh
Sihanoukville
Laem
Chabang
Indonesia
Singapore
Tanjung Priok
Russia
St Petersburg
4.5
3.6
2.8
-0.8
-0.9
-1.0
-2.8
-0.5
Poland
Gdynia
4.5
3.6
2.8
-0.8
-0.9
-1.0
-2.8
-0.5
Sweden
Gothenburg
4.5
3.6
2.8
-0.8
-0.9
-1.0
-2.8
-0.5
Norway
Oslo
4.6
3.6
2.8
-0.8
-0.9
-1.0
-2.7
-0.4
Denmark
Aarhus
4.5
3.6
2.8
-0.8
-0.9
-1.0
-2.8
-0.5
Finland
Helsinki
4.5
3.6
2.8
-0.8
-0.9
-1.0
-2.8
-0.5
Estonia
Tallinn
4.5
3.6
2.8
-0.8
-0.9
-1.0
-2.8
-0.5
Latvia
Riga
4.5
3.6
2.8
-0.8
-0.9
-1.0
-2.8
-0.5
Lithuania
Klaipeda
4.5
3.6
2.8
-0.8
-0.9
-1.0
-2.8
-0.5
Iceland
Reykjavik
4.7
3.7
2.9
-0.7
-0.8
-0.9
-2.6
-0.3
Germany
Bremen/Bremerhaven
3.8
2.8
2.0
-1.6
-1.7
-1.8
-3.6
-1.3
Netherlands
Rotterdam
3.1
2.1
1.3
-2.3
-2.4
-2.5
-4.2
-1.9
Belgium
Antwerp
2.9
1.9
1.2
-2.4
-2.5
-2.6
-4.4
-2.1
UK
Felixstowe
2.9
1.9
1.1
-2.5
-2.6
-2.7
-4.4
-2.1
Ireland
Dublin
2.6
1.6
0.8
-2.8
-2.9
-3.0
-4.7
-2.4
France
Le Havre
2.3
1.3
0.5
-3.1
-3.2
-3.3
-5.1
-2.8
Portugal
Lisbon
-1.6
-2.6
-3.3
-7.0NSR
-7.1
-7.1
-8.9
-7.9
Spain
Valencia
-4.4
-5.3
-6.1
Italy
Gioia Tauro
-7.5
-8.5
-9.2
-12.8
-12.9
-13.0
-14.8
-12.5
• Non-ice water speed : 18NM/H
12months
-9.7
-9.8
-9.9
-11.7
-8.2
• Sea ice length
: 0NM
open
12
Examining Possible Scenarios of
Container Shipping Using NSR
Ⅱ. Examining Possible Scenarios of Container Shipping Using NSR
Traffic Forecast by targeted countries
Forecast of con’ traffic between 6 Asian and targeted European countries would be around 46 M TEU in 2030
China
Korea
Japan
2010
10,043
1,416
376
2015
15,171
1,715
2020
21,882
2025
2030
Unit: ‘000 TEU
2010~2030
Taiwan
HongKong
Philippines
Sum
296
636
123
12,890
407
376
804
154
18,627
2,284
516
503
1,075
209
26,469
29,980
2,635
526
583
1,276
260
35,261
39,555
2,982
534
666
1,494
317
45,549
7.1%
3.8%
1.8%
4.1%
4.4%
4.9%
6.5%
• Note : applying traffic O/D after forecast national traffic using real GDP growth
• Source : traffic – CI online, GDP growth : Global Insight
14
Ⅱ. Examining Possible Scenarios of Container Shipping Using NSR
SP Survey
SP
• Stated Preference
• Selection or rank of scenario
• Possible to apply to demand of new transportation
VS.
RP
• Revealed Preference
• Using records or real data
• Impossible to apply to demand of new transportation
• Target : Forwarder (excluding shipping companies)
• Selection between Suez Canal Route and NSR
• Variables : Time, Cost
- Cost : 120%, 110%, 100%, 80%, 70%
- Time : 30 days, 25 days, 20 days
• Response : 43 persons in 30 companies
• Analytical tool : Limdep
15
NSR Shares by Scenario
•Suez canal conditions
- cost : 100%
(1,000~1,500$/TEU in presence)
- time : 30days
Ⅱ. Examining Possible Scenarios of Container Shipping Using NSR
No
NSR Cost
NSR Time
NSR Shares
①
120%
30days
1%
②
110%
30days
5%
③
100%
30days
20%
④
80%
30days
86%
⑤
70%
30days
97%
⑥
120%
25days
10%
⑦
110%
25days
34%
⑧
100%
25days
72%
⑨
80%
25days
98%
⑩
70%
25days
100%
⑪
120%
20days
52%
⑫
110%
20days
84%
⑬
100%
20days
96%
⑭
80%
20days
100%
⑮
70%
20days
100%
16
Ⅱ. Examining Possible Scenarios of Container Shipping Using NSR
Traffic Forecast via NSR
• Cost
- Scenario Analysis
• Navigatle period on NSR
- 2015 : 3 months
- 2020 : 6 months
- 2025 : 9 months
- 2030 : 12 months (common use)
• Time
- using data by previous method
• AMSA(2009) : 90~100 days by 2080
• Ragner(2008) : up to 170 days in 100 years
• NSIDC(2007) : ice-free arctic by 2030
• If NSR Cost 110%,
- 14M TEU in 2030 year, 31.6% share
• If NSR Cost 100%,
- 29M TEU in 2030 year, 64.1% share
<Traffic Forecast via NSR>
NSR Cost
2015
120%
<Share of NSR>
Unit : ‘000 TEU
2020
2025
2030
2015
2020
2025
2030
1
31
163
442
0.1%
1.2%
4.6%
9.7%
110%
6
132
596
1,438
0.3%
5.0%
16.9%
31.6%
100%
29
423
1,417
2,920
1.6%
16.0%
40.2%
64.1%
80%
249
1,145
2,457
4,304
13.3%
43.3%
69.7%
94.5%
70%
376
1,252
2,542
4,392
20.2%
47.3%
72.1%
96.4%
17
Can NSR be Competitive by Comparison with Suez Route?
Applied Sailing Cost
1
2
3
Charter
Fuel
Ship
operation
Ⅲ. Can NSR be Competitive by Comparison with Suez Route ?
• Ship size : 8,000TEU
• Charter
- Ship for Suez Canal Route : 45,000$/day
- Ship for NSR : 54,000$/day (20% up)
• Distance : between Tokyo and Rotterdam
• Speed
- non-ice water : 18NM/h
- ice water : 3NM/h (considering ice breaking)
• Ice water length
- 3 months sailing : 700NM
- 6 months sailing : 300NM
- 9 months sailing : 100NM
- 12 months sailing : 0NM
• Fuel consumption : 0.3 ton/NM
• Fuel Cost : 445$/ton, 720$/ton, 995$/ton
• Ship for Suez Canal Route : 23,000$/day
• Ship for NSR : 27,600$/day (20% up)
• Suez Canal Toll
- 550 thouand dollar (including
incedental expense)
• NSR Ice Breaking Service Fee
- 7.6 million dollar
Toll/
Ice
Breaking
Service
Fee
4
• Ice breaking service fee
1) Rates for services on the escorting of ships on the Northern Sea
Route to ensure the transportation of cargo.
- Rates for container : 1,048 Rouble/ton ($34.4/ton)
- 24 ton per TEU (Miaojia Liu et al, 2010)
- $4 million for 8,000TEU ship, 60% in load
2) Rates for services on the escorting of ships along the Northern Sea
Route collected from transport ships sailing in ballast, towing,
technical, auxiliary (including research) and other floating
- Transit along the waterways of the Northern Sea Route : 1,000
Rouble/ton ($32.8/ton)
- $3.6 million for DWT 110, 000
3) excluded port services
19
Sailing Cost per TEU between Tokyo & Ⅲ. Can NSR be Competitive by Comparison with Suez Route ?
Rotterdam
Cost per TEU excluding ice breaking service fee
Fuel Cost
445$/ton
720$/ton
995$/ton
Cost/
Rates
Cost
Rate
Cost
Rate
Cost
Rate
Suez Canal
Route
(including Toll)
855.2
1,049.1
1,243.1
Unit : $
NSR
3 months
6 months
748.3
12.5%
927.0
11.6%
1,105.7
11.1%
717.3
16.1%
877.6
16.4%
1,037.9
16.5%
9 months
674.8
21.1%
817.7
22.1%
960.5
22.7%
Cost per TEU including ice breaking service fee
Fuel Coast
445$/ton
720$/ton
995$/ton
Cost/
Rates
Cost
Rate
Cost
Rate
Cost
Rate
Suez Canal
Route
(including Toll)
855.2
1,049.1
1,243.1
12 months
636.0
25.6%
764.0
27.2%
892.0
28.2%
Unit : $
NSR
3 months
6 months
9 months
12 months
1,200.4
-40.4%
1,379.1
-31.5%
1,557.9
-25.3%
1,578.8
-84.6%
1,739.0
-65.8%
1,899.3
-52.8%
1,922.2
-124.8%
2,065.1
-96.8%
2,207.9
-77.6%
2,213.1
-158.8%
2,341.0
-123.1%
2,469.0
-98.6%
20
Can we manage the risk of NSR?
Ⅳ. Can we manage the risk of NSR?
Challenges in Arctic
• Temperatures
• Darkness
• Polar storms
• Huge distances
• Extreme loads and response
• Human aspects
• Variety in ice conditions
• Supply system
• Political issues
• etc
• Contingency plan
• Improved infrastructure
• Increased contingency capacity
• Special monitoring system
• Specialized vessels
• Ice navigation and tracking system
• Comprehensive international
governance
• etc
22
Ⅳ. Can we manage the risk of NSR?
Risk Level in the Arctic
Risk = Probability × Consequence
Severity of consequences and probability drive risks
General Risk
Risk
Visible Risk in Arctic
Invisible Risk in Arctic
Acceptable risk level
Rescue
Material failure
Oil spill
Risk mitigated through technology and regulatory measures
23
Risk Management Tools
Ⅳ. Can we manage the risk of NSR?
Oil Spill Detection
Vessel Detection
Ice Navigation
Iceberg Tracking
24
Concluding Remarks
Ⅴ. Concluding Remarks
 In conclusion,
The NSR has the economical effect in terms of distance. However the expensive NSR toll fee imposed by Russia is a key
issue whether NSR can become a popular shipping route or not,
The forecasted cargo traffic between Asia and Europe will be around 46 million TEU.,
Providing us the grounds enough to promote the use of NSR
According to the survey, about 20% of Korea Shippers and forwarding companies said that they are going to use the NSR,
72% and 96% of them will use NSR , if they can saved 5 and 10 days, respectively
According to the survey, the expected traffic volume per scenario are as below
6,000TEU in 2015 and 1.4 million TEU in 2030 if the cost of NSR is 10% higher than the SCR
29,000TEU in 2015 and 2.9 million TEU in 2030 if the costs of NSR and the SCR is same
249,000 TEU in 2015 and 4.3 million TEU in 2030 if the cost of NSR is 20% lower than the SCR
26
Ⅴ. Concluding Remarks
When applied to 720 USD , 27.2% will be saved per unit TEU
If incresed to 995 USD, 28.2% is able to be saved
Shipping cost of NSR including ice breaker fees
Assuming $995 of fuel cost, the shipping cost via the NSR will increase by 34.9% for 3 months’non-ice water period
Assuming $995 of fuel cost , the shipping cost will increase by 14.1% for 12 month’s non-ice water period
As such, the commercialization of NSR is mainly depended on ice breaker fee
Simultaneously, we should consider how to manage and reduce invisible risks in NSR .
It is also related to cost of journey of NSR like insurance.
That is why we need to approach, gradually.
First , Destination-Arctic shipping, Second, intra-Arctic shipping, Third, Transit-Arctic shipping.
27
Ⅴ. Concluding Remarks
 Implication
1. Need to discuss more on how to keel appropriate toll level in terms of commercial use of NSR
2. Establishing related laws and amendment system for the NSR
3. Developing appropriate vessels for the NSR at the earliest possible
4. Establishing a global cooperation system in order to promote the NSR
5. Reinforcing risk management system for the NSR
6. Developing ports along the coastal area in the Arctic
7. Establishing gradual approaching way to commercialize the NSR
28
Sung-Woo Lee , Ph.D.
Director, International Logistics Research Department
E-mail: [email protected]