Global warming has upside for ocean shippers

Ocean carriers see opportunity for new shipping routes as ice caps melt

By Dave Hannon -- Purchasing, 2/27/2008 11:34:00 AM

Believe it or not, there is an upside to global warming for supply chain management. The melting of the polar ice caps is slowly creating new shipping routes for ocean vessels that could dramatically reduce shipping times and costs.

A recent Bloomberg story points out that ice shrinkage due to global warming may enable ships filled with oil, nickel or other commodities to sail straight over the top of the world, shortening some of the traditional ocean shipping lanes including routes from Siberia to Europe and Germany to Japan (straight over the North Pole). And some existing routes that are only available in summer months may now be available much longer in the year.

A story in the Times of London Online says that Hudson Bay is now navigable four months a year instead of three.

In a recent story in Port Strategy research fellow Michael Berk of the Canadian Institute of International Affairs said a new “Artic Bridge” route linking Russia's city of Murmansk to Churchill, Manitoba could connect Eurasia with North America. “It’s also the closest route for transporting goods from Asia to the Midwestern U.S. directly, bypassing the bottlenecks of congested ports in the Pacific,” Berk says. “When one starts to think about these issues combined, the opportunity is tremendous.”      

Just how much will those shipping times decrease? The Times story points out: “Today a ship leaving there for Canada navigates the Atlantic, the St Lawrence Seaway and the Great Lakes, on its way to Thunder Bay in Ontario. Elapsed time: 17 days. The Murmansk-to-Churchill run can be made in eight days. In October came the first preview of this glorious partnership, when the Russian vessel Kapitan Sviridov carried a load of fertilizer into Churchill in a burst of publicity and pot-banging.”

But navigating these new routes requires reinforced ships, which are suddenly much more in demand, as shippers calculate the cost of the ships vs. the savings of shorter routes year round. The Bloomberg story points out that Russian nickel producer Norilsk is spending $467 million to order five new reinforced vessels that can plow through ice in these new routes.

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