Decarbonization and Maritime Transhipment lines: Congested South vs Strategic North

Maritime routes are corridors of a few kilometres in width connecting economic regions and overcoming land transport discontinuities. International maritime shipping routes are forced to pass through specific locations corresponding to passages, capes, and straits. These routes are generally located between major markets such as Western Europe, North America, and East Asia, where an active system of commercial trade is in place.

To date, there are several maritime transhipment routes that create a global transport logistics chain:

• The third-busiest route is through the Panama Canal.

• West African routes connect the Atlantic ports of Europe, North and South America via the Cape of Good Hope with the West and South – East coast of Africa. Supertankers with oil from the Middle East to Europe follow the same route.
• South American routes through the Strait of Magellan connect Europe and the Atlantic coast with Brazil, Uruguay, and Argentina.
• Routes in the North Pacific Ocean connect the Pacific coast of the USA and Canada with Japan and China [CFC, 2021].
• Routes through Honolulu, Samoa, and the Fiji Islands, and through Tahiti and the Society Islands connect the Pacific coast of the USA with New Zealand and Australia.
• The Northern Sea Route

Congested Southern Seas

The highly frequent, stable, and inexpensive maritime transport is the cornerstone of global trade and economy, with global shipping operations being concentrated at major straits and canals, which are called chokepoints or maritime global critical infrastructures.

The traditional maritime transhipment lines, being the cheapest so far mode of transportation, present big dangers, which are making them rather vulnerable and less stable than railway roads.

When the Malacca Strait is impassable, the detour route is passing through the Lombok strait (11.813 miles): routes #1 and #3. The Sunda Strait can be another detour route; however, it contains many navigational hazards including strong tidal flows, sandbank formations along the waterway, a live volcano, poor visibility during squalls; and the existence of numerous oil drilling platforms and small islands and reefs that may disrupt safe navigation [Mohd-Rusli,2012].

If the Suez Canal is not a viable option (e.g., very large crude carriers (hereinafter VLCCs), and very large ore carriers (hereinafter VOCs) cannot pass through the Suez Canal), the navigation route is via the Cape of Good Hope (13.602 miles): route #4 and #5. When the Malacca Strait is impassable, the detour route distance is 14.529 miles [CFC, 2021].

It represents the longest strait in the world used for international navigation and can be transited in about 20 hours [PEMP, n.d]. This narrow, 550-mile strait is also a major route for oil transportation, hence creating a danger of potential oil spills or collisions, significantly damaging the biodiversity and the marine environment [Tonchev, 2017].

Moreover, the SOMS is polluted not only by the oil and ships but also by enormous noise [Gençsü&Hino, 2015], influencing the marine bio-life. The transhipment line in addition is not considered as a safe pass, since it is beset with challenges, natural (during frequent squalls from the Indian Ocean, visibility can decrease considerably to make it difficult for mariners to navigate) and man-made (piracy).

The Phillips Channel in the Singapore Strait is just 2.7km wide making it another maritime zone of bottlenecks and potential oil spills (See Map 4). With so many vessels in the crowded Singapore Strait, there is often an increase of incidents [ICS, 2015].

From the Straits of Malacca and Singapore, ships make their way to the South China Sea, another crucial shipping lane and a region subject to contention since oil and natural gas resources are present, also known as a zone of unstable waters in the South – East of the Indian ocean (See Map 5).

The South China Sea is a prominent shipping passage with 5.3 trillion USD (nearly one-third of all global maritime trade) worth of trade cruising through its waters every year [Gao & Lu, 2019]. Since this zone has emerged as one of the most dangerous flashpoints in the Indo – Pacific over the last decade, the transhipment here is rather unsafe, not to mention the ecological disasters which are emerging currently there.

Shipping lines using the canal will need to consider the benefits of lower transit times versus the canal tolls. The canal would mainly benefit Thailand, Burma, Cambodia, and Vietnam as they would see more significant shipping time and cost reductions for their maritime trade. China is pursuing this project for commercial and strategic reasons since it will give it an additional alternative to using the Strait of Malacca [Yuan et.al., 2019].

The Cook Strait is located between the two main islands that comprise New Zealand, the Cook Straight is a very useful, albeit dangerous shipping lane. The danger arises from the unpredictable waters, yet the benefits of trading between the islands are simply too big to ignore [CFC, 2021]. The Strait of Bab-El-Mandeb, one of the World’s Most Dangerous Straits (situated in the high conflict zone between Yemen and Somalia), is also the shortest trade route between the Mediterranean region, the Indian Ocean, and the rest of East Asia [Aljamra, 2019].

Oil-rich Arabian Gulf nations rely heavily on it: approximately 57 giant oil vessels from these countries pass through the strait each day, over 21.000 each year (See Map 7) [Reuters, 2019]. This fact makes the straight not only the zone of interests of main powers (and hence high tension in the region) but a big threat to the environment (oil spills).

As one of the busiest shipping lanes in the world, is also one of the most essential ones, due to the number of oil tankers that navigate these waters daily [IMO, 2014].

Around one-third of the world’s oil is transported through this strait, making it essential not only for trade but for the global economy. The same fact is making this route one of the most dangerous to the environment, considering existent oil spills or collisions [Einemo, 2015].

The Suez Canal (Including Gubal Strait) provides the shortest route between the Atlantic and Indian oceans (saves 7.000 Km of extra travel) (See Map 7).

The Suez Canal is an artificial waterway of about 190 km in length running across the Isthmus of Suez in northeastern Egypt, connecting the Mediterranean Sea with the Gulf of Suez, an arm of the Red Sea. The Suez Canal has no locks because the Mediterranean Sea and the Gulf of Suez have roughly the same water level, making Suez the world’s longest canal without locks. It acts as a shortcut for ships between European and American ports and ports located in southern Asia, eastern Africa, and Oceania [PEMP, n.d].

The 120-mile pass – the shortest waterway between the Indian Ocean and the Mediterranean Sea of the Atlantic Ocean. The canal allows water transport to pass in both directions between Europe and Asia without skirting Africa [CFC, 2021].

More than 100 boats travel the canal daily and 3.9 million oil barrels travel daily [TME, 2021]. Thus Around 8% of global sea-borne trade takes place through it. Despite the projects of Canal’s extension, its waters are still congested, making the users less safe, extending the time, and raising the costs of transhipments [EPC, 2015].

In recent years, services to the North American East Coast from Asia and transiting through the Suez Canal have increased to account for more than 15% of the traffic it handles. The canal area has also become a major transhipment cluster [PEMP, n.d].

Despite this, the growing ship size transiting the canal can involve risks, such as the grounding of a 20.000 TEU containership in 2021, which blocked the canal for six days, causing global disruption, when the Ever-Given ULCV became wedged and vessels were not able to pass through one of the world’s key shipping transit zones [PN, 2021] (See Figure 3).

After its discovery by the Portuguese in 1488, the cape took the name Good Hope because it offered a maritime passage towards India and Asia, thus the hope of a fortune for those who traversed it. Vasco de Gama got around the cape in 1497 and was the first European to reach India by sea [PEMP, n.d].

Afterwards, the Cape of Good Hope became an important point of transit in Europe – Asia trade networks, including a coaling station when steamship technology was developed in the 19th century.

In March – April 2021 multiple container ships are rerouting to the Cape of Good Hope to avoid the logjam created by the Ever Given blocking the Suez Canal [PN, 2021] (See Map 8).

Considering that the trip from the Persian Gulf to Port of Rotterdam takes nearly 18 days via the Suez and more than 31 days via the Cape of Good Hope for a ship travelling at 15 knots [Essallany et.al.,2019], the alternative made it possible to save cargos from being stuck in the waters of Red sea, but also greatly impacted trade turnover between countries (See Map 8).

The Bosporus and Dardanelles Straits separate the Sea of Marmara from the Aegean and Black Seas (See Map 10). Both straights are on the Europe – Asia boundary and lie within Turkey.

The Bosporus is located on the northern edge of the Maramara and southwestern edge of the Black sea. Turkish Straits provide the only access between the Black Sea and the Aegean Sea. The Dardanelles, on the southern tip of the Marmara and northeastern coast of the Aegean Sea (which is connected to the Mediterranean), is wider than its northern counterpart [AP, 2011].

Both Straits between Europe and Asia Minor, connecting the Black Sea with the Strait of Marmara, form a significant route between Europe and Asia, along which oil is transported, as well as commercial and military trade [CFC, 2021].

More than 40.000 vessels are passing through these waters per year, transporting almost 650 million tons of cargo [Ergocun, 2020]. Located in the area of the conflict of the power’s interests, this zone has been always considered vulnerable in terms of safety, not to mention significant damage of local maritime bio life.

The Oresund Strait is a passage of 115 km between Denmark and Sweden connecting the North Sea and the Baltic. Currently, it is a maritime dead-end, which has possible options to be further merged with the Northern Sea Route (after completion of Arctic railway). It enables Russia, the Baltic States, Poland, and Germany to access international maritime shipping. The majority of Russian container trade transit through the strait [Ducruet, 2016].The Danish Straits are a system of straits between the Scandinavian and Jutland Peninsulas. It includes the straits of the Small Belt (the smallest width is 0.5 km), the Big Belt (3.7 km), the Ehresund (10.5 km), Kattegat (60 km) and Skagerrak (110 km).) [PEMP, n.d] (See Map 11).

It is a shipping channel connecting the Gulf of Panama of the Pacific Ocean with the Caribbean Sea and the Atlantic Ocean, located on the Isthmus of Panama on the territory of the State of Panama. The Panama Canal has an invaluable impact on the development of shipping and the economy in the Western Hemisphere and around the world [IntlReg, 2021a]. The geographical position has led to its extremely high geopolitical importance.

It currently allows ships carrying 14.000 TEUs or less to pass [MW, 2020]. It is estimated that more than 14.000 ships pass through the canal each year. Despite the numerous projects to widen to double the capacity by adding a new lane of traffic, the waters of the Canal are still dangerously congested, influencing not only the cost and time of transhipment but also damaging bio-systems [FAO, 2014].

With the construction of the Panama Canal in 1916 and later on the setting up of the North American transcontinental bridge in the 1980s, this passage lost most of its strategic importance, a marginalization reinforced by limited economic activity at the southern tip of South America [PEMP, n.d].

The Strait of Florida is serving as the main connection between the United States and all points to the south and west, the Strait of Florida is very busy. This shipping lane allows ships to pass from the Atlantic Ocean into the Gulf of Mexico, thus catering to the Caribbean and Central America.

The St. Lawrence River is a major waterway in North America, flowing through the United States and Canada and connecting the Great Lakes with the Atlantic Ocean. At the mouth, the width of the river reaches 130 kilometres. The length of the river is 1.197 km, the basin area is 1.344.200 km2 [Ducruet, 2016] (See Map 13).

Among more than 150 ports along the entire length of the waterway from the Atlantic Ocean to Lake Superior, such as Quebec, Montreal, Toronto, Hamilton, Sault Ste-Marie, Buffalo, Erie, Cleveland, Detroit, Chicago, and Duluth Superior [PEMP, n.d].

Ships from various parts of the world annually deliver millions of tons of cargo along the St. Lawrence River. The use of this river system creates tens of thousands of jobs and generates billions of dollars in revenue annually.

Thus, it can be traced that the current sea arteries of warm waters are not just seriously congested (See Map 14), but also dangerous not only for the ecology and because of security reasons (robbery, piracy etc) (See Figure 4), but also for the stable development of trade and economy. The consequences of these dangers may be fatal in a few years unless the measurements of improving the maritime transhipment infrastructure are not taken.

The Strategic North 

• the Northwest Passage, connecting the American Continent and Far East Asia;
• the Northern Sea Route, offering a shorter way from Europe to Asia along the Russian Arctic coastline; and
• the Arctic Bridge, connecting Canada and Russia (See Map 15) [Bajrektarevic, 2010].

Also, the traditional route by the Suez Canal loses to the route around the Cape of Good Hope, around Africa. By now, it has become clear that there are no practical reasons to talk about the competition of the Northern Sea Route with the Suez Canal in terms of the volume of cargo transported (due to limited usage of the NSR).

In general, by the end of 2019, about 18.600 ships passed through the Suez Canal, compared to 18.200 thousand units in 2018. Net tonnage reached 1.2 billion tons – an increase of 5.9%, the revenue of the administration amounted to 5.8 billion USD [Smotrytska, 2021b].

Among the advantage of Northern Seas transhipment lines, one should consider significantly lower risks of physical loss of cargo (due to the peculiarities of the climate of the Indian Ocean, through which the southern route passes).

Tropical storms of the Indian Ocean, which cause significant destruction, and sometimes sinking of cargo, lead to significant financial losses, and sometimes to the loss of a deal with the buyer. Such tropical cyclones occur during the typhoon season and last for more than six months: from May to November [Lu et al, 2014].

The climatic features of the southern route suspend the navigation of the canal for as long as 6 months, creating unsafe and in some cases unprofitable conditions for transport companies. There are no storms in the sea expanses of the Northern Sea Route almost all year round, this is facilitated by the ice cover, which restrains water fluctuations. Thus. the stormy conditions of transportation of the northern seas are incomparable with the destructive storms of the South.

Another advantage, which plays into the hands of the blue transhipment routes is the decrease of use of harmful to the environment material – cement. Building new land infrastructure (especially roads) requires cement, a material that contributes more than 6% of global carbon emissions [Tonchev, 2017]. Shifting the transportation mode to the sea, therefore, will reduce the amount of roads constructions on the land.

In addition to the time criterion, a cold water shipping line is beneficial in terms of capability. It is usually characterized [Liua&Kronbakb, 2010] as the shortest sea route between Europe and Asia, the safest (e.g., the problem of Somali pirates) and has no restrictions on the size of the ship, unlike the route through the Suez Canal.

Thus, the Arctic route will allow to delivery of cargo to Europe faster by sea, reducing the route by 20 – 30%, and hence being more environment friendly (by using less fuel and decreasing CO2 emission) and saving human resources [IntlReg, 2021d]. Nevertheless, capitalizing on that opportunity requires much work in terms of improved navigation procedure and installation of safety-related infrastructure (See Figure 5).

But the shortening of the transhipment routes and hence slight decreasing of CO2 emissions will not solve the problem completely. The global environmental issue of CO2 consumption should be treated starting from the main root of the problem and in regards to it, the Arctic may play the key role [GovC, n.d.].The region covered by new transhipment routes (esp. South-Eastern Europe, Eurasia and South-Eastern Asia covered by Eurasian transhipment lines) has significant potential to be powered by solar energy.

Thus, it is estimated that less than 4%of the maximum solar potential of the region could meet the countries’ electricity demand for 2030 which gives the world a possible solution to reduce the countries’ need for fossil fuels as they develop [Smotrytska,2021a].

Only in Europe, due to the implementation of renewable energy projects (e.g., Francisco Pizarro plant in Spain, Nikopol Solar Power Plant, Ukraine, Cestas Solar Farm in Bordeaux, France etc), the solar capacity increased by 36% to 8 GW in 2018 [EC, 2020]. By 2020, several member states in the European Union pushed to meet their 2020 renewable energy targets.

Along with solar projects, wind onshore wind farms projects (e.g., the southeast region of Ukraine, the Fantanele – Cogealac wind park, Romania etc.) are also destined to meet increased national energy needs in the wake of phasing out fossil fuel power plants. Thus, the renewable energy potential and cooperation opportunities is a chance for the countries to leapfrog from their carbon-intensive trajectories to low-carbon futures.

The projects launched in the Arctic (e.g., project Yamal LNG) meets the goal of reducing the share of coal in total energy consumption in the world’s largest greenhouse gas emitters below 58% by the end of 2020 [ICIS, 2017], as this project allows to diversify countries’ energy sources, contributing to its withdrawal from coal use. This, in turn, reduces CO2 emissions within the country and may contribute to the implementation of the same scheme in the framework of the building of the transhipment routes [UNEP, 2011].

The goal to reduce dependence on coal and fossil fuels requires a huge surge in the use of natural gas, and the adoption of renewable energy [IRENA, 2015]. Is resulting in not only infrastructure constrictions but also the development of the projects connected with energy (See Figure 6).

One of the key factors driving the implementation of this project is that, unlike traditional fossil fuels, renewable energy sources are widely available around the world [OGV, n.d.]. Whether it is solar or wind power, tidal energy or hydroelectric plants, most countries have the potential to develop some clean energy.

But in order to use the energy potential of the Arctic, the countries of the region are making additional efforts to develop the main transhipment routes of the North, and one of them – the Northern Sea Route – has great prospects.

The Northern Sea Route is the shortest sea route between the European part of Russia and the Far East; it passes through the seas of the Arctic Ocean (Barents, Kara, Laptev, East Siberian, Chukchi) and partly the Pacific Ocean (Bering) (See Map 16).

The length of the route from St. Petersburg to Vladivostok via the NSR is only 14.000 km, while on the more popular route through the Suez Canal it is more than 23.000 km. Also, this route is advantageous in terms of delivery time and route length for many countries of the East Asian region to the countries of Western and Northern Europe.

For example, the distance from the port of Rotterdam in Europe to the port of Yokohama in Japan via the Suez Canal exceeds 11.100 nautical miles, while the length of the route along the Northern Sea Route is only 7.000 nautical miles, that is, more than 37% shorter. The Northern Sea Route is also beneficial to other ports, for example, the route from Hong Kong, Shanghai, and Busan (South Korea) to Rotterdam is shorter by 11%, 24% and 29%, respectively [Kiiski, 2017] (See Map 17).

The Northern Sea Route serves the ports of the Arctic and major rivers of Siberia (import of fuel, equipment, food; export of forests, natural resources).

Now, this sea trade route is not too busy, however, according to experts, it is very promising, and in the future, it will become one of the most popular in the world [Jiang et. Al, 2018].

The only serious obstacle hindering the development of the Northern Sea Route for maritime transportation is difficult climatic and ice conditions since most of the NSR passes through zones of thick long-term ice.

Nevertheless, as a result of global warming and, as a consequence, the massive melting of the Arctic ice, the Northern Sea Route opens up new opportunities for navigation along the northern shores of Eurasia. An example of this is the Chinese cargo ship Yong Sheng of Cosco Group, which left the port of Dalian for Rotterdam on August 8, 2013 [RT,2013].

It arrived at the Dutch port on September 10, delivering about 19.000 tons of metal products. The ship completed the entire route in 34 days. For comparison, the journey through the Suez Canal takes an average of 48 days. Thus, Yongsheng became the first Chinese cargo ship to make a commercial trip along the Arctic route [CFC, 2021].

It should be noted that the main prospects for the development of the NSR are related to the implementation of the Decree of the President of the Russian Federation dated 07.05.2018 No. 204 “On national goals and strategic objectives of the development of the Russian Federation for the period up to 2024” [MTRF, 2019].Already in 2020, the Russian authorities were intended to increase the volume of cargo transportation along the NSR to 40 – 43 million tons of cargo. According to the decree of President V. Putin, in 2024, the level of transportation should reach 80 million tons. Under favourable circumstances, by 2030 the size should exceed 100 million and amount to about 120 million tons. The growth is planned to be ensured by the beginning of the supply of Taimyr coal to India. After 2030, there are several plans to significantly increase the volume of international transit traffic through the Northern Sea Route [MTRF, 2019].

Though conditions are better along the NSR than elsewhere in the Arctic, major improvements are still needed in support of navigation as well as better communication considering increasing trans-Arctic traffic on the NSR.

Thus, the NSR will be most effectively used together with a network of high-speed railways connecting the east and west of the country and providing access to the deep regions of Russia to the ports of the Arctic and Pacific Oceans (See Map 18). The NSR and the supporting frame of railways are also important for strengthening the transport connectivity of the continents.

In the American part of the Arctic region, the construction of the northern components of fixed transportation link in Alaska and Canada opens up development programs with massive international implications, linking the United States with East Asia in the creation of a high-technology, fusion- and fission-powered backbone for a new world economy.

The proposed Alaska – Alberta (A2A) rail corridor will connect the US state of Alaska with Alberta, Canada [Railway Technology, 2020]. The route will link the deep-water ports and the existing railway network of Alaska to the Canadian railway system

Apart from this, considering the current development of logistics routes in Eurasia, the issue of building the Eurasia – America transport corridor via the Bering Strait, which is the missing link in the global transport system, is of crucial importance for the further development of the world economy in the context of globalization.

Thus, the development of a new logistics hub of the world’s transcontinental routes will contribute to a significant increase in the economic well-being of the regions of the Far East, Eurasia, and North America, which will receive additional infrastructure and economic development (See Map 19). In addition, with the help of the new road network, the development and trade of minerals from the Far East to other regions of the world will be simplified.

• The “HH Tunnel” between Denmark and Sweden;
• The Arctic railway line with the “Arctic Link” to China via NSR to Northern Europe;
• The Arctic Railway to boost railway connectivity North Europe;
• The Pol-Corridor fixed link;
• The International North-South Transport Corridor (hereinafter INSTC) from Finland to Norway and further South;
• The Helsinki – Tallinn undersea tunnel between Finland and Estonia;
• The Nordic Logistic Corridor (NLC);
• Baltic Sea Bridge within Kvarken Multimodal Link between Sweden and Finland;
• The Rail Baltica railway project to enhance railway links between the Baltic States and Central Europe

Towards Conclusions

• Transcontinental railroad system (which requires a huge number of investments);
• Optimization of the cheapest mode of transportation (maritime warm waters transhipment lines).

• Northern Sea Route (NSR) along the coast of Russia, 
• North-West Passage (NWP) off the coast of Canada, as well as through 
• a high–latitude near-polar route in the centre of the Arctic Ocean – Trans-Arctic Sea route (TSR), 
• Arctic Sea Bridge (ASB) – between the ports of Murmansk (Russia) and Churchill (Canada).

• significant fuel savings;
• reduction of transportation time;
• reduction of personnel labour costs and reduction of ship freight;
• no payment for the passage of the vessel, unlike the Suez Canal (at the moment);
• low route congestion and no queues;
• no pirates; alternative solutions to the problem of energy resources and stable supply [AB, n.d.].