ANALYSIS – Russia seeks to create alternative to Suez Canal via Northern Sea Route

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MOSCOW

The nearly one-week blockage of the Suez Canal last month by a giant 250,000-ton container ship once again raised the issue of the search for an alternative route for world shipping.

After the Dutch-bound Ever Given got stuck due to a sandstorm while passing through the canal on March 24, it took six days to refloat it.
Getting traffic back to normal is expected to take about several more days for the ships stuck in the canal to be cleared and due to the vessels waiting their turn for passage.

While Egypt earns about $5-6 billion in income a year from the canal, it has been stated that the daily damage of the Ever Given to global trade was around $10 billion.

The fact that delayed product deliveries also caused increases in world oil and liquefied natural gas (LNG) prices instigated the search for an alternative to the canal, which has been going on for a while.

Israel-UAE alternative canal plan

A canal planned to connect Israel’s Red Sea port of Eilat to the Mediterranean now stands out as the latest of these pursuits. The project, worked on by Israel and the United Arab Emirates (UAE), emerged last year and drew much pushback from Egypt.

Though not utopian, the Israeli-UAE project is estimated to be extremely costly to implement. According to experts, digging canals along the approximately 250-kilometer (155 miles) eastern end of the Sinai peninsula by cutting through hills hundreds of meters high will take an investment of over $100 billion at best.

The Suez Canal is 100 kilometers (62 miles) shorter than this route and heights rarely reach 100 meters (328 feet).

Egypt can build a new canal parallel to the Suez Canal or expand the existing one at a third of the Israeli-UAE project cost. Even if Israel and the UAE insist on their own project, it seems unlikely that they will break the opposition of Egypt, which can be expected to come up with a more competitive solution pre-emptively.

While an estimated 12% of world maritime trade passes through the Suez Canal and although this proportion cannot be ignored, the route is not indispensable.

When Britain, France, and Israel occupied the canal in 1956, passages halted for a while, but trade continued. When Israel occupied the canal in the 1967 Arab-Israeli war, passage stopped again and this situation lasted for eight years.

The most important reason for this expendability is that merchant ships going from Asia to Europe have the alternative to sail around Africa’s southern tip. Although this route costs more fuel and time, it does not cause a crisis in world trade.

Development of alternative transportation routes such as highways, railways, and pipelines also contributes to this situation, with the Kirkuk-Yumurtalik Oil Pipeline, built in the 1970s, standing out as a good example.

Turkey’s rising importance in railways

Turkey also occupies an increasingly important position in terms of railway alternatives. This importance is seen as sure to become more tangible once the Istanbul-London-Beijing Railway Line, put into service last year, is integrated into China’s Belt and Road system.

Though the Trans-Siberian Railway, located further north, stands out as an alternative, it is an inadequate route to carry trade goods from East Asia, especially China.

Railways are critical for inland passenger and freight transport, but this importance is limited within continents. In intercontinental transport, it is not possible to exceed the price advantage of sea transportation. The only way to be cheaper than sea transport is via pipelines, but only liquids and gasses can be carried through these.

Warming Arctic Ocean

On the other hand, numerous scientific studies and expeditions have been conducted in past centuries to secure an overseas route from the Atlantic to the Pacific along both the Canadian and Siberian coasts. When these proved fruitless, the US significantly reduced its need for a northern passage by opening the Panama Canal at the beginning of the last century.

Russia had no such luck. For Russia, the Northern Sea Route is essential, not only economically but also militarily and strategically.

Russia, which paid a heavy price not being able to use the Northern Sea route in the Russo-Japanese war of 1905, solved this problem, at least militarily, by having by far the largest icebreaker fleet in the world. While, however, the commercially expensive icebreaker ships do not offer a competitive solution, global warming came to Russia’s aid on this issue.

The noticeable thinning of the ice sheet covering the Arctic Ocean in recent years has reduced the need for icebreakers. In addition, merchant ships were equipped with ice-breaking capabilities, enabling them to make their voyages over the Northern Sea Route by themselves.

A Russian ship transporting LNG from Yamal, one of Russia’s largest natural gas fields, on the North Sea coast to China, made its return journey on Jan. 27-Feb. 19, 2020, in the middle of winter and without the need for icebreaker assistance.

The Northern Sea Route is no longer a dangerous and impassable sea as it was in previous centuries, and countries and global companies involved in maritime transport started using this course at increasing rates every year.

In 2018, Russian President Vladimir Putin ordered the annual average cargo volume over the Northern Sea Route to be increased from 30 million tons to 80 million tons by 2024.

China, one of the first countries to try this route for commercial purposes, has been sending an increasing number of ships to Europe via the Northern Sea Route since 2013. While this number was 12 in 2017, it reached the same number in January-August 2018.

It can be seen as interconnected moves for China that it became an observer member of the Arctic Council in 2013 and started implementing its One Belt-One Road Initiative in the same year.

A container ship from Tokyo to Hamburg must sail for about 48 days via the Suez Canal, while the same ship has to go about 35 days via the North Sea Road.

Growing interest from Western firms

With China’s increasing mobility, Russia is no longer alone in efforts to make the Northern Sea Route active. One Belt-One Road does not solve the problem of China’s distance from European markets. Similar to Russia’s centuries-long quest to reach warm waters for centuries, China had also been searching for faster ways to reach the European market.

Russia and China seem to have found what they were looking for in the Northern Sea Route and will continue to work on this path.
Russian leader Putin in his speech at the Second Belt and Road Forum for International Cooperation held in Beijing on April 25, 2019, summed up Russia’s attempts in two sentences:

“We attach great importance to the development of the Northern Sea Route. We are evaluating the possibility of joining this with China’s Silk Road so that we will create a global and competitive route connecting East Asia to Europe.”

The passageway is as important for China as it is for Japan and South Korea, two of the leading industrial nations of the East. Both countries are increasingly using the northern route.

Though Western shipping companies are hesitant on this, the world’s largest container shipping firm, the Danish company Maersk, started using this route three years ago as the northern passageway is no longer an obstacle for maritime transporters and has become increasingly attractive.

Experts predict that the Northern Sea Route will be ready to be used at full capacity in around 2030. The Suez Canal will remain important for maritime transport, especially between the Mediterranean basin, including Turkey and South and Southeast Asia. However, the number of ships using the northern pass is expected to rise through this process led by Russia and China.

*Translated from Turkish by Aysenur Albayrak

*Opinions expressed in this article are the author’s own and do not necessarily reflect the editorial policy of Anadolu Agency.

Russia floats Northern Sea Route as Suez Canal alternative

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