Zhang and Meng 1

CURRENT SHIP TRAFFIC ANALYSIS AT NORTHERN SEA ROUTE 1 2 3 4

Yiru Zhang 5 Research Assistant & Master Student 6

Department of Industrial and Systems Engineering & Centre for Maritime Studies 7 National University of Singapore, Singapore 118414 8

Tel: (+65) 6516 5492 9 Fax: (+65) 6779 1635 10

E-mail: cmszy@nus.edu.sg 11 12

Qiang Meng 13 Associate Professor 14

Department of Civil and Environmental Engineering 15 National University of Singapore, Singapore 117576 16

Tel: (+65) 6516 5494 17 Fax: (+65) 6779 1635 18

E-mail: ceemq@nus.edu.sg 19 20 21

To the Committee of Marine Safety and Human Factor (AW040) for re-review 22 23

Revised Paper submitted to the 95thAnnual Meeting of Transportation Research Board to be considered 24 for presentation and publication in Transportation Research Record 25

26 Submission Date: 1 November, 2015 27

28 Total Number of Words Number of words in text = 6,175 Number of tables: 3 (3×250) = 750 words equivalent Number of figures: 2 (2×250) = 500 words equivalent --------------------------------- Total number of words: = 7,425 29 Corresponding author: Qiang Meng 30 31

Zhang and Meng 2

ABSTRACT 1 While the media vigorously propagates historic Northern Sea Route (NSR) transits and 2 researchers demonstrate viability of the NSR, the current usage by the shipping industry has been 3 neglected thus far. This study aims to analyze the current ship traffic characteristics at NSR. The 4 ship traffic data provided by Russia and the port call data obtained through a commercial 5 provider are examined. Transit shipping along the NSR was performed by 2, 4, 41, 46, 71 and 53 6 ships respectively in 2009-2014 in the summers. Trade volumes remained unstable over the years. 7 The results show that navigation season lasts for 5 months at NSR, and ice classes of Arc4 and 8 Arc5 are used extensively. Despite Arctic nations, China, South Korea and Japan are active 9 participants in the transit activities. Thus far, oil-and-gas transportation dominates the transits 10 and most activities are destinational or domestic. However, without actual trajectories of 11 activities, it remains difficult to determine the vessel speed on the NSR. The paper provides real 12 statistics that can add value to the viability analysis. It identifies key players of the transits, 13 exhibits trade pattern at NSR, and presents facts that interest shipping companies. 14 15 16 17 Keywords: Ship Traffic Analysis, Northern Sea Route, Trade Pattern 18

Zhang and Meng 3

INTRODUCTION 1 The continuous retreat of Arctic sea ice in the past decades has attracted wide attentions from various 2 stakeholders. The transarctic shipping routes are said to provide much shorter alternatives between 3 Europe and Asia compared to the conventional routes via the Suez/Panama (1). The NSR, in particular, is 4 in the spotlight, because it has the most favorable ice conditions among all transarctic routes (2; 3). It is 5 defined as a set of marine routes from Kara Gate in the west to the Bering Strait in the east (2). The 6 Secretary General Gorbachov declared the NSR open as an international shipping route in 1987, and the 7 route was officially opened on January 1, 1991 (4). The opening was followed by the launch of the 8 International Northern Sea Route Programme (INSROP) between 1993 and 1999, which was the first-9 ever full scale international research programme aiming to create an extensive knowledge base about the 10 NSR. Various aspects, including natural conditions, ice navigation, trade and commercial shipping, and 11 political and legal factors, were accessed (5). INSROP demonstrated the technical possibility of the NSR 12 as an international commercial sea lane and provided sensible suggestions for further improvement (6). 13

Numerous studies on the Arctic shipping issues seem to have sprung up in the past 15 years, and 14 they had their own exclusive objectives and focuses. The Arctic Marine Shipping Assessment (AMSA) 15 analyzed the current state and the future of Arctic marine use in 2020-2050 (2). A number of studies 16 examined transportation feasibility of the NSR, highlighting both advantages and challenges (7-10). Some 17 researchers investigated the cost competitiveness of the NSR relative to conventional shipping routes (11-18 14). A recent trend has been to incorporate the views of ship owners to complement the pure academic 19 research works (1; 15). Thus far, the feasibility study of the NSR has been well-rounded. 20

Based on INSROP and AMSA’s suggestions, the Russian government has taken several measures. 21 Safety and communication along the NSR has been improved by building ten new bases for search, 22 rescue and communication (16). After many-year wait, a legal and administrative base for the NSR was 23 created: the Federal Law of Shipping on the Water Area of the Northern Sea Route has been in force since 24 27th January 2013; and the federal state institution, Administration of the Northern Sea Route (NSRA), 25 was established in March 2013 (17). Administrative procedures have been improved and escort fees have 26 become competitive, but are not transparent (4). Since the opening of the NSR, Russia has encouraged 27 international use of the route, unsuccessfully in the 1990s but more successfully since 2009 (4). The first 28 two international commercial cargo vessels, Beluga Fraternity and Beluga Foresight, travelled through the 29 NSR in 2009 (18). Since then, transit shipping was performed by 4, 41, 46, 71 and 53 ships respectively 30 in 2010-2014 in the summers (19; 20). 31

The initial premise of this study stems from two observations. First, the feasibility studies on the 32 NSR are comprehensively developed: a wide range of research aspects are considered; both advantages 33 and challenges are listed; and shipping sector’s perception is also accessed. Second, as a corollary of the 34 first observation, there is a lack of analysis of the real shipping traffic data, namely, we do not know what 35 exactly is happening at NSR. Many studies, indeed, have mentioned those historic shipping events (20; 36 21) and the fact of increasing NSR transits in the past few years (15; 21). However, few of them looked 37 into the details of these transits and conducted ship traffic analysis to identify interesting results. To the 38 best of our knowledge, only three studies have analyzed NSRA’s transit records: Marchenko (17) and 39 Humpert (22) studied various shipping characteristics in 2013, including cargo volume and type, flag and 40 ice class of vessels, and average transit speed; Moe (4) compared number of transits, cargo volumes, 41 cargo types, origins and destinations (OD) in 2011-2013. 42

This paper aims to conduct a comprehensive ship traffic analysis for the transits along the NSR. 43 The datasets include transit records from the NSRA and port call information from a commercial 44 maritime information provider. The contribution of this study is as follows. It helps to fill in the gap 45 between academic viability studies and practical shipping operation by demonstrating the actual ship 46 traffic at NSR. The real statistics can add value to the viability analysis by identifying key players and 47 exhibiting trade pattern at NSR. Also, maritime sectors can benefit from findings of this study: the time 48 window of the route, existing cargo flow and potential trade opportunities. 49

Zhang and Meng 4

DATA SOURCES 1 We collect relevant data from two sources. One set of data is the transit records at NSR in 2011-2014. 2 The information is reported by the NSRA annually. We call the datasets, transit data 2011-2014, in the 3 rest of the paper. Another set of data is purchased from the maritime information provider, IHS Maritime 4 & Trade, which gathers worldwide port calls that exhibit vessel movements for years 2013 and 2014. The 5 port call data collection is supported by Automatic Identification System (AIS) and the company’s 6 branches at various ports. This set of data is called port call data in the rest of the paper. 7

The transit data is maintained by the NSRA, and open to all. It concerns only the transit 8 information along the NSR, and reports factors of interest, such as name of vessel, flag and type of ship, 9 entry to NSR, and exit from NSR. On the other hand, port call data is commercial and involves worldwide 10 port call information. It reports arrival date, sail date, ship name, ship type, port of call and etc. 11 12 DATA ANALYSIS 13 14 Transit Data 15 There are 41 records in 2011, 46 records in 2012, 71 records in 2013 and 53 records in 2014. Just 16 regarding the record number, we observe an increase from 2011 to 2013, and a decrease from 2013 to 17 2014. As pointed out by Moe (4), ‘transits’ as understood by the NSRA include all sailings that traverse 18 the most challenging part of the NSR, along the coast of East Siberia. Thus, voyages from Ob Bay and 19 eastwards are included, and so are journeys from the west to Pevek in the Far East, even if they do not sail 20 the full length of the NSR. The origin and/or destination may well be Russian ports. Thus, transit is not 21 the same as international transit. 22

The information fields in transit data reported for respective years are listed below: 23 • 2011: vessel’s name, type, flag, cargo, port of loading and port of destination. 24 • 2012: vessel and flag, ice class, ship owner/operator, cargo, destination, port and date of sail, entry to 25

NSR, exit from NSR, time on NSR, and average speed. 26 • 2013: vessel and flag, ice class, GRT (gross register tonnage), vessel owner/operator, cargo, port of 27

destination, port and date of departure, entry to NSR, exit from NSR, days spent at NSR, and average 28 speed. 29

• 2014: name of vessel, flag, type, GRT, date and place of entering the NSR water area, date and place 30 of leaving the NSR water area, and days spent at NSR. 31

32 Flag and OD for Activities 33 In 2011, there was a leading proportion of Russian-flag vessels, followed by Singapore. It became more 34 disperse in 2012, with active participations of Panama, Finland and Norway registered vessels. In 2013, 35 we observe the most diversified flags of 12 in total. However, in 2014, the situation became so extreme 36 that only 5 vessels were foreign registered vessels. It seems that parties interested in the NSR may remain 37 in the waiting or investigating stage. According to the US, western sanction on Russia may be the main 38 reason for the decline in foreign shipments on the NSR in 2014. Despite Russian flag, Panama flag was 39 constantly observed in 2011-2014. 40 TABLE 1 Transits by Flag 41 2011 2012 2013 2014Antigua and Barbuda 0 0 1 0 Bahamas 1 0 0 1 Bermuda 0 0 1 0 China 0 2 0 0 Curacao 0 0 0 1 Cyprus 0 1 2 0 Finland 2 6 2 0 Germany 1 0 0 0

Zhang and Meng 5

Greece 0 0 2 0 Hong Kong 0 0 1 0 Liberia 2 1 5 0 Malta 0 0 1 0 Marshall Island 1 3 2 0 Norway 2 5 2 0 Panama 1 10 6 1 Russia 26 17 46 47 Singapore 4 0 0 0 Spain 1 0 0 0 Sweden 0 0 0 3 1

However, ship flag does not indicate the exact countries involved in an activity. In 2011-2013, 2 port of destination and departure were reported, and we can have a clearer picture about the countries 3 involved. We note that destinational and domestic shipping still takes up the main business along the NSR. 4 However, international transit is associated with the greatest rate of increase from 2011 to 2013. For 5 foreign origin or destination (O/D), China, South Korea, Norway and Netherlands’ ports appeared often, 6 demonstrating their interest in exploiting new opportunities at NSR. All Arctic nations, except for 7 Sweden, have been involved in the transits. For Asian countries, Japan has an increasing number of 8 transits over the period, and Singapore, Malaysia, Thailand, Vietnam and North Korea all have once 9 attempted to utilize the route for transportation. 10 TABLE 2 Transit Outlook by Transit Type and OD Pairs 11

Year 2011 2012 2013

Statistic measures

number of

transits (% of total

transits)

OD pairs listing number of

transits (% of total

transits)

OD pairs listing number of

transits (% of total

transits)

OD pairs listing

domestic shipping

9 (22.0%)

Russian local ODs (9)

19 (41.3%)

Russian local ODs (19)

42 (59.2%)

Russian local ODs (42)

international transit

2 (4.9%)

Norway-Thailand (1)

S. Korea - France (1)

10 (21.7%)

Finland - S. Korea (3)

Iceland - China (1) France - S. Korea

(1) Netherlands-China

(1) Germany - Canada

(1) Japan - Norway (1) Denmark - USA (2)

13 (18.3%)

Norway - Japan (2) Norway - USA (2) Vietnam - Poland

(1) Netherlands - S.

Korea (3) Denmark - S. Korea

(1) Norway - Taiwan

(1) Netherlands - China

(1) Finland - Canada

(1) USA - Denmark (1)

Zhang and Meng 6

destinational shipping

15 (36.6%)

Russia - China (10)

Russia - Thailand (1)

Russia - S. Korea (2)

Russia - Norway (2)

17 (37.0%)

Russia - China (9) Russia - Singapore

(1) Russia - S. Korea

(7)

15 (21.1%)

Russia - China (4) Russia - S. Korea

(4) Russia - N. Korea

(1) Russia - Iceland (1) Russia - Malaysia

(1) Russia - Norway (3) Russia - Japan (1)

Unspecified 15 not reported 0 - 1 not reported

TOTAL 41 (100%)

41 46 (100%)

46 71 (100%)

76

Remarks: • OD pairs listing lists those transits with foreign origin and/or destination. • The origin does not necessarily come first in the listing. • domestic shipping: both OD within Russian territory; • international transit: both OD in foreign countries; • destinational shipping : one in Russia, and one in foreign country.

1 Ship Size, Ship Type and Cargo 2 The GRT figures are only available for 2013 and 2014. The GRT for vessels ranges from 1,207 to 3 102,236 tons in 2013, which covers a wide range of ship sizes. It ranges from 1,895 to 41,071 tons in 4 2014, which does not have as large as those ships in 2013. 5

It is argued vigorously that what kind of cargoes could be transported through the NSR. This 6 piece of information is available in 2011-2013 (Figure 1a). In 2011, 15 transits contained ballast, and 9, 5, 7 4, 3 and 2 transported gas condensate, diesel oil, frozen fish, iron-ore concentrate and general cargo 8 respectively. And containers, copper and nickel and naphtha all had one transit in the year. In 2012, liquid 9 (25 times) started to dominate the list, followed by repositioning (7 times), bulk and ballast (6 times 10 respectively). The first-ever LNG transit took place in 2013, transported 66,342 tons of LNG from 11 Norway to Japan. In 2013, 31 vessels transported liquid, 4 transported bulks, 1 carried LNG, 1 transported 12 containers and 12 vessels transported general cargo. In the remaining, 15 vessels contained ballasting and 13 7 transits were for reposition. Remarkably, Yong Sheng of COSCO Group spent 35 days to sail via the 14 NSR, marked the first commercial voyage by the ice-class containership (23). 15

In transit data 2014, we do not have the cargo entries; only ship type was available. General cargo 16 (15 ships) and oil tanker (25 ships) definitely dominated the list. 17

Zhang and Meng 7

(a) Number of Transits by Cargo Type

(b) Trade Volume (in tons) by Cargo Type (Remark: * indicates that the volumes for that particular years are estimated.)FIGURE 1 Cargo Statistics 1

In all years, tankers played an active role in NSR transits as Russia is the world’s leading oil-and 2 -gas exporter. In 2011, there were four vessels taking frozen fish; there was just one in 2012 and none in 3 2013. The number of bulk transits is quite stable, falling within 4 to 6. Over the years, we observe an 4 increase in general cargo transits, from 2 in 2011 to 12 times in 2013. In contrast, few containerships have 5 traversed this “promising” route so far. The LNG transport has its first transit in 2012, and this is related 6 to the Yamal LNG project, which would use the NSR extensively all year round (4). Thus, an increase in 7 LNG transports is expected. 8

The number of transits carrying ballast or for repositioning is substantial in all years. Such 9 voyages are a natural part of ship movements. However, the high share of ships in ballast may be a cause 10

0

5

10

15

20

25

30

35

2011

2012

2013

0

100000

200000

300000

400000

500000

600000

700000

800000

900000

1000000

liquid bulk general cargo LNG

2011*

2012

2013

2014*

1 2 3 4 5 6 7 8 9

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

30 31 32 33 34

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Zhang and Meng 9

towards/comes from Asia need to pass D to exit/enter the NSR. P is next to the east entry, and O is near 1 the west entry. K is the official west bound of the NSR, and has a minimum depth of 21 meters. 2 Maximum fog and low visibility occur during July and August (3). Z represents a northern alternative to 3 K, and the route via Z is significantly longer than that via K. However, towards the north, the draft of the 4 water becomes deeper and allows larger vessels to pass through (25). Note that some straits along the 5 coast of the NSR are rather shallow that they deter the passing of medium or large-size vessels (26; 27). 6 We thus incorporate GRT information into the analysis. 7

From transit data 2013, ZD/DZ, is a popular choice, and the average GRT of vessels passed by 8 was more than 40,000 tons. This is significantly greater than other routes’ average GRTs, which are 9 normally 5,000 to 10,000 tons. Therefore, smaller vessels usually utilized the costal routes, while larger 10 vessels traversed through north of islands to avoid shallow straits. 11

In 2014, the gateways include D, Karskiye Vorota (KV), Z, P, Mys Shmidta (M) and Ostrov 12 Vrangelya (OV). ZD/DZ has an average GRT of around 20,000 tons, and a total number of 16 transits. 13 The rest of OD pairs on NSR have an average GRT around 10,000 tons. DKV/KVD has 12 transits, 14 followed by PZ/ZP (8), KVM/MKV (5) and KVP/PKV (5). 15

Naturally, we expect the days on NSR to be positively related to the distance between entry and 16 exit. This seems to be true in some extent; for instance, KD KPT T> (T represents average time in days, and 17

the subscript indicates the OD at NSR) and ZD ZPT T> in 2013; DKV DZT T< and PKV PZT T< in 2014. 18

However, some non-straightforward cases also exist; for example, in 2013, DO DK DZT T T> > , but 19

PK PO PZT T T> > ; and in 2014, KVD KVPT T> , but ZD ZPT T< . The observation, ZD ZPT T< in 2014, is rather 20 counter-intuitive, since distance between ZD is obviously longer than that of ZP. Transit time is heavily 21 influenced by ice conditions. Some transits through ZP may have encountered difficult ice conditions so 22 that vessels were beset or were forced to take detours. We may need actual shipping logs or AIS data to 23 figure out the underlying reason for these “illogical” findings. 24

Transit data 2012 and 2013 reported the average sailing speed. In 2012, we have a mean of 8.81 25 knots and a standard deviation of 5.05; in 2013, we have a mean of 10.72 knots and a standard deviation 26 of 2.09. It increases and becomes less variable. However, some issues are unclear with regard to this piece 27 of information. First, does it refer to the average speed on the NSR? Second, how was the speed 28 determined? Evidently, for the same OD pairs, when we compare the product of days spent at NSR and 29 average speed, large differences are displayed. Since average speed is a variable of interest, it is important 30 to confirm the reliability and accuracy of this recorded data. 31 32 Limitations of the Transit Data 33 In transit data 2013 and 2014, we were given the entry and exit points on the NSR. For 2013, we also 34 know the OD for transits. However, we are not given the information on transshipment, especially for the 35 leg on the NSR. Transshipments would add on to the time of transit, due to additional traveling time and 36 waiting time in ports. This piece of information should be considered in calculating the sailing speed on 37 the NSR. 38

Transit data 2013 provided the most detailed information. However, in the other years, especially 39 2011, little information was given so that we cannot conduct detailed analysis for the particular year or 40 make comparisons over time. 41

In addition, the above analysis is based on the assumption that records provided are complete and 42 correct. This may be examined by checking whether the transit data is in accordance with other datasets 43 that provide shipping records. Also, for a comprehensive traffic analysis, some other factors could be 44 included to complement the current records and give further interesting results. 45 46 Port Call Data 47 To complement the transit data, we acquire the port call data in 2013 and 2014 from IHS Maritime & 48 Trade, which contains worldwide port calls in the two years. 49

Zhang and Meng 10

General Statistics 1 There are 6,232,084 and 6,648,464 entries in 2013 and 2014 respectively. Each entry contains the 2 following information: IMO number, arrive date, call ID, date created, ETA (estimated time of arrival), 3 hours in port, sail date, ship name, ship type, country, destination, port, port ID, port latitude and port 4 longitude. There are 23 Russian ports with latitude greater than 63. Over the two-year period, there are 5 7,287 records for these 23 ports. This is a much greater number compared to 71 and 53 transit records in 6 2013 and 2014. 7

8 Port Calls for 71 Transit Records in 2013 9 We proceed to extract information of the 71 activities as recorded in transit data 2013 to examine whether 10 there is any complementary or variant data. The extraction is done as follows: for a particular transit 11 reported by the NSRA, we search according to the vessel name, and obtain a list of all port calls of that 12 vessel in the entire year. Then we narrow down to the period when the transit took place, and identify a 13 particular port call which is relevant to the transit, being origin, destination or stopover. From that port 14 call, we trace forward and/or backward to obtain all corresponding port calls for the specific transit. 15

For the 71 records in 2013, we are able to find 48 sets of port call data. Some ships, including PS-16 825, Kasla, Yuri Arshenevsky and HHL Hong Kong, did not have any port call record in 2013. Some 17 ships, on the other hand, had other records in 2013, but did not have records for some particular NSR 18 transits. The reason behind the missing record could hardly be confirmed. According to the data provider, 19 they have had a zone for both Pevek and Ulsan since/before April 2011 and for Mongstad since/before 20 August 2011. However, there may have been slight adjustments made to these zones subsequently (in 21 terms of Lat/Long amendments), so perhaps this is where the problem lies in case these ports were not 22 covered at the time. Moreover, some activities went beyond to river areas, which are outside the data 23 coverage. Another possibility may relate to the inherent deficiency in AIS at high latitude. Jensen (24) 24 pointed out that traditional instruments, including AIS, are not sufficient with regard to all potential vessel 25 movements within the Arctic. The development of Long Range Identification and Tracking is more 26 relevant. 27

In the 48 sets of port call, 34 sets have the same destinations as in transit data 2013; 8 sets have 28 slightly divergences in terms of destination (different port but same country of destination); and the rest 29 have missing port calls for destinations. Likewise, 26 sets have the same origins as the transit data; 5 sets 30 have slightly differed origins; the rest lack origin, i.e. the time leaving the port of departure. Therefore, 31 port call data have a number of incomplete entries here and there. 32

According to the NSRA, there are 16 Arctic ports along the NSR. Nonetheless, in 48 sets of port 33 call data, only some ports were visited by the ships. All transits that went through (either entry or exit) 34 Cape of Dezhnev had called Bering Strait (Russia). The subsequent Russian ports that were called most 35 regularly are Murmansk (12 times), Pevek (8 times), Petropavlovsk-Kamchatsky (6 times), Archangel (5 36 times), Nakhodka (4 times), Dikson (3 times) and Ust-Luga (3 times). Among them, Petropavlovsk-37 Kamchatsky, Nakhodka and Ust-Luga are non-Arctic ports. 38

In the 48 activities, only 4 transits had made a stopover along the NSR, 2 at Dikson and 2 at 39 Pevek. This might relate to the cargoes that were transported. Ship operators usually adopt the port-to-40 port model to transport general cargo and oil-and-gas products. 41

Hours in port indicates the time spent in ports. From two consecutive port calls, sailing time from 42 one port to the next can be calculated. In theory, the average sailing speed between ports can be obtained 43 if we can determine the distance between the ports. However, the entry and exit points at NSR are usually 44 capes or straits along the coast with no port nearby, for instance, Zhelaniya. As a result, no port call data 45 is available, except for the cases of Pevek and Dezhnev. Furthermore, due to harsh ice conditions, ships 46 are forced to use the channel that offers the best ice and navigation conditions at any one time and place 47 (3). The exact transit route for a particular activity, and thus distance travelled, is uncertain. Hence, 48 average speed on the NSR leg can hardly be estimated. 49

50

Zhang and Meng 11

Port Calls for 53 Transit Records in 2014 1 For the 53 records in 2014, we are able to find 48 sets of corresponding port call data. The rate of missing 2 data is much lower than that of 2013. The ships, Oden, Spasatel Zaborshikov and Yutiy Tarapurov, did 3 not have any transit record in 2014. The ship, Inzhener Veshnyakov, had other records in 2014, but did 4 not have any record from mid-July to early October. 5

Transit data 2014 did not mark down the ODs of transits. This creates difficulties when we trace 6 the complete shipping activities. We maintain the port calls that are around one month before the entry 7 date to NSR, and one month after the exit date from NSR. All transits that went through Cape of Dezhnev 8 had called Bering Strait. The Russian ports that were called most regularly are Bering Strait (30 times), 9 Pevek (15 times), Murmansk (14 times), Ekonomiya (8 times), Slavyanka (6 times), Providenija (5 times), 10 Archangel (5 times) and Petropavlovsk-Kamchatsky (4 times). In all 48 activities, 5 transits had made a 11 stopover along the NSR, all at Pevek. The significance of port Pevek at NSR is evident. 12

There are 3 sets of part calls that seem to disagree with transit data 2014. The details of the 13 discrepancies are summarized in Table 3. These discrepancies should be addressed properly. 14 TABLE 3 Details for Specific Transits 15 Ship name Transit data 2014 Port call data Hanseatic Entered NSR though c. Dezhnev on

02.08.14, and left NSR via c. Zhelania on 02.09.14

During 02.08.14 and 15.08.14, exited from NSR via Bering Strait and traveled to Providenija twice

Kapitan Khlebnikov

Entered NSR though Karskiye Vorota 03.08.14, and left NSR via c. Dezhnev on 20.10.14

Called port Murmansk (west to Karskiye Vorota) consecutively on 13.08.14 and 27.09.14

Igor Llinskiy Entered NSR though c. Dezhnev on 18.09.14, and left NSR via Karskiye Vorota on 29.09.14

Visited Bering Strait on 17.09.14, however, turned back and traveled eastward to China

16 Limitations of the Port Call Data 17 It is of our interest to determine the distance travelled along the NSR and derive the time spent on the way 18 based on port calls. However, the entry and exit points at NSR are usually capes or straits along the coast 19 with no port nearby. Thus, no corresponding port call is available. Hence, we could only rely on transit 20 data for time on the NSR. In addition, although we know the ports being visited along the way, we did not 21 know the exact route taken in between the ports, given uncertain ice conditions. It is good to have travel 22 trajectories for these transits to better estimate distance and thus speed. 23

Moreover, the discrepancies between transit data and port call data should be addressed with 24 great cautions. We may need to consult corresponding ship operators for confirmation. Another issue 25 puzzled us is that there are thousands of entries yearly that recorded port calls at various Russian Arctic 26 ports. However, these activities were not classified as NSR transits and thus were not included in transit 27 data. We wonder what the criteria are for a shipping activity to be counted towards a NSR transit. Overall, 28 the recordkeeping of transit data should be standardized, and the criteria should be disclosed. 29 30 DISCUSSIONS 31 The number of transits grew rapidly in 2009-2014 with an average rate of 92.6%. However, in terms of 32 absolute numbers, it is quite small compared to those of the Suez (18,000 transits/year) and Panama 33 (13,000 transits/year). The cargo volumes grew in 2011-2013, but dropped in 2014. Trade along NSR has 34 begun to take shape, but remained unstable and vulnerable. The navigation season at NSR lasts for around 35 5 months. During this time period, vessel class of Arc6 or above, can navigate the entire NSR 36 independently (28). However, the investment for such vessels is huge, thus few shipping companies 37 employ these vessels. Instead, Arc4 and Arc5 are used extensively. Arc5 is the minimum vessel ice 38 reinforcement to traverse the NSR with icebreaker support under any ice conditions, and it can traverse 39 independently under easy and moderate ice conditions. Arc4 can independently navigate in the NSR 40 water under easy ice conditions, and navigate with icebreaker support under easy and moderate ice 41

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conditions. The Arc4 and Arc5 vessels could navigate through the NSR only seasonally. They are not 1 allowed to navigate in the period November to December or January to June under moderate or severe ice 2 conditions. 3

The interest of some Asian countries, especially China, South Korea and Japan, is apparent. 4 China, as the world’s biggest energy consumer, is eager to purchase more energy from Russia. Except 5 two international transits each in 2012 and 2013, all the rest of the activities in 2011-2013 are 6 destinational. China imports gas condensate from Vitino and Ust-Luga and iron-ore concentrate from 7 Murmansk. South Korea involved in more international transits compared to China. There are 1, 4 and 4 8 international shipping activities respectively in 2011-2013. Remarkably, the first large-scale container 9 transportation by Yong Sheng in 2013 delivered 16,651 tons of general cargo from Busan to Rotterdam 10 (17). But this activity was carried out by COSCO, and is regarded as the Chinese expansion on the NSR. 11 Although Japan has the least number of overall transits among three countries, the proportion of 12 international transits is the greatest. And the first LNG transportation in 2012 is from Norway to Japan. 13 This may likely to grow in terms of transit number and trade volume under the Yamal LNG project. 14

Thus far, the transits were dominated by liquid. Russia itself has the largest known natural gas 15 reserves, along with the second largest coal reserves, and the eighth largest oil reserves. It provides a huge 16 amount of energy resources to both domestic and foreign markets. Fuel transport will remain to be the 17 base-load in NSR transits. Many organizations have expressed their concerns on the transport of oil-and-18 gas products at NSR. An oil spill could be devastating for vulnerable ecosystem and wildlife in the Arctic. 19 Therefore, stricter legislation should definitely be in force and an effective response system must be in 20 place. 21

Bulk shipping has a rather stable number of transits over the years, while general cargo transits 22 increase over time. These two transportations do not have strict timeline to follow, thus are able to bear 23 the great uncertainties in ice conditions and shipping time. In addition, the goods transported are usually 24 of low value and the profit margin is relatively low. As the result, cost saving is of great importance for 25 shipping companies to seize the gain. Thus, they are more active in exploring the new opportunities at 26 NSR. 27

On the other hand, few containerships have traversed the NSR so far. First, as indicated by the 28 port call data, few transits involve stopovers. Unlike traditional routes, transshipment demand is low on 29 the NSR and port-to-port container demand may not be able to cater the capacity of a ship. Second, ice 30 conditions remain challenging for containerships. One consideration of the shipping line is the reliability 31 of the transportation, and another is related to safety: containerships require high stability due to high 32 stacks of containers on the deck; a slight sway of the ship may result in loss of cargoes and/or danger of 33 shipwreck. An expansion in container shipping is unlikely in the near future. Nonetheless, we do see the 34 attempt by COSCO to transport containers along the NSR. Moreover, recently, there is breaking news 35 about new order of underwater vessels by Maersk. This ground-breaking technology offers a solution to 36 the container shipping industry to utilize the Arctic routes as alternatives to the traditional long-haul 37 trades. 38

We initially intend to access the sailing speed of NSR transits. However, there are some 39 difficulties in determining the speed. First, in transit data 2012 and 2013, the NSRA provided the statistics 40 on average speed. However, it is unclear that how the speed is determined. One possibility is that the 41 NSRA requires the ship master to report the speeds at the moments of entering and leaving the NSR; they 42 may take the mean of the two as the average speed. Another possibility may be that they obtain the 43 average speed from icebreaker service providers or vessel operators directly. They may also derive the 44 average speed based on actual distance and time on NSR. However, we need to verify with the NSRA for 45 this. Second, due to uneven distribution of sea ice in different regions, the speed may vary with the actual 46 leg that the vessel was passing through. And in different months, ice conditions vary greatly. It is more 47 sensible to determine the speed separately based on leg and month of transit. Third, none of the data 48 clarifies the actual paths of transits. The detailed trajectories of transits would give more accurate 49 information on distance travelled and thus a more precise speed can be derived accordingly. 50

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Compared to port call data, transit data has a much smaller number of records. According to Moe 1 (4), ‘transits’, as reported by the NSRA, include all sailings that traverse the most challenging part of the 2 NSR, along the coast of East Siberia. This statement is still vague. It should be make clear what ‘the most 3 challenging part of the NSR’ refers to, or what criteria are for an activity to be counted towards a NSR 4 transit. Moreover, the discrepancies between transit data and port call data should be examined carefully. 5 This again leads to the point that further information or data is required. 6

After all, the data indicate that more time needs to pass before trends in NSR shipping can be 7 understood or predicted. This paper is served as an early attempt to measuring and evaluating the viability 8 of the NSR. 9

10 CONCLUSIONS 11 Transit shipping along the NSR was performed by 2, 4, 41, 46, 71 and 53 ships respectively in 2009-2014 12 in the summers. The number of transits generally increases over time but remains meagre compared with 13 other major shipping routes. The navigation season at NSR lasts for 5 months every year, and ice classes 14 of Arc4 and Arc5 are used extensively. Despite Arctic nations, China, South Korea and Japan are active 15 participants in the transit activities. Thus far, most shipping activities are still destinational or domestic. 16 However, international transits are associated with the greatest rate of increase from 2011 to 2013. 17

The volumes of total cargoes transported remain unstable. Thus far, oil-and-gas transportation 18 dominates the transits. The number of bulk transits is quite stable, and we observe an increase in general 19 cargo transits over the years. In contrast, few containerships have traversed this “promising” route so far. 20 Lacking in transshipment opportunity and severe ice conditions are the main hindrances for container 21 shipping. Owing to the Yamal LNG project, an increase in number of LNG transports is expected in the 22 coming years. One issue of concern is that a dominant proportion of laden vessels travel eastbound, but 23 empty vessels travel westbound. The high share of ships in ballast indicates the lack of return cargo from 24 the East. 25

The limitations of the two datasets are briefly mentioned. Collectively, they fail to provide 26 detailed trajectories of actual transits and thus it remains difficult to determine the actual vessel speed on 27 the NSR based on these datasets. 28

29 ACKNOWLEDGEMENTS 30 This study is supported by the research project “Viability of Transarctic Shipping Routes and Their 31 Impact Analysis on Maritime Transportation” funded by Singapore Maritime Institute. 32 33 REFERENCES 34 [1] Lasserre, F., and S. Pelletier. Polar super seaways? Maritime transport in the Arctic: an analysis of 35 shipowners’ intentions. Journal of Transport Geography, Vol. 19, No. 6, 2011, pp. 1465-1473. 36 [2] PAME. The Arctic Marine Shipping Assessment 2009 Report.In, The Arctic Council, 2009. 37 [3] Østreng, W. Shipping in Arctic Waters: a comparison of the Northeast, Northwest and Trans Polar 38 passages. Springer, New York; Berlin, 2013. 39 [4] Moe, A. The Northern Sea Route: Smooth Sailing Ahead? Strategic Analysis, Vol. 38, No. 6, 2014, pp. 40 784-802. 41 [5] Østreng, W. The International Northern Sea Route Programme (INSROP): applicable lessons learned. 42 Polar Record, Vol. 42, No. 220, 2006, pp. 71-81. 43 [6] Kitagawa, H. Arctic routing: Challenges and opportunities. WMU Journal of Maritime Affairs, Vol. 7, 44 No. 2, 2008, pp. 485-503. 45 [7] Buixadé Farré, A., S. R. Stephenson, L. Chen, M. Czub, Y. Dai, D. Demchev, Y. Efimov, P. Graczyk, 46 H. Grythe, K. Keil, N. Kivekäs, N. Kumar, N. Liu, I. Matelenok, M. Myksvoll, D. O'Leary, J. Olsen, S. 47 Pavithran.a.p, E. Petersen, A. Raspotnik, I. Ryzhov, J. Solski, L. Suo, C. Troein, V. Valeeva, J. Van 48 Rijckevorsel, and J. Wighting. Commercial Arctic shipping through the Northeast Passage: routes, 49 resources, governance, technology, and infrastructure. Polar Geography, 2014. 50

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