How safe is it? What advantages will it bring? What sectors are set to benefit from it? How soon can I use it? Can it be an alternative to Suez? Our IHS Maritime and Trade analysts reveal all. For maritime news and analysis, see www.ihsmaritime360.com

1. IHS Maritime: Arctic Shipping
Gary Li, Senior Analyst, IHS Maritime
Richard Hurley, Senior Analyst, IHS Maritime

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3. Arctic Routes
• How safe is it?
• What advantages will it
bring?
• What sectors are set to
benefit from it?
• How soon can I use it?
• Can it be an alternative
to Suez?

4. Trade Factor
10
9
8
7
6
5
4
3
2
1
0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Seaborne Trade Nominal Value (Trillions $)
Asian Exports
Asian Imports
Asian Seaborne Trade Forecast
Source: IHS World Trade Service © 2013 IHS
• Asian import/export
• Forecasted steady growth
• Container shipping to Europe
• Third largest in terms of regional
trade
• COSCO ‘Yong Sheng’ – 2013
• Dalian – Rotterdam via NSR
• Nine days faster than Suez

5. Ice Capable Container Ships
• Relatively few in number
• Maersk currently in the ‘lead’
• Total TEU numbers quite low
• Currently only 15% of container
fleet are ice capable
• Only 1% of new orders are for
ice capable ships

6. LNG Demand
• LNG demand
forecasted to grow
strongly
• Asia stands to be
largest importing
region
• Top five Asian
economics have
huge appetite for
LNG
• China and Japan
fuelling imports

7. Ice Capable LNG Tankers
• Relatively small percentage
of current fleet- 29 out of 375
• Also small percentage of
orderbook- 10 out of 88
• Japan and Norway has
largest % of tankers
• Russia leading the way with
new orders
• Delivery of Veliky Novogorod
in Jan 2014
• Aim to dominate Arctic LNG
transport

8. Icebreakers
• Critical for navigating NSR,
even during summer months
• Russia holds near monopoly
• US and Canada lagging in
icebreaker capabilities
• Atomflot- six icebreakers
available for escort duties
• Others mainly used in Arctic
ports
• New icebreaker LK60 class
in build- in service by 2017

9. Alternative to Suez?
• Total Suez transits in 2013
were not impacted
• More than 16,000 ships
transited the canal in 2013
• Vital to Egyptian economy
• Military will not allow it to be
threatened
• Current volumes in NSR
nowhere near Suez
• Will remain vital for
international shipping for the
indefinite future
2nd Army
• 2nd Mechanized Division
• 16th Mechanized Division
• 18th Mechanized Division
• 2 x Divisions in reserve
3rd Army
• 7th Mechanized Division
• 19th Mechanized Division
• 2 x Divisions in Reserve

10. Regulatory Bottlenecks
• Varying classifications for ice
capable ships
• NSR uses Russian class
• Non-standardisation • Polar Code- 2015
• International Maritime
Organisation

11. Safety Concerns
• Few assets, overstretched if traffic increases
• Icebreakers have to maintain escort as well as SAR duties
• Few aircraft assets in region
• 10 new SAR centres due to open in 2015

12. Arctic Shipping Routes
• With shrinking ice coverage in Arctic,
the seaways is opening up
• The “Northern Sea Route” (NSR)
and “Northwest Passage” (NWP)
are navigable during the summer
months
• A further “Central” corridor is
envisioned to have opened up by
2040

13. 2013 Ice Coverage
• Ice coverage in the Artic is annually at
its greatest extent in February and least
in September
• Navigation season for the NSR is late
June to September
• In recent years Artic Warming has made
most difference to extent of ice in
summer
Ice Extent in February 2013
• In 2012 the NSR was considered
ice free from August 2012
• In 2013 the summer minima was
29% higher than predicted
• Ice breakers were still required for
vessels passing North of the East
Siberian island throughout the
season
Ice Extent in September 2013
Images courtesy of the National Snow and Ice Data Center, University of Colorado, Boulder.

14. NSR Transits
The number of ships transiting the NSR
increased in 2013 by 54%
• 267: Total traffic in the area June to October
• 25: Non-Russian vessels from 11 Flags
• 10: Vessels made the through passage
• 9: Vessels carried export cargoes from
Russian ports
• 6: Total number of icebreakers employed?
Year No. of Transits
2011 41
2012 46
2013 71
Source: NSR Administration/AISLive
Photo: riamotor.ru

15. 2013 SAR Incidents
• The holing of the tanker Russian
Flag Tanker Nordvik in the
Matisen Strait on September 4.
• The loss of the helicopter from
the CCGS Amundsen on 9th
September

16. Nordvik Incident- September 2013
Date: 4 September
Ice Class: Ice Class I
Cargo: 4,944 tons diesel
Damage: 1m hole in ballast tank
Date: 9 September
Ship: Icebreaker Taimyr
Date: 11 September
Ship: Tanker Boris Vilkitsky
Date: 14 September
Ship: Icebreaker Vaigach

17. CCGS Amundsen Incident
• 9 September: helicopter of CCGS
Amundsen collide with ice and
crashes
• Injured crew perish despite being
in survival suits
• Amundsen was ordered to return
• Helicopter eventually recovered
• Helicopter was only effective
asset for this section of NW
passage

18. 18
Nordic Orion: NSR & NWP voyages
Photo: Environment Canada
Source: MINT/IHS Maritime
• During the summer months of 2013, Nordic Orion
transited both Northern Sea Route and North
West Passage
• NWP route shaved over 1,000 miles off the
Panama Canal Route
• ..and was able to carry 25% more cargo

19. 19
Icebreakers
• Russia has the largest fleet of ‘escort’ icebreakers
• Most icebreakers used for port clearance duties
Sea-going Icebreaker Fleet by Nationality
Photo: Rosatomflot
Source: IHS Maritime

20. Thank You!
Questions?