Artic routes offer marine transport businesses new opportunities and risks

A bulk cargo ship successfully transferred a shipment of coal from the west coast of Canada to Finland last October.

What made the voyage remarkable is the route it took: the Arctic Ocean. By utilizing an Arctic route, the voyage saved the ship's operator a week of time and $80,000 in fuel, insurance broker Marsh Ltd. said in a recent report.

“Global climate change — specifically the melting of sea ice — presents opportunities for international marine transportation networks in the Arctic, at least during the summer months,” according to the report. “Potential Arctic sea routes exist that enable ships to move between the Atlantic and Pacific oceans, thus cutting the distance between East Asia and Western Europe.”

Nonetheless, the northern routes present an array of challenges that preclude it from threatening the primacy of the Suez and Panama canals for quite some time, the report concludes.

“Extreme climate and weather conditions create unique hazards, including floating ice, thick fog and violent storms,” according to the report. “As things currently stand, the majority of ships and their crews are not ready, the support service facilities are not in place, and the risks involved are not understood at a level to enable underwriters to price insurance for Arctic transit with either clarity or certainty.”