Two Chinese container ships have set out for the Arctic with the aim of using Russia’s Northern Sea Route as a shortcut to link Chinese ports with European destinations, thus establishing the Arctic as a new alternative trade route to the Red Sea.
The Arctic as a commercial alternative
This Arctic route allows operators to bypass the complicated waters of the Red Sea without having to detour around the Cape of Good Hope, which would increase distance and logistical costs.
The Xin Xin Hai 1 set sail from the port of Taicang, near Shanghai, on July 5. Since then, she has crossed the Bering Strait and entered the Northern Sea Route. This vessel, with a dead weight of 21,279 tons (DWT), has the capacity to transport 1,220 standard containers (TEU). Her sister ship, the Xin Xin Hai 2, follows approximately a week later. The latter, with a dead weight of 29,008 tonnes (DWT), departed the Chinese port of Rizhao in mid-July and is currently heading towards the Bering Strait.
Both ships are heading first to the port of Arkhangelsk, in northwest Russia, and will then continue to ports on the Baltic Sea.
Although some parts of the route are already clear of sea ice during the summer, more difficult conditions in the East Siberian Sea require an icebreaker escort for the ice-class light vessel.
These vessels are operated by New New Shipping Line, a company that began operations in the Arctic last summer, completing seven voyages between July and December. This included a controversial voyage of the NewNew Polar Bear, which caused damage to underwater infrastructure in the Baltic Sea.
The Red Sea problem
Recently, the Red Sea has attracted global attention due to constant attacks on merchant ships by the Houthis, a Shiite Islamic group operating in Yemen, on the Arabian Peninsula. These attacks have led many businesses to reconsider using former trade routes due to the high logistical and human costs that may result from Houthi barge attacks.
Located between the Mediterranean Sea, to which it is connected by the Suez Canal, and the Gulf of Aden, the Red Sea serves as a crucial “superhighway” for commercial shipping of containers and fuel, connecting Europe, Asia and Africa.
If this route is avoided, the alternative is to circumvent the African continent via the Cape of Good Hope, which increases both distance and logistical costs. Furthermore, control of the Red Sea is an area of competition between China, Russia and the US, due to the strategic importance of the route for international trade, especially oil.
Currently, the Red Sea handles 12% of the world’s maritime oil trade and 8% of liquefied natural gas (LNG). Since 2020, the amount of crude oil transiting the Suez Canal has increased by 60%, according to official figures, driven by an increase in demand in Europe from low levels during the pandemic.
