Improved connectivity, especially through transport links, is an essential condition for economic growth. Transport links not only provide physical access to resources, but also enable producers to take advantage of opportunities in domestic and foreign markets, leading to economies of scale and specialization.
In the conditions of a market economy, the need to improve the quality of transport services using advanced transportation technologies and the provision of fundamentally new competitive transport services comes to the fore. This is primarily due to the presence of real competition between different modes of transport.
Transportation logistics between Far East and Western Europe is vital for world’s economic development, but today we do not have reliable technologies and transport lines. Due to this it is necessary to think on few aspects, which may determine the development of environmentally friendly economies in future:
- reliable transportation (safe and environmentally friendly) ;
- cheapest modes and transhipment lines;
- fastest modes of transportation
The cheapest mode of transportation is by the sea, but it also has some pros and cons.
Currently about 98% of mutual Far East – West Europe deliveries are made by maritime transport, with aviation transport and railway transport accounting for 1.5 – 2% and 0.5 – 1%, respectively. Approximately 80% of Far East – West Europe cargoes are carried in containers, including about 90% of cargoes brought to West Europe from the Far East (imports) and 70 – 75% of cargoes carried from the West Europe to the Far East (exports).
This data shows that investment in rail infrastructure is leading to rail being a viable alternative to both sea and air for trade between the Far East and Europe.
On a global scale, sea transport delivers over 80% of all world cargo. In fact, sea transportation plays a major role in world trade. In addition, from an economic point of view, this is the most efficient and inexpensive way to transport cargos.
Maritime routes are corridors of a few kilometres in width connecting economic regions and overcoming land transport discontinuities. International maritime shipping routes are forced to pass through specific locations corresponding to passages, capes, and straits. These routes are generally located between major markets such as Western Europe, North America, and East Asia, where an active system of commercial trade is in place.
To date, there are several maritime transhipment routes that create a global transport logistics chain:
- The busiest North Atlantic route connects the ports of the Atlantic coast of America with the ports of Western Europe
- The second busiest route passes through the Suez Canal.
- The third busiest route is through the Panama Canal.
- West African routesconnect the Atlantic ports of Europe, North and South America via the Cape of Good Hope with the West and South – East coast of Africa. Super tankers with oil from the Middle East to Europe follow the same route.
- South American routes through the Strait of Magellanconnect Europe and the Atlantic coast with Brazil, Uruguay, and Argentina.
- Routes in the North Pacific Oceanconnect the Pacific coast of the USA and Canada with Japan and China.
- Routes through Honolulu, Samoa, and the Fiji Islands, and through Tahiti and the Society Islandsconnect the Pacific coast of the USA with New Zealand and Australia.
- The Northern Sea Route
This unique transport artery is the shortest shipping route between Europe and Asia.
The mentioned maritime transhipment routes create for global freight circulation and in part because of the economic activities and resources they grant more efficient access to.
Thus, the warm waters (red) shipping line from Far East to the port of Rotterdam in Netherlands for the delivery of goods to the Balkan Peninsula, which lies at the intersection of transit communications in Europe, Asia, and Africa, today has great logistics prospects. Currently, 80% of cargo from Far East to Europe goes through the Atlantic ocean to the ports of Northern Europe. The warm waters shipping line through the Arabian sea and the Suez canal to the Balkans reduces the transport time by 7 – 10 days: this is so far the shortest sea route from Far East to Europe (however, to do this, CEE needs to build transport infrastructure, which the region has a huge need for. This is especially true for the Balkan Peninsula, which has entered a period of stable development after riots and wars that caused serious damage to infrastructure). Thus, the cheapest in the cost, this transshipment line is not beneficial in terms of second criteria – timeframe (See Figure 1).
Presenting great opportunities for global shipment, the Southern Seas create vital shortcuts via highly congested chokepoints (See Figure 3), namely:
- The Straits of Malacca and Singapore – the shortest route between the Pacific and Indian Oceans;
- The Phillips Channel in the Singapore Strait;
- the South China Sea – crucial shipping lane and a region subject to contention since oil and natural gas resources are present;
- The Cook Strait is located between the two main islands that comprise New Zealand;
- The Strait of Bab-El-Mandeb – the shortest trade route between the Mediterranean region, the Indian Ocean, and the rest of East Asia;
- The Strait of Hormuz links the Persian Gulf with the Arabian Sea and the Gulf of Oman;
- The Suez Canal (Including Gubal Strait) ) provides the shortest route between the Atlantic and Indian oceans;
- The Cape Good Hope represents the extreme tip of Africa separating the Atlantic and Indian oceans;
- the Strait of Gibraltar connects the Atlantic Ocean and the Mediterranean Sea;
- The Bosporus and Dardanelles Straits separate the Sea of Marmara from the Aegean and Black Seas;
- The Strait of Dover connects the Baltic and North Seas;
- The Oresund Strait is a passage of 115 km between Denmark and Sweden connecting the North Sea and the Baltic;
- The Danish Straits are a system of straits between the Scandinavian and Jutland Peninsulas;
- The Panama Canal is the main crossing point between the Atlantic Ocean and the Pacific Ocean;
- The Strait of Magellan is used to be the only way to get from the Atlantic Ocean to the Pacific Ocean;
- The Strait of Florida isserving as the main connection between the United States and all points to the south and west;
- The St. Lawrence River is a major waterway in North America, flowing through the United States and Canada and connecting the Great Lakes with the Atlantic Ocean.
Apart from being vital for global trade, disruption of trade flows through any of these chokepoints could have a significant impact on the world economy. Many of the bottlenecks are located next to politically unstable countries, increasing the risk of compromising their access and use, such as through piracy. Closures are a rare instance that have only taken place in war situations as one proponent prevented another from accessing and using the chokepoint (e.g., Gibraltar and Suez during World War II). Closure of a maritime chokepoint in the current global economy, even if temporary, would have important economic consequences with the disruption of trade flows and even the interruption of some supply chains (e.g., oil). These potential risks and impacts are commonly used to justify using military naval assets to protect sea lanes, even if such benefits are difficult to demonstrate.
Global warming is causing vast perennial ice sheets to melt, resulting not only in an environmental threat but also in the opening of economic opportunities.
Thus, another waters shipping line (cold waters – blue line), which emerged as a result of the rapid melting of the North polar icecap, opens the prospects of shortened transport waterways in the ice-free areas. There are basically three possible routes, each of significance:
- The Northwest Passage, connecting the American Continent and Far East Asia;
- The Northern Sea Route, offering a shorter way from West Europe to Far East along the Russian Arctic coastline ; and
- The Arctic Bridge, connecting Canada and Russia (See Figure 2).
Geographically the position of the North waterways is very beneficial. The Northwest Passage connects the Atlantic and Pacific along the northern coast of North America through the Arctic waters from the Davis straits and Baffin Bay all the way to the Bering Sea shortens the distance between Far East Asia and the American East coast (via Panama) by approximately 7,000 kilometers.
The North East Passage, which connects the Atlantic coast of Western and Northern Europe with the Pacific coast of Northeast Asia via the Russian Arctic coastline, is cutting the distance between the edges of two continents, making it shorter by about 40% in comparison to the traditional, warm seas transport routes via the Suez or Panama Canal.
The Arctic Bridge is a seasonal route which shortens the connection between the North American and European continents via the Arctic Ocean. Nevertheless, the observation shows that the transshipment route between the North Atlantic and the Pacific Ocean straight over the Central Arctic Ocean (the so-called Arctic Bridge) might be in reach earlier than expected due to climate change.
Thus, in terms of logistics, the cold waters shipping line (blue) will allow to deliver cargo to West Europe by sea faster than the 48 days (that it takes on average) to travel from the Northern ports of Far East to Rotterdam via the Suez canal, considering that the passage of a cargo ship along the North sea route is 2.8 thousand miles shorter than the route through Suez canal (See Figure 1).
The criteria of reliability also plays a positive role. Analyzing and estimating of the CO2 emissions directly resulting from transport between Far East and the West Europe by air, sea and rail, it has been assumed that carrying a TEU by container ship results in emissions of around 0.5 tonnes of CO2. These emissions might fall in future, if the average value of goods sent by sea, fell, and if this resulted in ships sailing at lower and more efficient speeds.
Among the advantage of Northern Seas transhipment lines, one should consider a significantly lower risks of physical loss of cargo (due to the peculiarities of the climate of the Indian Ocean, through which the southern route passes). Tropical storms of the Indian Ocean, which cause significant destruction, and sometimes sinking of cargo, lead to significant financial losses, and sometimes to the loss of a deal with the buyer. Such tropical cyclones occur during the typhoon season and last for more than six months: from May to November. The climatic features of the southern route suspend the navigation of the canal for as long as 6 months, creating unsafe and in some cases unprofitable conditions for transport companies. There are no storms in the sea expanses of the Northern Sea Route almost all year round, this is facilitated by the ice cover, which restrains water fluctuations. Thus. the stormy conditions of transportation of the northern seas are incomparable with the destructive storms of the South.
Another advantage, which play into the hands of the blue transhipment routes is the decrease of using of harmful to the environment material – cement. Building new land infrastructure (especially roads) requires cement, a material that contributes more than 6% of global carbon emissions. Shifting the transportation mode to the sea, therefore, will reduce the amount of roads constructions on the land.
It is estimated that cargo, currently carried by maritime and air (white shipping line) modes between Europe and the Far East, will in future shift to rail as a result of improved services attributed to the transhipment routes. It is indicated that around 2.5 million TEUs could transfer to rail from maritime transport, and 0.5 million from air transport, by 2040, which is equivalent to 50 to 60 additional trains daily, or 2 to 3 trains per hour, in each direction. In regards with the environmental issue, this means that, if maritime services lose their most time-sensitive cargo to rail, they might in practice sail their ships slower, extending transit times but reducing fuel costs and hence prices, and decreasing greenhouse gas emissions.
In addition to the time-frame criteria, a cold-water shipping line is beneficial in terms of capacity. It is usually characterized as the shortest sea route between West Europe and Far East, the safest (e.g., the problem of Somali pirates) and has no restrictions on the size of the ship, unlike the route through the Suez Canal. Current data makes it clear that the cold-water transhipment line will allow to deliver cargo to Europe faster by sea, reducing the route by 20 – 30%, and hence being more environmentally friendly (by using less fuel and decreasing CO2 emission) and saving human resources. Nevertheless, to capitalize on that opportunity requires much work in terms of improved navigation procedure and installation of safety-related infrastructure.
But in order to use the energy potential of the Arctic, the countries of the region are making additional efforts to develop the main transhipment routes of the North, and one of them – the Northern Sea Route – has great prospects.
The Northern Sea Route is the shortest sea route between the European part of Russia and the Far East; it passes through the seas of the Arctic Ocean (Barents, Kara, Laptev, East Siberian, Chukchi) and partly the Pacific Ocean (Bering) (See Figure 4).
The length of the route from St. Petersburg to Vladivostok via the NSR is only 14.000 km, while on the more popular route through the Suez Canal it is more than 23.000 km. Also, this route is advantageous in terms of delivery time and route length for many countries of the East Asian region to the countries of Western and Northern Europe. For example, the distance from the port of Rotterdam in Europe to the port of Yokohama in Japan via the Suez Canal exceeds 11.100 nautical miles, while the length of the route along the Northern Sea Route is only 7.000 nautical miles, that is, more than 37% shorter. The Northern Sea Route is also beneficial to other ports, for example, the route from Hong Kong, Shanghai, and Busan (South Korea) to Rotterdam is shorter by 11%, 24% and 29%, respectively (See Figure 5).
Though conditions are better along the NSR than elsewhere in the Arctic, major improvements are still needed in support of navigation as well as better communication considering increasing trans-Arctic traffic on the NSR. Thus, the NSR will be most effectively used together with a network of high-speed railways connecting the east and west of the country and providing access to the deep regions of Russia to the ports of the Arctic and Pacific Oceans (See Figure 5). The NSR and the supporting frame of railways are also important for strengthening the transport connectivity of the continents.
Already in 2020, the Russian authorities were intended to increase the volume of cargo transportation along the NSR to 40 – 43 million tons of cargo. According to the decree of President V. Putin, in 2024, the level of transportation should reach 80 million tons. Under favourable circumstances, by 2030 the size should exceed 100 million and amount to about 120 million tons. The growth is planned to be ensured by the beginning of the supply of Taimyr coal to India. After 2030, there are several plans to significantly increase the volume of international transit traffic through the Northern Sea Route.
In the American part of the Arctic region, the construction of the northern components of fixed transportation link in Alaska and Canada opens up development programs with massive international implications, linking the United States with East Asia in the creation of a high-technology, fusion- and fission-powered backbone for a new world economy.
The proposed Alaska – Alberta (A2A) rail corridor will connect the US state of Alaska with Alberta, Canada. The route will link the deep-water ports and the existing railway network of Alaska to the Canadian railway system
Apart from this, considering the current development of logistics routes in Eurasia, the issue of building the Eurasia – America transport corridor via the Bering Strait, which is the missing link in the global transport system, is of crucial importance for the further development of the world economy in the context of globalization.
Thus, the development of a new logistics hub of the world’s transcontinental routes will contribute to a significant increase in the economic well-being of the regions of the Far East, Eurasia, and North America, which will receive additional infrastructure and economic development (See Figure 6). In addition, with the help of the new road network, the development and trade of minerals from the Far East to other regions of the world will be simplified.
Equally important are the initiatives of the countries of Northern Europe and China in the development of transport logistics of the North, which ultimately aims to link the railway network of Eurasia (Russia, Chinese BRI and European TEN-T) with the maritime transport artery of the Northern Seas.
While there is a stable fixed ling between Sweden and Denmark (the 16-kilometer-long Øresund Link between Malmo, Sweden (right), and Copenhagen, Denmark (left), was completed and opened to traffic in 2000),the stable transportation connection across the entire Scandinavia is not fully developed (especially in the Gulf of Bothnia and Baltic Sea), creating a gap between the countries of North Sea and Baltic states.To fulfil this missing part of the logistic chain, North European countries are considering the creation of new transportation fixed links in the region:
- the “HH Tunnel” between Denmark and Sweden;
- The Arctic railway line with the “Arctic Link” to China via NSR to the Northern Europe;
- The Artic Railway to boost railway connectivity North Europe;
- The Pol-Corridor fixed link;
- The International North – South Transport Corridor (hereinafter INSTC) from Finland to Norway and further South;
- The Helsinki – Tallinn undersea tunnel between Finland and Estonia;
- The Nordic Logistic Corridor (NLC);
- Baltic Sea Bridge within Kvarken Multimodal Linkbetween Sweden and Finland;
- The Rail Baltica railway project to enhance railway links between the Baltic States and Central Europe;
Today, China is investing a lot of money in the development of Greenland. In 2017, Shanghai-based Shenghe Resources bought a 12.5% stake in Greenland Minerals and Energy A/S, becoming its largest shareholder and getting the right to increase its stake in the flagship project of the Greenland uranium mining company in Kwanefjeld to 60%.
Another Arctic country, Iceland, enjoys special attention from China as well. Iceland’s central location in the northern hemisphere makes it an ideal northern entrance to Europe from East Asia, similar to the prosperity of the port of Piraeus in Greece, which in a few years should handle up to 6.2 million TEU per year, which will make it one of the five largest ports in Europe. Over time, Iceland may become the same transhipment hub in the Atlantic Arctic, expanding the infrastructure according to needs, as the international shipping network expands through Arctic routes.
China is also actively exploring the transhipment possibilities in the Arctic Ocean basin. Thus, the climatic motivating factor for China in the development of the Arctic using the Trans-Arctic Sea route (hereinafter TSR) is mentioned by many experts, linking it with economic benefits. The Northern Sea Route is a gold mine, with access to which China will be able to increase its exports not only to already established partner countries, but also will have the opportunity to discover new trade chains.
Apart from “Arctic powers”, climate change also opens up additional prospects for the development of the NSR. Thus, if global warming is happening and will continue in the coming years, then the amount and thickness of ice cover in the seas of the Arctic Ocean should decrease. According to the forecasts of Norwegian scientists, by 2080 there may be no ice left in the Arctic seas at all.
Thus, it can be seen that for now the most beneficially in terms of the time-fame is the land (green) shipping line, due to the fact that current Maritime (warm waters – red) transport delivery speeds remain rather low (including those of modern container ships). (Vessels travelling along the Far East – West Europe route run at 20 – 25 knots, while average total travel time, including the Suez Canal passage and port calls, is 35 – 45 days. Besides, there always remains the risk of delays for natural and other reasons (such as waiting for loading at the port of departure)). This gives certain advantages to the cold waters (blue) transhipment line in terms of time-frame, regularity and precision of delivery (See Figure 1), which will dramatically reduce the time between Far East and Europe consumer markets. But to reach consensus in timing, price and environmentally friendly standards the growing push to decarbonize economies, implement the green construction methods should be done. Unfortunately, this approach may take decades to be adopted, which our planet may not have. And understanding of this fact should underlie the development to all the countries of the Globe without exceptions. It is vital to understand, that thinking on global warming issue we should consider all the possible ways of decreasing greenhouse gas emissions and overcome this challenge. We can no longer continue to live in denial of climate change and its impact on our lives the future of our generations.