Japan Considers Using Arctic To Save 40% on Shipping Costs

The NSR is already in use as a shipping route.

Japan wants to join the Arctic Council forum in an observatory role as it contemplates using the Arctic Ocean as a Europe/Asia shipping route to cut CO2 emissions and journey times, according to a report by Nikkei.

The forum is currently comprised of eight Arctic Ocean countries, including Russia, Canada, the U.S. and Norway, plus six observer states, which facilitate cooperation and coordination on common Arctic issues, and in particular, issues of sustainable development and environmental protection in the Arctic.

Using the Northern Sea Route (NSR) through the arctic reduces journey time when compared to the usual route through the Suez Canal, with the 31 day via Suez journey being reduced 13,000 kilometres and 6 days to 25 days when taken via the NSR.

The reduction in journey time translates into a reduction of bunker fuel used, which in turn translates into a cost saving and a reduction in CO2 and other emissions.

Using the NSR also means ships don't have to pay the Suez Canal toll as well as paying less insurance due to the avoidance of high risk piracy areas, although current ice-breaking fees are said to exceed the Canal toll.

Japan's Transport Ministry estimates that the Arctic route would cut total one-way shipping costs by 40%, including fuel and personnel expenses as well as sailing fees, although details such as how much Russia would charge to let vessels sail along its coastal areas still need to be clarified.

The NSR is already in use as a trade route, with Ship & Bunker reporting in June that Nordic Bulk Carriers A/S (Nordic) is planning to transport six to eight 70,000 metric tonne (mt) shipments of iron ore to China using the NSR this year.

Nordic's Managing Director Christian Bonfils said the Russia to China journey using the NSR cuts 23 days from the 43 going through Suez, which will save it 1,000 mt of fuel, or $650,000, per journey and up to $5.2 million if all eight journeys are made.