A review of Russian ice-breaking tariff policy on the northern sea route 1991–2014

Gritsenko, Daria; Kiiski, Tuomas

doi:10.1017/s0032247415000479

Cited by 33 publications

(26 citation statements)

References 25 publications

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“…Before 2003, the Russian NSR tariff was subsidized by authorities for ice-breaking aid, but it was then raised to an average of 23 USD per ton of cargo [18]. Taking into account the Russian government's intent in making the Arctic sea routes more competitive, that rate has been constantly adjusted [41]. Starting in July 2017, the Russian NSR administration adopted a much simpler toll calculation (similar to the Suez Canal transit fees) to calculate the fee, and ship owners can get an official tariff quotation by simply entering the gross tonnage (GT) of the ship, the zones the ship intends to sail through, the ice-breaking class, and the expected time of sailing (see Figure 2).…”

Section: Methodsmentioning

confidence: 99%

Energy-Saving Potential and an Economic Feasibility Analysis for an Arctic Route between Shanghai and Rotterdam: Case Study from China’s Largest Container Sea Freight Operator

Wan

Chen

2018

Sustainability

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Global warming has significantly reduced summer ice coverage in the Arctic region, providing long-awaited opportunities for the shipping industry to open new routes through a region known for its harsh navigational conditions. If a shortcut between Asia and Europe via the Northern Sea Route (NSR) is adopted, significant energy saving and pollution reduction are possible compared with conventional southern routes. However, opinions in literature differ regarding this shortcut's economic viability. We present an analysis from the perspective of COSCO, China's largest container sea freight operator. We perform a cost-benefit analysis under several scenarios considering the following current realities: (1) declining oil prices not seen for decades, even lower than the lowest prices assumed in previous studies; (2) declining Russian NSR tariff as an effort to attract shipping traffic; (3) possible emission control areas along a northern route may require much cleaner energy and thus impact costs not studied in previous models; and (4) the capital cost difference between a hired and a self-owned vessel. Classical case studies of shipping routes between Shanghai and Rotterdam are adopted for comparison. We explain how different factors impact the shipping costs and to what extent can the NSR be economically viable. Occasional usage of NSR (e.g., one time transit) is unlikely to be more profitable given the higher unit transportation cost, but the route could be economically competitive in terms of the total profits earned for continuous usage. A more aggressive scenario which requires ships on the NSR to switch to much cleaner fuel would erode this route's competitiveness, but extra environmental benefits should be taken into consideration if future carbon emission trading schemes include the shipping industry.

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Section: Methodsmentioning

confidence: 99%

Energy-Saving Potential and an Economic Feasibility Analysis for an Arctic Route between Shanghai and Rotterdam: Case Study from China’s Largest Container Sea Freight Operator

Wan

Chen

2018

Sustainability

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“…Those, which refer to the official NSRA fees, and those, which refer to discounts, offered in particular cases from time to time. This discrepancy stems from the fact that transit fees have been subject to fluctuations related to financial and geostrategic reasons rather than a well-targeted policy during the period 1991-2013 (Gritsenko and Kiiski, 2016). Several studies emphasise the importance of relatively low ice breaking fees in order for the Arctic routes to be viable (Liu and Kronbak, 2010, Lasserre, 2014, 2015, Furuichi and Otsuka, 2015.…”

Section: Route Selectionmentioning

confidence: 99%

“…Several studies emphasise the importance of relatively low ice breaking fees in order for the Arctic routes to be viable (Liu and Kronbak, 2010, Lasserre, 2014, 2015, Furuichi and Otsuka, 2015. On the other hand, the fact that ice-breaking assistance is not compulsory since 2012 and the recent improvements on navigational rules implemented in 2014 are remedies to the aforementioned obstacles (Gritsenko and Kiiski, 2016).…”

Section: Route Selectionmentioning

confidence: 99%

Arctic shipping: A systematic literature review of comparative studies

Theocharis

Pettit

Rodrigues

et al. 2018

Journal of Transport Geography

105

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Following the gradual decline of Arctic sea ice, shipping using Arctic routes increased from 2010. This led to an upsurge in the number of studies investigating the potential of Arctic maritime routes. A systematic literature review was conducted to assess the extant literature from 1980 to 2017 on comparative studies between Arctic and traditional routes. This review also aimed to provide an initial understanding on route choice decision-making factors and to contribute to the literature by providing suggestions for future research and methodological considerations. The competitiveness of Arctic routes is evaluated from both economic and environmental perspectives. Research themes and methodological characteristics are analysed in order to establish an evidence base in Arctic shipping literature. It is identified that analytical research methods and transport cost models are mainly employed. The results indicate that although Arctic routes can be more cost-effective and energy efficient compared to traditional ones, especially in the long-term, they can mainly serve as seasonal alternatives for bulk and specialised shipping in the short-term.

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“…Instead, research has targeted, for example, the impact of climate change and opening the Arctic route (e.g. Somanathan et al 2007;Parsons et al 2011;Gritsenko and Kiiski 2015;Dalaklis et al 2018) and operational safety (Boström and Österman 2017), whereas optimal pricing research has focussed on fairways or ports (e.g. Coase 1974;Haralambides et al 2001;Meersman et al 2010), while further economic analysis has been limited to the cost-benefit analysis of icebreaker improvements (Lyridis et al 2005).…”

Section: Administration Annual Report 2017)mentioning

confidence: 99%

The costs of icebreaking services: an estimation based on Swedish data

Lindborg¹,

Andersson

2020

WMU J Marit Affairs

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In winter, the sea around Sweden and Finland as well as parts of the waters around Canada, Russia and the USA become ice covered, and ships may require assistance from icebreakers to proceed to their destinations. This paper accordingly analyses the cost structure and estimates the cost of icebreaking operations at sea, including the costs of external effects of the icebreakers' emissions, and analyses the consequences of different pricing schemes for financing icebreaking services. A regression analysis was carried out based on data from icebreaking services in Sweden over 14 winters from 2001/2002 to 2015/2016. The social marginal cost of an average assistance operation (which may involve more than one ship) is estimated at EUR 6476 and for each assisted ship EUR 5304. The same cost is EUR 907 per running hour for the icebreakers and EUR 1990 per hour a ship is assisted. Each additional nautical mile sailed by an icebreaker costs society EUR 141 and each assisted nautical mile EUR 234. The marginal cost is found not to be related to winter severity. Despite the significant social marginal costs, not including large fixed costs, icebreaking in Sweden and Finland is free of charge. The advantages and disadvantages of four pricing models that can be applied to cover at least parts of the costs to society are discussed. All models could create new distortions, but a price per assisted hour may be worth applying in practice.

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A review of Russian ice-breaking tariff policy on the northern sea route 1991–2014

Cited by 33 publications

References 25 publications

Energy-Saving Potential and an Economic Feasibility Analysis for an Arctic Route between Shanghai and Rotterdam: Case Study from China’s Largest Container Sea Freight Operator

Energy-Saving Potential and an Economic Feasibility Analysis for an Arctic Route between Shanghai and Rotterdam: Case Study from China’s Largest Container Sea Freight Operator

Arctic shipping: A systematic literature review of comparative studies

The costs of icebreaking services: an estimation based on Swedish data

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