The ‘Arctic Passage’ suddenly throws itself open: Will Sri Lanka’s strategic advantage end?

Posted: September 10, 2010 in Uncategorized

By Joseph Thavaraja

As you read this- right at this moment (September 1) , unknown to most of us, a historic journey is taking place -in the deadly, freezing seas of the Arctic. On August 30, a large tanker called SCF Baltica has crossed the once unimaginable Arctic Circle to deliver 70,000 tons of “gas extract” (condensate) all the way from Russia to China.

The first time a tanker or a ship of a considerable size has successfully crossed the ever frozen “Northern Sea Route” (NSR). NSR is known for centuries as the “Northeastern Passage” and dreamed by all major shippers ‘wanting to navigate it.’ The successful tanker SCF Baltica is now continuing towards its final destination ‘Ningbo Port’ in Zhejiang Province, China having passed the NSR and is expected to call at its discharge port ‘Ningbo’ someday in mid-September.Shipping & Logistics experts of Sri Lanka–over to you!

What really is NSR? For centuries, the “Northern Sea Route” (NSR) sea area has been a coveted shipping lane for operators in Europe and Russia but they could not cross it. NSR connects the Atlantic Ocean to the Pacific Ocean on the side of Russian Arctic coast while to do the same using the presently used route will need a ship to cross Europe, the Mediterranean, Gulf and Saudi regions, Sri Lanka, Malaysia and China. The route was completely closed for outsiders after the 1917 Russian revolution and even when one is permitted, only parts of the NSR passage -and not the entire length- have been open (until now) to the shippers –and that too, for very limited periods of time in a year due to extreme weather conditions –not to mention the deadly floating ice blocks/mountains that can crush even the strongest of ships ‘like a sharp knife slicing into butter’.

The Colombo port however depends considerably on the non-South Asian carriers that cross from Melacca to Mediterranean and vice-versa, for its revenues. According to Ports & Aviation Deputy Minister Rohitha Abeygunawardena the 2010 net profit of the Colombo Port will ‘exceed Rs. One billion.’ It is clear that a considerable portion of it is from non-South Asian shipping lines –and these shippers would only be glad to switch to the “Northern Sea Route” (NSR) as it gradually becomes ‘more passable’ due to attractive time and cost savings. If the successful SCF Baltic tanker is to deliver its load in its usual convoy route, then it should start from Murmansk in Russia and then transit the Norwegian sea, English channel, the Gibraltar strait, the Suez Canal, Gulf of Aden, Colombo / Hambanthota port and from there continue to cross Melacca (Malaysia) strait, Singapore, South China sea, enter East China sea, then Zhousan region and finally to arrive at Ningbo Port in China! This current convoy route adds up to a distance of more than 13,000 miles (20,500 km) and around 40 days transit time, but the SCF tanker on the successful “Northern Sea Route” (NSR) will be completing it much sooner- in almost half the time and only 8,500 miles (13,700 km) to go.
But global warming has blessed the shippers with the solution. As a result of increasing temperature in the Arctic regions, deadly Ice caps along the NSR began thawing, and the prohibitive Arctic passage began to clear-somewhat. Still, shippers found cutting across parts of the stretch -even with the support of nuclear powered ice breakers-has been prohibitive (especially the ‘Vilkitsky Strait’ in the passage). But the success of the SCF Baltic tanker shows that the entire route is now open-finally.

What is important for us is not the reduction in time/distance or savings (etc) but the fact that the tanker conveniently skipped the entire convoy transit points-including the Port of Colombo!

Get the picture?

Colombo port was built first in 1870s. It locates right at the centre of Indian Ocean and handles 95% our total international trade. It is the host to more than 30 international shipping lines that cross the Indian Ocean regularly. It has been ranked 27th among the best 35 ports in the world. It annually handles a cargo tonnage of 30.9 million tons. It also deals with 15% of South Asia’s trans-shipment cargo. Between 200 to 300 ships call at Colombo port daily. At present, it is the only port equipped to handle containers in Sri Lanka. Right now, a large scale expansion project is also underway at a cost of US $ one billion to ‘dramatically increase capacity’—in that, a three-fold increase in its capacity so that it ‘will emerge as a mega hub’ in South Asia.

This is not to say that the arrival of ships to the port of Colombo will stop from tomorrow! This development can be classified as a long term threat on Sri Lanka’s centuries old shipping sector-but for now. One may also argue that shippers need to clear many shipping permits from Russian border control on the Arctic side. And also that even if European ships will stop coming to Colombo, South Asian ships will still continue to arrive keeping the port busy!

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